Tribunal quashes delisting orders due to violations of natural justice The Tribunal quashed the delisting orders dated 26th June, 2018, citing violations of natural justice principles. It found that the appellant was not ...
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Tribunal quashes delisting orders due to violations of natural justice
The Tribunal quashed the delisting orders dated 26th June, 2018, citing violations of natural justice principles. It found that the appellant was not afforded a fair opportunity to be heard and that the issuance of two orders on the same date was irregular. The matter was remitted to the delisting committee for a fresh decision after granting the appellant a proper hearing. The Tribunal imposed a cost of Rs. 1 lakh, to be adjusted in the final order, emphasizing that the matter should proceed without adjournments at the appellant's request on the fixed hearing date.
Issues Involved: - Compulsory delisting of a company in accordance with SCRR and Delisting Regulations - Violation of principles of natural justice in passing the delisting order - Issuance of two orders on the same date by the delisting committee
Analysis: 1. Compulsory Delisting: The appeal was filed against the compulsory delisting of the company in compliance with Rule 21 of SCRR and Regulation 22(4) of Delisting Regulations. The trading of equity shares was suspended, and despite opportunities, the shares were not relisted. The respondent issued a show cause notice, leading to the delisting order dated 26th June, 2018.
2. Violation of Natural Justice: The appellant argued that the show cause notice was not served, and inadequate time was given for representation, violating natural justice principles. The delisting committee denied an adjournment request, leading to the order being passed without adequate representation, contrary to settled principles of natural justice.
3. Two Orders Issued: A critical issue arose regarding the issuance of two orders on the same date by the delisting committee. The first order, sent on 3rd July, 2018, was deemed erroneous, leading to the issuance of a second order on 23rd July, 2018. The Tribunal found this action to be irregular and an interpolation in the order, as the second order included additional facts not present in the first order.
4. Legal Findings: The Tribunal held that the delisting order was violative of natural justice as the appellant was not given a reasonable opportunity to be heard. Additionally, the issuance of two orders on the same date without recalling the first order and without proper notice to the parties was deemed irregular and an interpolation in the order. Consequently, the impugned orders were quashed, and the matter was remitted to the delisting committee for a fresh decision after granting a proper hearing to the appellant.
5. Decision: The Tribunal ordered the quashing of the delisting orders dated 26th June, 2018, and directed the delisting committee to rehear the matter after providing a fair opportunity for the appellant to present their case. A cost of Rs. 1 lakh was imposed, to be adjusted in the final order by the delisting committee, emphasizing that the matter should not be adjourned at the appellant's instance on the fixed date of hearing.
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