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TMI Blog2024 (12) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... 24 by which the Petitioner's Settlement Applications were rejected by the Securities and Exchange Board of India ("SEBI"). 3. Mr Shah, learned counsel for the Petitioner, submits that the rejection is based on the alleged ground that the documents submitted by the Petitioner were deficient and that the Petitioner did not maintain its worth for the Financial years ended March 31, 2019, March 31, 2020, and March 31, 2021. 4. Mr Shah submitted that the documents sought were provided time and again. At no stage was the precise nature of deficiency informed to the Petitioner. He submitted that the Chartered Accountant's certificate regarding net-worth was also provided. Accordingly, he submitted that there was no valid reason to reject the Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr Doctor submitted that the documents supplied and the net worth requirements have been examined by the Internal Committee and, finally, the Whole Time Members of SEBI. Several opportunities were granted to the Petitioner, but still, the Petitioner has failed to avail of the same. Therefore, Mr Doctor submitted that there was no unfairness, and the action of the SEBI called for no interference. 9. Mr Doctor pointed out that two show-cause notices have been issued to the Petitioner. Therefore, it is in the petitioner's interest to keep the Settlement Applications pending. He submitted that final orders cannot be made in the show-cause notices until the settlement applications are decided. He pointed out that no mala fides are alleged, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it Petition (L) No. 393 of 2024. This was disposed of by order dated 19 March 2024. In paragraph 6 of this order, this Court noted that certainly there was a delay on the part of the Petitioner in not complying with the timelines on submission of the documents, which, according to the Petitioner, were relevant in regard to the Settlement Applications and as demanded by the Respondent in the course of the proceedings. After recording this observation about the delay on the Petitioner's part, this Court, "considering the peculiar facts of the case and the reasons which were set out by the Petitioner" opined that the Petitioner deserved to be granted an opportunity for having its settlement proposal consider, even though the furnish of documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of time since this process was on. Such extension was granted up to 31 October 2024. 16. Settlement applications are usually examined in three tiers: first, by the Internal Committee, followed by the High-Powered Committee, and finally, by the Whole-Time Members. In this case, the application was considered by both the Internal Committee and the Whole-Time Members. Even Mr Shah fairly pointed out that no mala fides were alleged against the SEBI, its committees, or the committee members. 17. The impugned communication dated 30 October 2024 records the following in paragraphs 4, 5 and 6:- "4. The documents submitted by you were examined and found to be deficient and therefore, vide email dated April 19, 2024, you were informed of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acy requirement before its applications may be considered for settlement. In that regard, the IC noted that your compliance with the net-worth requirement is under investigation and proceedings are proposed to be initiated for the same. In view the same, you do not appear to be presently meeting the net-worth requirement. 6. In view of the same, the IC recommended rejection of your settlement applications on the ground that you have failed to comply with the condition precedents within the time required by it. The recommendation of the IC to reject your settlement applications was placed before the Panel of Whole Time Members who in terms of Regulation 6 (1) (f) of the Settlement Regulations and in exercise of their power under Regulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd another (supra) a coordinate Bench of this Court has held that whether a dispute should be resolved or whether the wider public interest in ensuring regulatory compliance requires that proceedings should be initiated and, if initiated should be followed to their logical conclusion, is a matter which falls within the discretion of the SEBI. Further, the court held that as a matter of first principle, a person against whom action has been initiated by SEBI or a person who apprehends that action will be initiated by SEBI has no vested right to insist that the dispute be resolved in terms of a consensual settlement. SEBI has been constituted as an expert regulator to ensure the stable and orderly functioning of the securities market. Acting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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