9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (6) TMI 559 - HC - SEBIMaintainability of the Writ Petition - whether IGRP of the First Respondent has jurisdiction to re-examine the complaint of the Third Respondent pursuant to the direction issued by the Second Respondent after having arrived at the conclusion that the admissible claim of the Third Respondent against the Petitioner was 'NIL' and relegated the parties to take further course of action under the Exchange Regulations in the earlier order dated 18.10.2016, which has attained finality having remained unchallenged in the manner recognized by law - HELD THAT - There cannot be any doubt that the attempt to re-examine the complaint of the Third Respondent against the Petitioner by IGRP of the First Respondent without any specific provision to that effect in IGRM devised by the Second Respondent in Circular No. CIR/MRD/ICC/30/2013 dated 26.09.2013, which certainly amounts to re-litigation, is barred. Inasmuch as the earlier adjudication in IGRP of the First Respondent, which culminated in its order dated 18.10.2016, does not suffer from any procedural defect, the question of invoking the inherent powers to re-open the proceeding does not arise. Though a faint plea is made by the Third Respondent that the Petitioner has played a fraud on him, the letter dated 04.10.2018 issued by the Second Respondent to the First Respondent to re-examine the complaint of the Third Respondent does not suggest of the same. What has been mentioned therein is that the Second Respondent has independently examined the complaint and those findings are examined to initiate appropriate measure as per regulation. A preliminary opinion and no definite conclusion on the culpability of the Petitioner has been expressed to treat that any fraudulent act has been committed by the Petitioner against the Third Respondent. As such, it is not possible to uphold the re-examination of the complaint on the ground of exercise of inherent powers for any act of fraud committed by the Petitioner against the Third Respondent. There is nothing which precludes the Third Respondent to rely on any new evidence which has come to his knowledge after the order dated 18.10.2016 passed by IGRP of the First Respondent in arbitration, which is in the nature of an original proceeding. It is needless to add here that no view has been expressed by this Court on the merits of the disputes between the Third Respondent and the Petitioner, and no authority shall be inhibited or influenced by any of the observations made in this order while adjudicating the same. The letter dated 04.10.2018 sent by the Second Respondent to the First Respondent insofar as it suggests that IGRP of the First Respondent may re-examine the complaint of the Third Respondent, is quashed as without jurisdiction and the First Respondent shall be restrained from continuing with the IGRP proceedings initiated in pursuance thereof. It is needless to clarify here that it is for the Second Respondent to exercise its powers conferred under the statute to first make necessary amendments to IGRM so as to create provision for review of an earlier decision of IGRP of a stock exchange, if it so intends, and thereafter require the First Respondent to act in furtherence thereof.
Issues Involved:
1. Jurisdiction of IGRP to re-examine the complaint. 2. Maintainability of the Writ Petition. 3. Nature and impact of IGRP proceedings. 4. Doctrine of finality of litigation and res judicata. 5. Powers of SEBI and the applicability of inherent powers. Detailed Analysis: 1. Jurisdiction of IGRP to Re-examine the Complaint: The core question was whether the Investor Grievance Redressal Panel (IGRP) of the First Respondent had jurisdiction to re-examine the complaint of the Third Respondent after having earlier concluded that the admissible claim was 'NIL' in its order dated 18.10.2016. The court noted that the doctrine of finality of litigation, based on principles of public policy, prevents re-litigation of the same issues. The court held that the attempt to re-examine the complaint without any specific provision in the Investor Grievance Redressal Mechanism (IGRM) circular amounted to re-litigation and was barred. The court emphasized that the earlier adjudication did not suffer from any procedural defect, and thus, invoking inherent powers to re-open the proceeding was not justified. 2. Maintainability of the Writ Petition: The Respondents argued that the Petitioner had an alternative remedy of appeal before the Securities Appellate Tribunal. However, the court referred to the Supreme Court's observation in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai, stating that the rule of exclusion of Writ Jurisdiction by availability of an alternative remedy is a rule of discretion. Since the issue was the jurisdiction of IGRP, a pure question of law, the court overruled the objection and maintained the Writ Petition. 3. Nature and Impact of IGRP Proceedings: The court examined the nature of IGRP proceedings and found that they were not merely conciliatory but had financial ramifications. The IGRP could ascertain the claim amount admissible to the investor and block the corresponding amount from the Trading Member's deposit. This indicated that IGRP proceedings were in the nature of adjudication, binding on both parties. Therefore, the court rejected the Third Respondent's claim that no prejudice would be caused to the Petitioner if the IGRP re-examined the complaint. 4. Doctrine of Finality of Litigation and Res Judicata: The court elaborated on the doctrine of finality of litigation and res judicata, emphasizing that decisions by competent authorities should be final unless modified or reversed by appellate authorities. The court highlighted that re-litigating the same issue would be contrary to considerations of fair play and justice. The court concluded that re-examining the complaint without a specific provision in the IGRM circular was an abuse of the process of law. 5. Powers of SEBI and the Applicability of Inherent Powers: The Second Respondent (SEBI) justified its decision to require IGRP to re-examine the complaint, arguing that there was no express prohibition against re-examination in the IGRM circular. The court, however, noted that inherent powers to review decisions are not implied and must be expressly conferred by statute. The court found no procedural defect or fraud in the initial IGRP proceedings that would justify invoking inherent powers to re-open the case. The court also clarified that the SEBI Act is a social welfare legislation aimed at protecting investors, but this did not imply an inherent power to re-examine closed complaints in the absence of specific provisions. Conclusion: The court quashed the letter dated 04.10.2018 from the Second Respondent suggesting re-examination of the complaint by IGRP as without jurisdiction. The court restrained the First Respondent from continuing with the IGRP proceedings initiated pursuant to that letter. The court noted that if SEBI intended to create a provision for review of IGRP decisions, it must first amend the IGRM accordingly. The Writ Petition was ordered on these terms, and the connected Miscellaneous Petition was closed without costs.
|
