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TMI Blog2019 (11) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... he complaint on the SCORES platform the said complainants have a right to file an appeal under Section 15T of the SEBI Act. We are further of the opinion that the computer generated communication by the respondent on the SCORES platform, even though it may be an administrative communication is nonetheless an order since it disposes of the lis between the parties and disposes of the complaint and the issues raised by the complainants. The said communication / order as the case may be, in our opinion, is appealable. In the instant case, we find that written complaints made to SEBI from 2013 onwards has not been disposed of as yet but complaints filed on the SCORES platform has been disposed of without deciding / settling the issue that was raised in the complaints. Thus, disposal of the complaints by the respondents on the SCORES platform is no disposal in the eyes of law. It is merely an eye wash without disposing of the complaints and without settling the controversy involved in the complaints. SCORES is an online platform designed to help investors to lodge their complaints pertaining to the securities market. These complaints are filed online with SEBI against listed compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a regulator in the instant case has not performed its duties and has kept the complaint pending for more than six years which speaks volumes by itself. The Tribunal fails to fathom as to why the complaint could not have been decided unless SEBI officials had a vested interest in not deciding the matter. We set aside the communication / order passed by the SEBI on the SCORES platform. The appeal is allowed. We direct the appellants to file a consolidated representation / complaint before SEBI annexing the earlier complaints within four weeks from today. - Appeal No. 428 of 2019 - - - Dated:- 14-11-2019 - Justice Tarun Agarwala, Presiding Officer, Dr. C.K.G. Nair, Member And Justice M.T. Joshi, Judicial Member For The Appellants : Mr. Navroj Seervai, Senior Advocate with Mr. Gaurav Joshi, Senior Advocate, Ms. Arti Raghvan, Mr. Vikram Raghavi, Mr. Pulkit Sukhramani and Ms. Vidhi Jhawar, Advocates i/b J. Sagar Associates For The Respondent : Mr. Fredun DeVitre, Senior Advocate with Mr. Mihir Mody and Mr. Sushant Yadav, Advocate i/b K. Ashar Co, Mr. Venkatesh Dhond, Senior Advocate with Mr. V. Shetty, Mr. Nishant Upadhyay and Mr. Aditya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent Nos. 5, 6 and their family members. However, Mr. Vineet Jain and Mr. Samir Jain, Respondent Nos. 5 and 6 exercise control over BCCL by virtue of their ownership / control of Respondent Nos. 2, 3 and 4 Companies and 8 other entities who are the shareholders of BCCL. 6. It is the further case of the appellants that since 2013 some of the appellants have jointly or individually filed several complaints before SEBI, Respondent No. 1 urging SEBI to investigate and take action in respect of two violations, namely:- ( i) Incorrect disclosures being made by BNL, PNBF and Camac regarding their promoter shareholding thereby failing to disclose the true promoters; ( ii) Consequently, failure by these companies to comply with Minimum Public Shareholding norms prescribed under applicable securities laws; 7. It is the further case of the appellants that Respondent No. 1 SEBI has time and again taken varying stands wherein SEBI has either not responded to the complaints at all or adopted a position that investigation in the matter is underway or treated the complaints as market intelligence, without concluding such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the SCORES platform. The last complaint dated August 3, 2019 was disposed of by the impugned order against which the present appeal has been filed. 10. It was contended that the minimum public shareholding of 25% by a listed company was not followed as per Rule 19A of the Securities Contracts (Regulations) Rules 1957 ( SCRR for short) read with Regulation 38 of the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 ( LODR Regulations for short) and that SEBI for reasons best known was neither actively considering nor investigating the matter. It was urged that the repeated inaction of SEBI to deal with the complaints filed by the appellants since 2013 is writ large. It was also contended that the manner in which the complaints of the appellants have been disposed of in a mechanical and summary manner shows total non-application of mind and which has caused great prejudice to the complainants who are minority public shareholders of BNL, PNBF and Camac. It was lastly urged that the impugned order does not disclose any sound reasons and a computer generated order has been passed mechanically without any application of mind. 11. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SEBI under Section 11(1) of the SEBI Act could be a subject matter of appeal under Section 15Tof the SEBI Act. The Supreme Court held that the circulars issued by SEBI are outside the appellate jurisdiction of the Tribunal and cannot be questioned. Further reliance was made upon a decision of this Tribunal in the matter of M.Z. Khan S/o M.A. Khan vs Securities and Exchange Board of India decided on September 8, 2009 MANU/SB/0113/2009 wherein this Tribunal held that in the absence of any order of SEBI, no appeal could lie. It was found that inaction on the part of SEBI will not allow a party to file an appeal. 14. On the other hand, the appellants have placed reliance upon a decision in the matter of Amit Bhagvatprasad Barot vs Securities and Exchange Board of India Ors. in Appeal No. 157 of 2012 decided on September 3, 2013 wherein the Tribunal held that a complaint which has been disposed of is appealable under Section 15T by a person aggrieved. The Tribunal held that an investor whose complaint is arbitrarily rejected is a person aggrieved and is entitled to file an appeal under Section 15T of the SEBI Act. Further reliance was made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... With reference to your captioned complaint, Kindly be informed that the same has been disposed of in SCORES (www.scores.gov.in) with the following remarks: The information provided by you will be treated as market intelligence. This information shall be treated as confidential. This information will be analysed and if found necessary, further action will be taken. The status of information cannot be ascertained as SEBI conducts the investigations confidentially in a holistic manner. In order to aid SEBI to carry out its surveillance activity, you are encouraged to provide correct and complete information. SEBI will neither confirm nor deny the existence of any investigation. Any regulatory actions taken by SEBI are published at SEBI website. You may contact the Dealing officer for clarification if any (Details of Dealing Officer SEBI is available under view complaint status by logging in to SCORES website i.e. www.sebi.gov.in or you may contact SEBI toll free helpline: (1800 22 7575 / 1800 266 7575) Yours faithfully, For SECURITIES AND EXCHANGE BOARD OF INDIA ( Aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant case indicates non-application of mind and non-consideration of the interest of the investors. We have no hesitation in stating that the SEBI as a regulator in the instant case has not performed its duties and has kept the complaint pending for more than six years which speaks volumes by itself. The Tribunal fails to fathom as to why the complaint could not have been decided unless SEBI officials had a vested interest in not deciding the matter. 21. In the light of the aforesaid, we set aside the communication / order passed by the SEBI on the SCORES platform. The appeal is allowed. We direct the appellants to file a consolidated representation / complaint before SEBI annexing the earlier complaints within four weeks from today. If such an application is filed SEBI will consider and decide the matter by a reasoned and speaking order within six weeks from the date of the presentation of the complaint along with the certified copy of our order. It would be open to SEBI to grant an opportunity of hearing to the parties if they think it appropriate. In the circumstances of the case, parties shall bear their own costs. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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