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Writ petition against SEBI dismissed for being  premature  and considered beyond the writ jurisdiction – Madras high court

A petition for issuance of a writ of Mandamus was filed under article 226 of the constitution of India to direct SEBI to exercise its powers for necessary action against the promoter was heard by a two-judge bench of THE HONOURABLE MR. JUSTICE T.S.SIVAGNANAM AND THE HONOURABLE MRS.JUSTICE S.ANANTHI in the case of T.Palpandi versus The Securities and Exchange Board of India and Ors W.P.(MD) No.9667 of 2019 and WMP(MD). No.11129 of 2019

The petitioner has filed to direct the SEBI to use its powers and take necessary actions on the personnel of Commodity Broking Companies, which have been declared ‘Not fit and Proper’ and to declare other companies regulated under SEBI as ‘Not fit and Proper Person’ in the interest of the market participants. this was the second petition in the same matter the earlier writ petition WP(MD)No.4947 of 2018 was disposed of. In this petition, the petitioner has named certain persons who according to the petitioner are errant brokers and alleges that SEBI has been selective in acting and therefore, seeks for appropriate direction to consider the representation. The SEBI has filed a counter-affidavit and mentioned various levels of investigation.

The court decides that SEBI is a Regulatory Authority and is functioning under the provisions of the Securities and Exchange Board of India Act, 1992  the powers of authority is clearly defined hence this court cannot issue any direction or any order which is investigated by the authority and appellants are under the appellate board.

Therefore the main question is whether a Writ of Mandamus can be issued to SEBI to take action against the five individuals in the matter.   The court is of the view that these areas are well beyond the scope of writ jurisdiction of this Court. So, the petitioner has to necessarily wait for the decision of the Appellate Board before whom the investigation is going on. this court decides the writ petition as premature and the petition stands closed.

Click here to read the judgment

judgment reviewed by Naveen Sharma