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TMI Blog2013 (4) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... rchant bankers of the petitioner and a fresh DRHP was submitted, in which SEPL was not mentioned as being associated with DLF. Held that:- The instant petition, is to be dismissed as petitioner did not have a right to hear the submissions of respondent No. 2 complainant, and it had only the right of making its own submissions before SEBI, i.e., respondent No. 1 in terms. One of the reasons for the Court not exercising jurisdiction under article 226 of the Constitution is that the matter involves technicalities, which are best left to be dealt with by experts in the field. This is one of the reasons given by the Court for its decision in Rose Valley Real Estates & Construction Ltd. (2011 (3) TMI 1476 - HIGH COURT OF CALCUTTA). But the issues raised by the petitioner in the instant case are purely legal & not factual, and do not involve any technicality. The submission of the petitioner that it ought to have been granted a full-fledged hearing by the board cannot be accepted as if accepted, it would lead to a piquant situation where the board shall, only on the basis of a prima facie assessment return its findings which would, in turn, impinge upon the functions to be dischar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... say that it would not entertain or look into evidence that the complainant may rely upon in support of his complaint earlier made, while considering whether, or not, to direct an investigation. There is no reason to put any such fetters on the powers of the board or to read such restrictions into the statute, which are clearly not there. The petitioner's submission that the Division Bench in its judgment had precluded the board from looking into any additional information/documents that respondent No. 2/complainant may produce in support of his complaints cannot be agreed with. A perusal of the order of the Division Bench in the three LPAs shows that the Division Bench set aside the judgment of the Single Judge because the Single Judge had himself directed investigation into the complaints of respondent No. 2, rather than requiring SEBI to examine the two complaints of respondent No. 2, and discharge its statutory duty under section 11C. This is clear from reading of the order of the Division Bench. Therefore, the submission of the petitioner that the board has taken into consideration the extraneous or irrelevant material while passing the impugned order is to be rejected. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge Board of India (SEBI), whereby it has been held in relation to the complaints dated 04.06.2007 and 19.07.2007 made by respondent no.2 against the petitioner, that the SEBI shall investigate into the allegations leveled by the complainant/respondent no.2 in respect of the petitioner DLF Ltd. (DLF) and Sudipti Estates Private Limited (Sudipti), respondent no.3. The said investigation shall focus on the violations, if any, of the provisions of the erstwhile SEBI (Disclosure and Investor Protection) Guidelines 2000 read with the relevant provisions of the Companies Act, 1956. It has been further decided that a formal order would be issued appointing an investigating authority who shall investigate the matter, without being prejudiced by any observations made in the said order, and shall complete the same as expeditiously as possible. If any violations are found in the investigation, the SEBI shall proceed in accordance with law. 2. Respondent no.2 claims to have entered into business transactions with respondent no.3, Sudipti in the year 2006. At that time of point of time, Sudipti was controlled by two promoters, namely, DLF Home Developers Ltd. (DHDL) and DLF Real Estate Develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preferred W.P(C) 7976/2007 titled Kimsuk Krishna Sinha v. SEBI [2010] 100 SCL 197 (Delhi) before this Court. In those proceedings, SEBI filed its counter affidavit and defended its position in relation to the complaint of respondent no.2. The writ petitioner, namely, respondent no.2 herein, filed certain additional affidavits. The learned single Judge, after considering the same allowed the writ petition and issued a direction to SEBI to undertake an investigation into the complaints of respondent no.2 by also looking into the averments in the affidavits and additional affidavits filed by the petitioner in the said writ petition. 8. The petitioner DLF, Sudipti and SEBI challenged the judgment of the learned Single Judge dated 09.04.2010 in the aforesaid writ petition, by filing their respective Letters Patent Appeals (LPAs). These LPAs (LPA Nos. 436/2010, 441/2010 and 488/2010) were taken up for hearing by the Court simultaneously and disposed of on 21.07.2011. The observations made by the Court and the directions issued by it in paras 4 and 5 of the order of the Division Bench, being relevant, are reproduced herein below:- "4. In course of hearing of the appeals, it is accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t submission of Mr. Soli Sorabjee, learned senior counsel appearing for the petitioner DLF is that the procedure adopted by the respondent SEBI while granting hearing to the parties, was completely flawed and in gross breach of the principles of natural justice. He submits that the Division Bench had specifically directed in the order dated 21.07.2011 that SEBI shall arrive at its decision "after hearing the parties within a period of three months from the date of receipt of the order passed today". However, SEBI did not grant a hearing to the petitioner, inasmuch, as, the complainant i.e. the respondent no.2 was heard first in the absence of the petitioner, DLF, and thereafter the petitioner was called for a hearing, when respondent no.2 was not present. Consequently, the petitioner did not have the advantage of knowing as to what was submitted by respondent no.2 at the hearing and, therefore, obviously the petitioner could not respond to the complainant's submissions. Mr. Sorabjee submits that respondent no.2 filed detailed written submissions before the SEBI. These written submissions were also not provided to the petitioner. 