Discretionary SEBI investigation power cannot be turned into a mandatory duty on disputed delisting allegations.

In writ jurisdiction, mandamus was not available to compel SEBI to order an investigation into a proposed delisting or to restrain further steps on disputed factual allegations about trading volume, public shareholding and employee trust control. The Court held that SEBI's power to investigate under the 2003 Regulations is discretionary and cannot be converted into a mandatory duty merely because a representation is made; such disputed matters were unsuitable for summary judicial review. SEBI was only directed to consider the petitioners' representation in accordance with law within a reasonable time, and the petitioners remained free to pursue further remedies if required.

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Issues: Whether, in writ jurisdiction under Article 226, a mandamus could be issued to SEBI to direct an investigation into the proposed delisting of equity shares and to restrain further steps on the basis of disputed allegations regarding trading volume, public shareholding and control of employee trusts.

Analysis: The relief sought depended on disputed factual assertions, including the alleged control of employee trusts and the extent of trading in the scrip, which were not suitable for summary adjudication in judicial review. Regulation 5 of the 2003 Regulations confers discretion on SEBI to order investigation only where there are reasonable grounds to believe that transactions are detrimental to investors or in violation of the regulations. The Court held that this discretionary statutory power cannot be converted into a compulsory duty merely because a representation has been made, and it would be inappropriate to assume that SEBI would not act in accordance with law. The Court also noted that the delisting framework contemplates participation of shareholders through the prescribed book-building process, and that the petitioners had an available course to pursue their representation before SEBI and seek remedies thereafter if necessary.

Conclusion: No writ of mandamus was issued to compel an investigation or to stay the delisting process. SEBI was only required to deal with the petitioners' representation in accordance with law within a reasonable time, leaving the petitioners free to seek appropriate remedies thereafter.

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