2019 (12) TMI 1143 - AT - SEBI

Order of delisting - denial on the part of the delisting committee in order to enable the appellant to be represented by an Advocate - No Adequate and reasonable opportunity of being heard provided - HELD THAT - We find that the show cause notice was issued on 1st June, 2018. The first date of hearing before the delisting committee was fixed on 26th June, 2018. The request for adjournment was only made for 26th June, 2018. The denial on the part of the delisting committee in order to enable the appellant to be represented by an Advocate is against the settled principles of natural justice. Further, we find that it was the first date of hearing and there is no allegation that undue adjournment was sought by the appellant. Adequate and reasonable opportunity of being heard was not provided to the appellant. The impugned order is thus violative of the principles of natural justice and cannot be sustained. Two orders of the same date has been passed by the delisting committee - From a comparison of the two orders we find that certain more facts have been inserted in the second order of 26th June, 2018 primarily to cover the lacuna that was glaring and apparent in the first order dated 26th June, 2018. We are of the opinion that once a signed order dated 26th June, 2018 was sent by the delisting committee a second order of the same date could not have been passed without recalling the earlier order and without issuing notice to the parties which apparently in the instant case has not been done. The passing of the second order dated 26th June, 2018 incorporating further facts amounts to interpolation in the order. The impugned order of the delisting committee dated 26th June, 2018 as forwarded to the appellant by the letter dated 3rd July, 2018 and 23rd July, 2018 are quashed on payment of cost of ₹ 1 lakh. The matter is remitted to the delisting committee to decide the matter afresh after granting an opportunity of hearing to the appellant. The respondent will supply a copy of the show cause notice to the appellant and fix a date of hearing

Summary

Issues Involved:
- Compulsory delisting of a company in accordance with SCRR and Delisting Regulations
- Violation of principles of natural justice in passing the delisting order
- Issuance of two orders on the same date by the delisting committee

Analysis:
1. Compulsory Delisting: The appeal was filed against the compulsory delisting of the company in compliance with Rule 21 of SCRR and Regulation 22(4) of Delisting Regulations. The trading of equity shares was suspended, and despite opportunities, the shares were not relisted. The respondent issued a show cause notice, leading to the delisting order dated 26th June, 2018.

2. Violation of Natural Justice: The appellant argued that the show cause notice was not served, and inadequate time was given for representation, violating natural justice principles. The delisting committee denied an adjournment request, leading to the order being passed without adequate representation, contrary to settled principles of natural justice.

3. Two Orders Issued: A critical issue arose regarding the issuance of two orders on the same date by the delisting committee. The first order, sent on 3rd July, 2018, was deemed erroneous, leading to the issuance of a second order on 23rd July, 2018. The Tribunal found this action to be irregular and an interpolation in the order, as the second order included additional facts not present in the first order.

4. Legal Findings: The Tribunal held that the delisting order was violative of natural justice as the appellant was not given a reasonable opportunity to be heard. Additionally, the issuance of two orders on the same date without recalling the first order and without proper notice to the parties was deemed irregular and an interpolation in the order. Consequently, the impugned orders were quashed, and the matter was remitted to the delisting committee for a fresh decision after granting a proper hearing to the appellant.

5. Decision: The Tribunal ordered the quashing of the delisting orders dated 26th June, 2018, and directed the delisting committee to rehear the matter after providing a fair opportunity for the appellant to present their case. A cost of ?1 lakh was imposed, to be adjusted in the final order by the delisting committee, emphasizing that the matter should not be adjourned at the appellant's instance on the fixed date of hearing.