13. He submits that the petitioner specifically rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J. 399 at pages 401, 402. She had also no opportunity to have her say in the matter of the settlement of the 1st May, 1927. The course of proceeding adopted by the arbitrator was obviously contrary to the principles of natural justice". (Emphasis supplied). 14. Mr. Sorabjee submits that the act of ordering an investigation under Section 11C seriously impinges on the reputation and good name of the petitioner, and an investigation under Section 11C cannot be ordered lightly. 15. In support of this submission, Mr. Sorabjee places reliance on the decision of the Supreme Court in Rohtas Industries Ltd. v. S.D. Agarwal [1969] 1 SCC 325. The Supreme Court in this case was dealing with the power of the Central Government to take action under Section 235 of the Companies Act, i.e. to order an investigation into affairs of a company. The Supreme Court observed: .. It may be noted that before the Central Government can take action under Section 235, certain preconditions have to be satisfied. In the case of an application by members of the company under Clause (a) or (b) of Section 235, the same will have to be supported by such evidence as the Central Government may require for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ket has violated any of the provisions of this Act or the rules or the regulations made or directions issued by the Board thereunder. 18. Mr. Sorabjee submits SEBI that the jurisdictional requirement for invoking section 11C of the Act is that the board should have "reasonable ground to believe", as aforesaid. Before an investigation is ordered by SEBI under Section 11C, it is necessary that there exist circumstances which suggest that either the transaction in securities are being dealt with in a manner detrimental to the investors, or the securities market, or that any intermediary or person associated with the securities market has violated any of the provisions of the SEBI Act or the rules or the regulations made or directions issued by the Board thereunder. 19. In support of his submission that the jurisdiction under Section 11C to order an investigation is dependent on the existence of facts which give rise to "reasonable ground to believe", Mr. Sorabjee has placed reliance on S. Ganga Saran Sons (P.) Ltd., v. ITO [1981] 3 SCC 143. In para-6, the Supreme Court observed: "6. It is well settled as a result of several decisions of this Court that two distinct conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to believe that such "under-assessment" had occurred by reason of either (i) omission or failure on the part of an assessee to make a return of his income under s. 22, or (ii) omission or failure on the part of the assessee to disclose fully and truly all the material facts necessary for his assessment for that year. Both these conditions are conditions precedent to be satisfied before the Income-tax Officer acquires jurisdiction to issue a notice under the section. But the legal position is that if there are in fact some reasonable grounds for the Income-tax Officer to believe that there had been any non-disclosure as regards any fact, which could have a material bearing on the question of under-assessment that would be sufficient to give jurisdiction to the Income-tax Officer to issue the notice under s. 34. Whether these grounds are adequate or not is not a matter for the Court to investigate. In other words, the sufficiency of the grounds which induced the Income-tax Officer to act is not a justiciable issue. It is of course open for the assessee to contend that the Income-tax Officer did not hold the belief that there had been such non-disclosure. In other words, the existenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the maintainability of the writ petition, by submitting that the petitioner has a statutory right of appeal against the impugned order under Section 15T, as any person aggrieved by an order of the Board may prefer an appeal to the Securities Appellate Tribunal (SAT) having jurisdiction in the matter. The petitioner thus has an efficacious alternate remedy available under the SEBI Act itself. He submits that this Court should not interfere with the impugned order in exercise of its discretionary jurisdiction under Article 226 of the Constitution of India. 