Securities Appellate Tribunal
Maars Software International Ltd. vs Sebi on 28 May, 2019
Author: Tarun Agarwala
Bench: Tarun Agarwala
BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
DATE : 28.05.2019
Misc. Application No. 19 of 2019
And
Appeal No. 14 of 2019
Maars Software International Ltd.
2nd Floor, New No. 146, Old No. 106/2,
Habibullah Road, T. Nagar,
Chennai, Tamil Nadu - 600 017. ..... Appellant
Versus
National Stock Exchange of India Ltd.
Exchange Plaza, Plot No. C/, G-Block,
Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051. ... Respondent
Mr. Saurabh Bachhawat, Advocate i/b Shubhangi Chavan, Advocate
for the Appellant.
Mr. Rashid Boatwalla, Advocate with Ms. Shreya Anuwal, Advocate
i/b Manilal Kher Ambalal & Co. for the Respondent.
CORAM : Justice Tarun Agarwala, Presiding Officer
Dr. C. K. G. Nair, Member
Justice M. T. Joshi, Judicial Member
Per : Justice Tarun Agarwala, Presiding Officer (Oral)
1.There is a delay of 149 days in filing the appeal. The ground urged is that after passing of the impugned order, the appellant took time to get necessary documents and related information and thereafter sought legal advice which took time. For the aforesaid reasons and for the grounds mentioned in the application, we find 2 that sufficient cause has been shown to condone the delay. Accordingly, the delay is condoned. Misc. application is allowed.
2. We have heard Shri Saurabh Bachhawat, the learned counsel for the appellant and Shri Rashid Boatwalla, the learned counsel for the respondent. The appellant has challenged the delisting order issued by National Stock Exchange of India Ltd. (hereinafter referred to as, "NSE"). The appellant is a public listed company and was incorporated in August 1995. In 2006, the company went into losses and eventually on May 7, 2009 the trading of its shares was suspended on the stock exchange. Several letters were written by the stock exchange to comply with the listing requirements. Opportunity was given to the appellant company to revoke the suspension but no steps were taken by the company to get the suspension revoked or to revive the company.
3. Eventually, a show cause notice dated April 18, 2016 was issued to show cause as to why the equity shares of the company should not be compulsory delisted from the stock exchange under Regulation 22(1) of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (hereinafter referred to as, "Delisting Regulations") on the grounds prescribed in Rule 21 of the Securities Contracts (Regulation) Rules, 1957. The appellant was also informed by the consequences of the compulsory delisting that follows under Regulation 24 of the Delisting Regulations. 3
4. The appellant filed its reply praying for adjournment on the ground that views of the shareholders are required to be taken. Subsequently, based on the views of the shareholders, it was urged that the appellant company would take steps to revive the company and would take steps for the revocation of the suspension, in spite of which no such steps were taken and eventually, the respondent by an order dated September 4, 2017 decided to delist the appellant company with effect from September 15, 2017. The said order was challenged by the appellant in Appeal No. 276 of 2017 which was disposed of by an order dated October 30, 2017 directing the respondent to pass an order under Regulation 22(1) of the Delisting Regulations after giving an opportunity of hearing to the appellant.
5. Based on the aforesaid direction, the impugned order was passed after giving an opportunity of hearing. The Delisting Committee in the impugned order found that though the company was represented by its Advocate Prakash Shah, but no representative from the company was present at the time of personal hearing. The Delisting Committee further noticed that the appellant company does not have any employees and that the net worth of the company is negative. Further, no agreement was brought before the Committee to show that another entity, namely, M. P. Mining and Energy Ltd. had agreed to acquire the business of the company. The Committee 4 was, therefore, of the view that the appellant company was not in a position to comply with the listing regulations and, consequently, directed that the company should be compulsory delisted from the stock exchange.
6. Before us the only ground urged was that the finding of the Delisting Committee that no representative of the company was present at the time of personal hearing was incorrect in as much as the company's Advocate was present. In our view, the appellants are making a mountain out of a molehill. The Delisting Committee has recorded that the company was represented by its Advocate but also noticed that no representative of the company was present at the time of personal hearing. The Delisting Committee by recording no representative of the company was present meant that no employee or director of the company was present. Obviously, the Advocate of the company is a legal advisor and is not an employee or director of the company.
7. It was urged by the learned counsel that negotiation with the third party, namely, M. P. Mining and Energy Ltd. was going on and that the Delisting Committee should have taken this aspect into consideration. In our view, the Delisting Committee had noticed this development as contended by the appellant but also noticed that the revival plan was not supported by any enforceable or binding 5 agreement between the promoters of the company and the other entity, namely, M. P. Mining and Engery Ltd.
8. We also find that nothing has been stated in the appeal nor the appellant has questioned the veracity of the finding of the Delisting Committee, namely, that the company did not have any employee on its roll nor has questioned the finding that the net worth of the company is now negative.
9. In the light of the aforesaid, we do not find any merit in the appeal. The order of the Delisting Committee does not suffer from any error of law. The appeal fails and is dismissed.
Sd/-
Justice Tarun Agarwala Presiding Officer Sd/-
Dr. C. K. G. Nair Member Sd/-
Justice M. T. Joshi Judicial Member 28.05.2019 Prepared & Compared by PTM