TaxTMI 
TaxTMI 
TaxTMI 
2012 (6) TMI 223
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....ovisions of the Companies Act, 1956 (for short "the Companies Act"). Its authorised share capital is Rs. 27.50 crores. Intending to raise its capital for expansion of its business operations, its board of directors passed a resolution on February 23, 2007, to raise capital by inviting subscriptions of 76,66,668 equity shares from the public by way of 100 per cent voluntary book building process at a price band of Rs. 40-45. The public issue was opened on October 22, 2007 and closed on October 26, 2007. In the public issue, BOB Capital Markets Ltd., was the book running lead manager and Standard Chartered Capital Markets Ltd., was the co-book running lead manager responsible for post-issue compliances. M/s. Aarthi Consultants P. Ltd., was the Registrar to the issue. The prospectus issued by the petitioner named BSE and NSE as stock exchanges, wherein the proposed shares have to be listed. It has ultimately turned out that the efforts of the petitioner for listing its shares has become abortive with the BSE refusing to grant permission for such listing. The decision of the BSE was communicated to the petitioner vide letter dated January 21, 2008. The petitioner unsuccessfully questio....
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....ular and securities market in general, which may invite suitable action under sections 11A and 11B of the SEBI Act and clause 17 of the SEBI (DIP) Guidelines, respondent No. 1 has accordingly called upon the petitioner to show cause why it is not liable to pay interest at 15 per cent for the period of delay in repaying the application money as per section 73(2) of the Companies Act and without prejudice to prosecute the petitioner under section 73(3) of the Companies Act read with section 621 thereof and appropriate action including direction under sections 11, 11A, 11B of the SEBI Act read with clause 17 of the SEBI (DIP) Guidelines and decision under section 15C of the SEBI Act should not be initiated against it. 5. Before proceeding further, it is pertinent to note that Sri S. R. Ashok, learned senior counsel appearing for respondent No. 1, has fairly conceded that section 15C of the SEBI Act is not applicable to the facts of this case and that therefore, respondent No. 1 will not proceed against the petitioner with reference to the said provision. 6. With this understanding, let me refer to and consider the respective submissions of learned counsel for the parties. 7. Sri B.....
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.... carefully considered the submissions of learned counsel for the parties. 10. This writ petition in effect is in the nature of prohibition. The law is well-settled that the jurisdiction for grant of writ of prohibition is primarily supervisory and the object of that writ is to restrain the courts or inferior Tribunals from exercising the jurisdiction which they do not possess at all or else to prevent them from exceeding the limits of their jurisdiction (see S. Govinda Menon v. Union of India AIR 1967 SC 1274). 11. Now the question that needs to be considered is whether a case is made out for restraining respondent No. 1 from proceeding further in pursuance of the impugned show-cause notice ? 12. Section 11 of the SEBI Act prescribes the powers and functions of respondent No. 1. As submitted by learned senior counsel that one of the functions of respondent No. 1 is to protect the interests of the investors in securities and to promote the development of, and to regulate the securities market by taking appropriate measures as it thinks fit. The provisions of sections 11A and 11B of the SEBI Act need to be interpreted in the light of this onerous responsibility of respondent No. 1....
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....the application fee along with interest and that the SEBI being entrusted with the duty of protecting the investors' interests, it has power and authority to take such action as is necessary for non-compliance with section 73(2) of the Companies Act and also other statutory provisions contained under the SEBI Act and the Guidelines issued or the Regulations made therein. 15. As noted above, the short question for the present purpose is whether respondent No. 1 inherently lacks jurisdiction to issue the impugned show-cause notice. At this stage, it is neither necessary nor proper for this court to render conclusive findings on the scope and purport of the various provisions on which learned counsel for both the parties have placed reliance and which have been noted hereinabove. Respondent No. 1 being an apex statutory body, which is, inter alia, vested with the onerous responsibilities and functions not only to regulate the stock market securities, etc., but also to protect the investors' interests, shall first decide as to whether the petitioner, which is not a listed company, can be proceeded against under the provisions of sections 11, 11A and 11B of the SEBI Act and the statuto....