25. Mr. Tripathi also submits that SEBI, in exercise of its statutory powers, and discharge of its statutory functions, not only exercises quasi judicial functions, but also functions as an investigative body. He submits that the impugned order has been passed by SEBI in exercise of its power to investigate into complaints made before it. He submits that the impugned order does not determine any rights of the parties, and it also does not return any finding adverse to one or the other party. The impugned order merely discusses the existence of facts which give reasonable ground to believe the existence of circumstances in Clauses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll upon the concerned party(s) to render required assistance or produce requisite information, as per its directive. The Commission is expected to form such prima facie view without entering upon any adjudicatory or determinative process. The Commission is entitled to form its opinion without any assistance from any quarter or even with assistance of experts or others. The Commission has the power in terms of Regulation 17(2) of the Regulations to invite not only the information provider but even 'such other person' which would include all persons, even the affected parties, as it may deem necessary. In that event it shall be 'preliminary conference', for whose conduct of business the Commission is entitled to evolve its own procedure". "(5) In consonance with the settled principles of administrative jurisprudence, the Commission is expected to record at least some reason even while forming a prima facie view. However, while passing directions and orders dealing with the rights of the parties in its adjudicatory and determinative capacity, it is required of the Commission to pass speaking orders, upon due application of mind, responding to all the contentions raised before it by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no say in the matter nor is he entitled to any opportunity. The disciplinary authority or inquiry officer, if appointed, on finding that the evidence discloses prima facie ground to proceed against the delinquent officer, the inquiry would be conducted. The criminal court frames charges after supplying the record of investigation relied on. Equally, the disciplinary authority/inquiry officer would frame definite charge or charges and would communicate the same together with a statement of the facts in support thereof sought to be relied on and would call upon the delinquent officer to submit his explanation or written statement of defence etc. At the trial/inquiry the person is entitled to reasonable opportunity to defend himself". 89. The exceptions to the doctrine of audi alteram partem are not unknown either to civil or criminal jurisprudence in our country where under the Code of Civil Procedure ex-parte injunction orders can be passed by the court of competent jurisdiction while the courts exercising criminal jurisdiction can take cognizance of an offence in absence of the accused and issue summons for his appearance. Not only this, the Courts even record pre-charge evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of Section 26(2) of the Act, which order itself is appealable before the Tribunal and only after this stage, there is a specific right of notice and hearing available to the aggrieved/affected party. Thus, keeping in mind the nature of the functions required to be performed by the Commission in terms of Section 26(1), we are of the considered view that the right of notice of hearing is not contemplated under the provisions of Section 26(1) of the Act". (emphasis supplied). 29. Mr. Tripathi submits that the procedure adopted by respondent no.1 in the present case, is no different from that adopted by it in other cases while considering the issue whether, or not, to order investigation under Section 11C of the SEBI Act. He submits that, in fact, there is no legal necessity that the SEBI should grant a personal hearing to the parties before ordering an investigation under Section 11C of the SEBI Act. 30. Mr. Tripathi further submits that the SAT, Mumbai has also ruled on the aforesaid aspect in the case of Bhoruka Financial Services Ltd. v. SEBI [2006] 68 SCL 495 (Sat-Mum.). He submits that in the aforesaid case, information was provided to SEBI on a mere telephonic call, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of Section 11 in which it appears was introduced by the Amending Act 59 of 2002 and by the same amending Act the Parliament inserted Section 11C in the Act and gave powers to the Board which it did not possess earlier to investigate the affairs of any intermediary or persons associated with the securities market and ask for a report. The word 'investigation' as it finds mention in Section 11(4) obviously refers to the investigation in terms of Section 11C as both these provisions were inserted simultaneously. When we read this newly added provision it becomes clear that where the Board has reasonable grounds to believe that the securities market is being dealt with in a manner which is detrimental to the investors or the securities market or any intermediary or person associated with such market, it may at any time, by order in writing direct any person to investigate the affairs of any intermediary or persons associated with the securities market and submit a report. It is, thus, clear that investigation can be made only by an order in writing and not otherwise.............................." 34. Mr. Tripathi submits that the jurisdiction and responsibility of the Board to exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing which the aggrieved party has a further statutory remedy, the nature of the other remedy and the further remedy, none of which can be considered an alternative to the Article 226 remedy, is the decisive factor. If after exhausting the further remedy the Article 226 remedy is available, then the High Court when approached raising the question of jurisdiction or violation of the principles of natural justice or both is to exercise its discretion applying the principle that non-exhaustion of available statutory remedy is no bar to seek the Article 226 remedy; and when after exhaustion of the other or further remedy the Article 226 remedy is not available, the High Court, when approached, should not entertain an Article 226 petition unless it is absolutely necessary to exercise the power in the interest of justice or for preventing a miscarriage of justice. 