Securities Appellate Tribunal
Mrs. Jyoti Varij Sethi vs Sebi on 25 August, 2021
Author: Tarun Agarwala
Bench: Tarun Agarwala
BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Date of Hearing : 30.06.2021
Date of Decision : 25.08.2021
Misc. Application No. 260 of 2019
And
Appeal No. 199 of 2019
Mrs. Jyoti Varij Sethi
16, Narayan Dabholkar Road,
403, Pleasant Palace Apartments,
Mumbai - 400 006. ..... Appellant
Versus
1. BSE Ltd.
Floor 25, P. J. Towers,
Dalal Street, Mumbai - 400 001.
2. National Stock Exchange of India Ltd.
Exchange Plaza, Block G, C 1,
Bandra Kurla Complex, Bandra (East),
MuMumbai - 400 051.
3. National Securities Depository Ltd.
Trade World, A Wing, 4th & 5th Floor,
Kamala Mills Compound, Lower Parel,
Mumbai - 400 013. ... Respondents
Mr. Rajesh Nagory, Advocate with Ms. Sabeena Mahadik,
Mr. Aayush Kothari, Mr. Sagar Hate, Advocates i/b Visesha Law
Services for the Appellant.
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Mr. Tomu Francis, Advocate with Mr. Arka Saha, Advocate for the
Respondent Nos. 1.
None for the Respondent Nos. 2.
Mr. Pradeep Sancheti, Senior Advocate with Mr. Rashid Boatwalla,
Mr. Aditya Vyas, Advocates i/b Manilal Kher Ambalal & Co. for the
Respondent Nos. 3.
CORAM : Justice Tarun Agarwala, Presiding Officer
Justice M. T. Joshi, Judicial Member
Per : Justice M. T. Joshi, Judicial Member
1. Aggrieved by the refusal of the respondent Nos. 1 BSE Ltd.
(hereinafter referred to as 'BSE') to defreeze the beneficial owner
account of the appellant vide letter dated March 23, 2018, the present
appeal is preferred.
2. There is a delay of 161 days in the filing of the appeal. For
the reasons stated in the application, the delay in the filing of the
appeal is hereby condoned. Misc. Application is allowed and the
appeal was heard on merit.
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3. The appellant submitted that the beneficial owner account as
detailed in the appeal memo was jointly held by her with her mother
Lt. Mrs. Kala Shah. The mother passed away on December 1, 2017
and as such the appellant became the sole account holder of the
same. She however received a communication from the respondent
Nos. 1 BSE that in view of SEBI circular dated September 7, 2016,
upon compulsorily delisting of the equity shares of SB & T
International Ltd., her account was frozen. According to the
appellant the circular provides that the promoter of the companies
shall not directly or indirectly access the securities market for a
period of 10 years from the date of compulsory delisting. The
appellant claimed that her husband was the promoter of said SB & T
International Ltd. She however was neither a director nor a promoter
and, therefore, the circular would not apply to her. She had,
therefore, applied to the exchanges for removing her name as a
promoter so far as the said company is concerned. However, the
exchange failed to do the needful and on the other hand, the letter
was issued. Hence the present appeal.
4. We have heard Mr. Rajesh Nagory, the learned counsel with
Ms. Sabeena Mahadik, Mr. Aayush Kothari, Mr. Sagar Hate, the
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learned counsel for the appellant with Mr. Tomu Francis, the learned
counsel with Mr. Arka Saha, the learned counsel for the respondent
Nos. 1 BSE and Mr. Pradeep Sancheti, the learned senior counsel
with Mr. Rashid Boatwalla, Mr. Aditya Vyas, the learned counsel for
the respondent Nos. 3 through video conference.
5. Respondent BSE had relied on the circular dated September
7, 2016 which provides as under :-
"Upon delisting the following consequences would be
applicable :-
1. Non transferability of any of equity shares by the
company by way of sell, pledge, etc. of any of the
equity shares;
2. Using of equity shares and corporate benefits
thereof held by the promoters / promoter group;
3. The promoters and the whole time directors of the
company shall not be eligible to become director of
any listing company."
6. It is also provided by the Regulation 24 of Securities and
Exchange Board of India (Delisting of Equity Shares) Regulations,
2009 (hereinafter referred to as 'Delisting Regulations') that these
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entities would be debarred from accessing the securities market for a
period of 10 years from the date of compulsory delisting.
7. Upon hearing both the sides, in our view, there is no merit in
the appeal. The appellant claims that she was not promoter of the
delisted company. She was however definitely promoter group
member i.e wife of the promoter of the company which was delisted.
The record would show that a long drawn process of delisting of the
company and thereafter freezing of the shares was undertaken as per
the rules and regulations.
8. The reading of circular dated September 7, 2016 would show
that vide clause 4(a), it is also provided that all the equity shares held
by the promoters / promoter group shall remain frozen i.e. the
depository shall not effect transfer in the promoters of such company,
till they provide an exit option to the public shareholders in
compliance with sub-regulation 3 of the Regulation 23 of the
Delisting Regulations. In view of the above facts, the following
order :-
ORDER
9. The appeal is hereby dismissed without any order as to costs.
610. The present matter was heard through video conference due to Covid-19 pandemic. At this stage it is not possible to sign a copy of this order nor a certified copy of this order could be issued by the Registry. In these circumstances, this order will be digitally signed by the Private Secretary on behalf of the bench and all concerned parties are directed to act on the digitally signed copy of this order.
Parties will act on production of a digitally signed copy sent by fax and/or email.
Justice Tarun Agarwala Presiding Officer Justice M. T. Joshi Judicial Member 25.08.2021 RAJALA Digitally by signed KSHMI NAIR RAJALAKSHMI H PTM Date: 2021.08.25 H NAIR 15:01:00 +05'30'