Threshold challenge to SEBI show-cause notices fails where prima facie jurisdiction exists and writ interference is premature.

Show-cause notices issued by SEBI were not liable to be quashed at the threshold where complaints and a preliminary enquiry disclosed a prima facie basis for inquiry. The Court held that delay in calling for information did not, by itself, cause prejudice when the information was expected to be maintained in statutory records, and the existence of jurisdictional facts could not be negated at the notice stage. It further treated the writ petition as premature because the matter was still pending before the authority, and interference under Article 226 was unwarranted in the absence of a clear lack of jurisdiction or other exceptional ground.

---

---

Issues: Whether the show-cause notices issued by the Securities and Exchange Board of India were liable to be quashed at the threshold on the grounds of delay and laches, absence of jurisdictional facts, vagueness, and violation of natural justice.

Analysis: The notices were issued after the regulator received complaints and conducted a preliminary enquiry into the company's resolutions and fund-raising pattern. The information sought was of the kind the company was expected to maintain in its statutory records, and the delay in calling for such information did not, by itself, prejudice the petitioner. The material disclosed a prima facie basis for inquiry, and the existence of jurisdictional facts could not be negatived at the show-cause stage. The Court also held that the writ petition was premature because the matter was still at the stage of notice, where interference under Article 226 is unwarranted unless a clear lack of jurisdiction or other exceptional ground is shown.

Conclusion: The challenge to the show-cause notices was rejected, and the notices were held not liable to be interfered with at the threshold.

Final Conclusion: Interference with the statutory proceedings was declined, and the writ petition was dismissed as premature.

Ratio Decidendi: A writ court will not ordinarily quash a regulatory show-cause notice at the threshold where the notice is supported by a prima facie jurisdictional basis and the objections can be raised before the authority in the pending proceedings.

---