27. Now in so far as this case is concerned s. 15T of the Act provides that any person aggrieved by an order of the Board under the Act or the rules or regulations made there under may prefer an appeal to a Securities Appellate Tribunal having jurisdiction in the matter; that the Tribunal may pass such orders thereon as it thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or the rules or the regulations made there under, besides making the Tribunal take, of course, a back seat and idle the days away, will (a) make s. 15Z of the Act otiose by derailing the proceedings, and (b) slow the speed at which the proceedings are supposed to attain finality. It is not that the Tribunal is incompetent to decide whether a decision or order of the Board under appeal to it is without jurisdiction or vitiated by violation of the principles of natural justice. On the contrary, it is quite competent to do that. 32. In my opinion, in view of the charted specific statutory course, up to the highest Court of the country, that the proceedings initiated by the Board, the lowest in the three-tier machinery, are supposed to travel, it cannot be said that the remedy of appeal under s. 15T is an alternative to the Article 226 remedy. And, as to the s. 15Z remedy, under no circumstances, it can be considered an alternative to the Article 226 remedy. Hence, in my opinion, even if it is alleged that the decision or order of the Board is without jurisdiction or is vitiated by violation of the principles of natural justice, a petition under Article 226 should not be entertaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich lies before the Appellate Tribunal by observing that complex legal issues are involved in these matters, including the issue of jurisdiction. Mr. Sibal submits that the Appellate Tribunal is headed by a Presiding Officer, who of necessity, should be either a sitting or retired judge of the Supreme Court or sitting or retired Chief Justice of the High Court. He submits that the Appellate Tribunal is, therefore, fully geared and competent to determine all issues including the issue of jurisdiction as well as the issue of breach of the principles of natural justice, as alleged by the petitioner, in the passing of the impugned order. 39.1 Mr. Sibal submits that the argument of the petitioner that the investigation report made under Section 11C by the investigating authority may adversely affect the reputation and business of the petitioner is neither here nor there. That cannot be a ground not to direct an investigation under Section 11C, if, otherwise, there is justification for directing such an investigation to be made. He submits that the report made by the investigating authority under Section 11C is to be submitted to the Board. Thereafter, it is for the Board to consider w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l submits that SEBI has been vested with the exclusive jurisdiction to deal with, inter alia, the public companies which intend to get their securities listed on any recognized stock exchange in India. In this regard, he places reliance on Section 55A and 63 of the Companies Act, relevant extracts of which read as follows : "55A. Powers of Securities and Exchange Board of India. - The provisions contained in sections 55 to 58, 59 to 84 ........................................... (a) in case of listed public companies; (b) in case of those public companies which intend to get their securities listed on any recognized stock exchange in India, be administered by the Securities and Exchange Board of India; and (c) In any other case, be administered by the Central Government. ** ** ** 63. Criminal liability for mis-statements in prospectus. - (1) Where a prospectus issued after the commencement of this Act includes any untrue statement, every person who authorised the issue of the prospectus shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to fifty thousand rupees, or with both, unless he proves either that the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted by the Complainant during the hearing. However, since the said documents are not examined, it is all the more relevant to undertake an investigation to ascertain whether there were any violations of the provisions of the erstwhile DIP Guidelines or the relevant provisions of the Companies Act, 1956. Therefore, on a consideration of the complaints and the submissions of the complainant during the hearing, the counter submissions made on behalf of the Company and Sudipti, I am of the considered view that the ends of justice would be effectively met if an investigation into the matter is ordered". 