Constitutional challenge to SEBI powers proceeds without stay, while further orders in the pending proceedings are restrained.

A writ petition challenged the constitutional validity of sections 11, 11B and 19 of the SEBI Act, 1992 and SEBI's order dated 28 December 2011 on grounds of lack of jurisdiction and non-application of mind. At the interim stage, the Calcutta HC declined to stay operation of the impugned order because the balance of convenience did not favour stay. The petition was admitted, SEBI was permitted to continue the investigation, and it was restrained from passing any further order in the pending proceedings, with liberty to seek interim relief in respect of the specified direction.

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Issues: Whether the writ petition challenging the constitutional validity of sections 11, 11B and 19 of the Securities and Exchange Board of India Act, 1992 and the Board's order dated 28 December 2011 should be admitted, and whether interim stay of the order should be granted.

Analysis: The writ petition raised a constitutional challenge to statutory provisions and a challenge to the Board's order on grounds of want of jurisdiction and non-application of mind. At the interim stage, the Court found no reason to stay the operation of the impugned order, holding that the balance of convenience and inconvenience did not favour stay. The Court, however, considered it appropriate that no further order be passed by the Board in the pending proceedings during the pendency of the writ petition, while leaving liberty to seek interim relief in respect of the specified direction.

Outcome: The writ petition was admitted. There was no stay of operation of the impugned order. The Board was permitted to continue the investigation, but restrained from passing any further order in the pending proceedings. Liberty was granted to apply for interim relief on the specified direction.

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