Bombay High Court
Harish Sheth vs Securities And Exchange Board Of India on 26 March, 2026
Author: R. I. Chagla
Bench: R. I. Chagla
2026:BHC-OS:7369-DB
Digitally signed
by MULEY
SHUBHAM
MULEY PRAVINRAO
SHUBHAM Date:
PRAVINRAO 2026.03.26 1 1-WPL-6506-2026.doc
19:15:13
+0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 6506 OF 2026
Harish Sheth ...Petitioner
Vs.
Securities and Exchange Board of India ...Respondent
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Mr. Darius Khambata, Senior Advocate a/w Sameer Pandit, Krina Gandhi
and Ms. Chandni Turakhiya i/by Wadia Ghandy & Co. for the Petitioner.
Mr. Chetan Kapadia, Senior Advocate a/w Ravishankar Pandey, Ankit Ujjwal
and Harshvardhan Nankani i/by Agama Law Associates for the Respondent.
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CORAM : R. I. CHAGLA AND
ADVAIT M. SETHNA, JJ.
DATED : 26TH MARCH, 2026 P.C.:-
1. By this Writ Petition, the Petitioner has sought for quashing and setting aside of the impugned order dated 5 February 2026 passed by the Respondent against the Petitioner. The main ground of challenge to the impugned order is that the impugned order transgresses the ambit of the show cause notice.
2. There is a preliminary objection raised by Mr. Chetan Kapadia, learned senior counsel appearing for the Respondent-SEBI on the ground that there is an alternate remedy available of filing of an Appeal before the Securities Appellate Tribunal ("Tribunal" for short).
3. Mr. Khambata, learned senior counsel for the Petitioner has nevertheless argued on the violation of principle of natural justice namely Shubham 1/3 ::: Uploaded on - 26/03/2026 ::: Downloaded on - 26/03/2026 23:54:43 :::
2 1-WPL-6506-2026.doc that the show cause notice has not made any reference to proposed disgorgement and it only proposes directions to prohibit access to security market, restriction on association with public companies and monetary penalty. However, the impugned order passes directions for disgorgement of over Rs.208.77 crores with 23% interest. It is further submitted that the Petitioner did not make any submission on disgorgement or quantification during the show cause notice proceedings.
4. Mr. Khambata has accordingly submitted that the impugned order for disgorgement was completely beyond the scope of show cause notice and violates the principles of natural justice. Mr. Khambata has also submitted that the impugned order has arrived at findings on Non-Convertible Cumulative Redeemable Preference Shares ("NCCRPS") issued by promoter entities being in violation of the SEBI-PFUTP Regulations and such findings are without jurisdiction. This finding is also according to Mr. Khambata beyond jurisdiction and for which he has relied upon the judgment of the Supreme Court in SEBI Vs. Kanaiyalal Baldevbhai Patel 1 (at paragraphs 23-
56) wherein the Supreme Court has held that while scrutinising cases of fraud under PFTUP Regulations, the emphasis is on the act that has the effect of 'inducing another person to deal in securities '. He has submitted that in the present case, there is no allegation or finding that issuance of NCCRPS "induced" any person to deal in securities of SAL (the listed 1 (2017) 15 SCC 1 Shubham 2/3 ::: Uploaded on - 26/03/2026 ::: Downloaded on - 26/03/2026 23:54:43 ::: 3 1-WPL-6506-2026.doc company). Thus the issuance of NCCRPS does not fall within the definition of fraud. In view of these preliminary objections he has sought for the impugned order to be set aside.
5. Mr. Kapadia has refuted all the contentions raised by Mr. Khambata.
6. Considering that there is an alternate statutory remedy available in the form of an Appeal, the Tribunal can go into these issues apart from the issues on merits of the matter. We are therefore not inclined to exercise our discretion in writ jurisdiction under Article 226 of the Constitution of India. It is always open for the Petitioner to place these submissions before the Tribunal, who would appropriately deal with the same, in accordance with law.
7. We clarify that we have not examined the merits of the rival contentions and all issues including the preliminary issues are expressly kept open to be canvassed before the Tribunal.
8. Accordingly, the Writ Petition is dismissed in the above terms. No order as to costs.
[ADVAIT M. SETHNA, J.] [R.I. CHAGLA, J.] Shubham 3/3 ::: Uploaded on - 26/03/2026 ::: Downloaded on - 26/03/2026 23:54:43 :::