46. Mr. Sibal further submits that the submission that the petitioner was not aware of the respondents grievances, and the case advance by it before the SEBI in its complaints or written submissions, is a farce. He submits that respondent no.2 has not only narrated its grievances in the complaints which are available with the petitioner, but the grievances had been set out elaborately in the writ petition preferred by the respondent no.2 before this Court, as aforesaid, and the additional affidavits filed in those proceedings. The petitioner is, therefore, not correct in contending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er having an alternative efficacious remedy under Section 15T of the SEBI Act, but on the ground that the petitioner did not have a right to hear the submissions of the respondent No. 2 complainant, and it had only the right of making its own submissions before SEBI, i.e. respondent No. 1 in terms of the order of the Division Bench in the LPA Nos. 436/2010, 441/2010 488/2010 disposed of on 21.07.2011. The limited enquiry conducted by SEBI at this stage was merely to examine whether or not the facts disclosed the entertainment of a reasonable belief to cause an investigation under Section 11C of the SEBI Act, which is an inquisitorial exercise, and not an adjudicatory exercise conducted by SEBI. 51. Though I find much force in the respondent's argument that the petitioner has an alternative efficacious remedy of appeal under Section 15 T of the SEBI Act before the SAT, and a further statutory appeal under Section 15 Z before the Supreme Court, and even though I find great force in the judgment of the Calcutta High Court in Rose Valley Real Estates Constructions Ltd. (supra), I am not inclined to dismiss this petition on the ground that the petitioner has an alternative efficac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at is where the petitioner would be met with a fait accompli even if he were to be directed to avail of the alternative efficacious remedy of an appeal under Section 15 T of the Act, as in the present case. (iv) One of the reasons for the Court not exercising jurisdiction under Article 226 of the Constitution is that the matter involves technicalities, which are best left to be dealt with by experts in the field. This is one of the reasons given by the Court for its decision in Rose Valley Real Estates Construction Ltd. (supra). But the issues raised by the petitioner in the present case are purely legal and not factual, and do not involve any technicality. 52. While I respectfully agree with the judgment of the Calcutta High Court in Rose Valley Real Estates Constructions Ltd. (supra), in my view, the petitioner's case can be distinguished on facts and I am, therefore, not inclined to relegate the petitioner to seek its remedy of appeal under Section 15 T of the SEBI Act. 53. I now turn to the primary submission of Mr. Sorabjee that the impugned order has been passed in violation of principles of natural justice and also that the respondent No. 1/SEBI did not have the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 235 of the Companies Act, the purpose of directing an investigation into the affairs of the company itself would get diluted, if not totally defeated, and the same would also impact the rights of the parties in the course of investigation, as any such investigation would be influenced by the decision of the Central Government. The petitioner has had its say in the matter, as it was made aware of the complaint against it and heard by SEBI on the said complaints. The submissions/case of the petitioner has been taken note of in the impugned order. 57. On the other hand, reliance placed by the respondents in the case of Competition Commission of India (supra), in my view, is most apposite. The Competition Commission of India functions in a dual capacity. It not only investigates into complaints of alleged anti-competitive transactions and activities, but it also adjudicates upon such complaints. As held by the Supreme Court, while discharging its functions under Section 26 (1) of the Competition Act, the Competition Commission of India functions in an inquisitorial capacity, and not in a quasi judicial capacity. The Competition Commission of India has to only examine whether a pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent No. 2 and should also have been provided opportunity to meet the case of respondent no.2 at the stage of consideration of the issue whether an investigation should be ordered by appointing an investigating authority, therefore, cannot be accepted. If accepted, it would lead to a piquant situation where the Board shall, only on the basis of a prima facie assessment return its findings which would, in turn, impinge upon the functions to be discharged by the investigating authority to be appointed to investigate into the matter. Pertinently, an investigating authority is extensively empowered to unearth facts (see Section 11C(2) to 11C(9) of the SEBI Act), and cause a detailed investigation into the matter. That exercise would get defeated if the Board were to, on the basis of a prima facie view, return findings of fact by itself holding a full fledged hearing. As in the case of Competition Commission of India, in the present case as well, the functions to be performed by SEBI cannot be rendered nugatory by imposition of unnecessary directions or impediments which are not postulated by the plain language of Section 11C. 60. The decision of the Supreme Court in Payyavula Vengamm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation. In other words, the existence of the belief can be challenged by the person being investigated, but not the sufficiency of the reasons for the belief. (5) The expression "reason to believe", or the like, in the Statute does not mean a purely subjective satisfaction on the part of the concerned authority. (6) The belief must be held in good faith: it cannot be merely a pretence. To put it differently, it is open to the Court to examine the question whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief, and are not extraneous or irrelevant to the purpose of the section. To this limited extent, the