SEBI is a public body and should in the best interests of the Public : Bombay HC criticizes SEBI of non-compliance of court orders.
TITLE : Pina Pankaj Shah and Ors V Securities and Exchange Board of India
CITATION : W.P 530 of 2023
CORAM : Hon’ble justice G.S Kulkarni and Hon’ble Justice Jitendra Jain
DATE: 1st December, 2023
INTRODUCTION :
Two writ petitions were filed in which the petitioners were the minority shareholders of Bharat Nidhi Ltd (BNL) and complaint were lodged against them in SEBI for violations of various securities laws.
FACTS :
The petitioners claimed that BNL is violating securities laws including violations pertaining to the Minimum Public Sharing and contended that SEBI should investigate the same. SEBI issued a notice to BNL which was not shared to the petitioners. It was stated that BNL was listed in non functional stock exchange boards. BNL is also a major shareholder of Bennett Coleman and Co. Ltd. SEBI considered the illegalities of BNL. It was contended by the petitioners in front of SEBI board that settlement would not be enough and filed petitions directing SEBI to take appropriate action against BNL under Article 226 of the Constitution.
The high court directed SEBI to provide the documents relating to the investigations to be published to the petitioners. SEBI issued a special leave in front of the Hob’ble Supreme Court to dismiss the order which was subsequently rejected. However the documents relating to the investigations were not provided to the petitioners and they deemed it a misconduct.
COURT’S ANALYSIS
The court held that SEBI is a public body and should act in the best interests of the public. The court criticised SEBI for persistent non-compliance with the courts order and called it an unacceptable behaviour. SEBI’s claim for not publishing the documents to be fair was dismissed by the court. It held that, despite the orders of the court, SEBI has deliberately acted unreasonably. The court further ordered SEBI to issue the documents as it is a part of their substantive rights to know.
“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”
Written by- Sanjana Ravichandran