action of the concerned authority in starting proceedings/investigation is open to challenge in a court of law. 61. It is these principles enunciated by the Supreme Court which have to be kept in mind while examining the submission of the petitioner with regard to the lack of jurisdiction in the SEBI to order an investigation under Section 11C of the SEBI Act. 62. Section 11C mandates that the Board should have "reasonable ground to believe" the existence of the state of affairs as mentioned in Clauses (a) (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its said observation: "In the FIR (submitted alongwith the complaint dated June 4, 2007), it was stated that Mr. Praveen Kumar represented himself to be a authorized signatory/director of Sudipti and related to the promoters of DLF Group and was also in the board of many DLF Group companies including DLF Estate Developers Limited, which according to the complainant is one of the two shareholders of Sudipti during the relevant period. During the course of hearing, it is submitted that Mr. Praveen Kumar is the nephew of Mr. K.P. Singh, the promoter/Chairman of the Company. In terms of the DRHP of the Company filed in 2007, Mr. Praveen Kumar is also mentioned as one of the key managerial persons in Company and reports to the board. The complainant further stated that Sudipti was incorporated on March 24, 2004 as a wholly owned subsidiary of the Company and that during the period of his transaction, Sudipti was controlled by the promoters through their key management personnel, namely, Mr. Praveen Kumar, Mr. Jaiprakash Gaur and Mr. Pradeep Singh. It was further stated by the complainant that Mr. Praveen Kumar and Mr. Jaiprakash Gaur were the signatories to the bank account of Sudipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst whom the FIR was registered. Mr. Praveen Kumar, who was closely associated with the Company through Sudipti and the DLF group companies before the Company's dissociation with Sudipti, is also mentioned as a key managerial person of the Company in its DRHP (filed in 2007). Thus, Mr. Praveen Kumar continues to be closely associated with the Company even after the alleged dissociation of Sudipti from the Company. As stated above, the Complainant has alleged that Sudipti is now being indirectly controlled by the spouses of certain key managerial persons of the company whose names were mentioned in the DRHP of the Company filed during January 2007. The company has in its written submission stated that three of its subsidiaries who were holding shares in Felicite Builders and Constructions Private Limited had transferred their holding to several persons who were unconnected to the promoters of the Company. However, there is no dispute to the fact that the spouses of the key managerial persons of the Company are the shareholders in Felicite Builders and Constructions Private Limited which in turn holds shares of Shalika Estate Developers Private Limited. The entire shareholding of Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any potential liability, civil or criminal proceedings that have arisen or may arise in connection with land purchases. 69. The Board also takes note of the fact that DLF in its DRHP filed in the year 2007 disclosed that out of the total land holdings of approximately 10,000 acres, only 0.5% holding was held by the company and the balance holding was held in the name of the company's subsidiaries/associate/group company/companies under the control and management of key management personnel of the company. 70. The complainant produced before the Board additional submission to support the allegation against the petitioner. The Board observes that it does not deem it proper to disregard the same without testing the veracity of such submissions in the interest of justice and in the interest of the securities market and the investors. The Board further observes that : "Having considered the submissions and the fact that the first DRHP (filed in May 2006) was withdrawn and a fresh DRHP was filed in January, 2007 after the sale of state in Sudipti, an examination is required as to whether Sudipti was dissociated for the purpose of avoiding any relevant disclosures that could arise i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gree with the petitioner's submission that the Division Bench in its judgment had precluded the Board from looking into any additional information/ documents that Respondent No.2/ Complainant may produce in support of his complaints. Reading and understanding of the petitioner of the judgment of the Division Bench in the three LPAs does not appear to be correct. A perusal of the order of the Division Bench in the three LPAs shows that the Division Bench set aside the judgment of the learned Single Judge because the learned Single Judge had himself directed investigation into the complaints of respondent No.2, rather than requiring SEBI to examine the two complaints of respondent No.2, and discharge its statutory duty under Section 11C of the SEBI Act. This is clear from reading of para 4 of the order of the Division Bench. I, therefore, reject the submission of the petitioner that the Board has taken into consideration the extraneous or irrelevant material while passing the impugned order. 75. A perusal of the impugned order shows that it certainly cannot be said that it has been passed arbitrarily or irrational. The impugned order is clearly based on reasons which are relevant a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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