Bombay High Court
Pina Pankaj Shah And Anr vs Securities And Exchange Board Of India ... on 25 March, 2026
Author: R.I. Chagla
Bench: R.I. Chagla
2026:BHC-OS:7240-DB
RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc
Kavita S.J.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION (L) NO. 40029 OF 2025
IN
WRIT PETITION (L) NO. 39034 OF 2025
Ashok Dayabhai Shah & Ors., ...Applicants
In the matter between:
Bharat Nidhi Limited ....Petitioner
Versus
SEBI & Ors. ...Respondents
WITH
INTERIM APPLICATION (L) NO. 40053 OF 2025
IN
WRIT PETITION (L) NO. 39034 OF 2025
Pina Pankaj Shah & Anr., ...Applicants
In the matter between:
Bharat Nidhi Ltd. ....Petitioner
Versus
SEBI & Ors. ...Respondents
WITH
INTERIM APPLICATION (L) NO. 40000 OF 2025
IN
WRIT PETITION (L) NO. 39246 OF 2025
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Ashok Dayabhai Shah & Ors., ...Applicants
In the matter between:
Ashoka Marketing Limited & Anr., ....Petitioners
Versus
SEBI & Ors. ...Respondents
WITH
INTERIM APPLICATION (L) NO. 40048 OF 2025
IN
WRIT PETITION (L) NO. 39246 OF 2025
Pina Pankaj Shah & Anr., ...Applicants
In the matter between:
Ashoka Marketing Limited & Anr., ....Petitioners
Versus
SEBI & Ors. ...Respondents
WITH
INTERIM APPLICATION (L) NO. 40017 OF 2025
IN
WRIT PETITION (L) NO. 39354 OF 2025
Ashok Dayabhai Shah & Ors., ...Applicants
In the matter between:
Matrix Merchandise Limited & Ors., ....Petitioners
Versus
SEBI & Ors. ...Respondents
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WITH
INTERIM APPLICATION (L) NO. 40047 OF 2025
IN
WRIT PETITION (L) NO. 39354 OF 2025
Pina Pankaj Shah & Anr., ...Applicants
In the matter between:
Matrix Merchandise Limited & Ors., ....Petitioners
Versus
SEBI & Ors. ...Respondents
----------
Mr. Navroz Seervai, Senior Counsel a/w Ms. Arti Raghavan, Mr Pulkit
Sukhramani, Ms. Samreen Fatima and Mr. Juan Dsouza i/b JSA for
Applicant/s in IAL/40029/2025, IAL/40000/2025 and
IAL/40017/2025.
Mr. Gaurav Joshi, Senior Counsel a/w Mr Kunal Katariya i/b Ms
Garima Mehrotra for Applicant/s in IAL/40047/2025,
IAL/40048/2025, and IAL/40053/2025.
Mr. Janak Dwarkadas, Senior Counsel a/w Mr. Ameya Gokhale, Mr.
Rishabh Jaisani, Mr. Harit Lakhani, Mr. Ansh Kumar, Ms. Anushka
Bhardwaj and Ms. Swarupini Srinath i/b. Shardul Amarchand
Mangaldas & Co. for Petitioners in WPL/39354/2025.
Mr. Venkatesh Dhond, Senior Counsel a/w Mr. Ameya Gokhale, Mr.
Rishabh Jaisani, Ms. Karishma Rao, Mr. Harit Lakhani, Mr. Ansh
Kumar, Ms. Anushka Bhardwaj and Ms. Swarupini Srinath i/b
Shardul Amarchand Mangaldas & Co. for Petitioner in
WPL/39034/2025.
Mr. Ashish Kamat, Senior Counsel a/w Mr. Ameya Gokhale, Mr.
Rishabh Jaisani, Mr. Harit Lakhani, Mr. Ansh Kumar, Ms. Anushka
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Bhardwaj and Ms. Swarupini Srinath i/b Shardul Amarchand
Mangaldas & Co. for Petitioners in WPL/39246/2025.
Mr. J.J. Bhatt, Senior Counsel a/w Mr Vishal Kanade, Mr. Mihir Mody
and Mr. Yash Sutaria i/b. K. Ashar & Co. for Respondent - SEBI in
WPL/39034/2025.
Mr. Vishal Kanade a/w Mr. Mihir Mody and Mr. Yash Sutaria i/b K.
Ashar & Co. for Respondent - SEBI in WPL/39354/2025 and
WPL/39246/2025.
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CORAM : R.I. CHAGLA AND
ADVAIT M. SETHNA, JJ.
RESERVED ON : 26th FEBRUARY, 2026.
PRONOUNCED ON : 25th MARCH, 2026.
ORDER:(Per R.I. Chagla, J.)
1. By these Interim Applications, the Applicants who are minority shareholders of the respective Petitioner companies have sought impleadment as party Respondents in the respective Writ Petitions.
2. The respective Writ Petitions have impugned Order dated 17th November, 2025 ("Revocation Order" / "Impugned Order") passed by Securities and Exchange Board of India ("SEBI"), whereby Order dated 12th September, 2022 ("Settlement Order"), which settles the allegations against the Petitioners, contained in Show 4/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc Cause Notice ("SCN") dated 28th October, 2020 has been revoked.
3. These Interim Applications filed in the respective Petitions were heard together as they have been filed by the Applicants who are minority shareholders of the respective companies and original Complainants who had instituted proceedings when the Applicants claimed that SEBI failed to act on their complaints for over a period of six years.
4. The Applicants state that their complaints led to SEBI issuing a SCN pursuant to the orders passed by the Securities Appellate Tribunal ("SAT") and confirmed by the Supreme Court in proceedings instituted by the Applicants. It is the Applicants' case that their complaints were borne out from SEBI's SCN, which prima facie found that the Petitioners were in violation of disclosure requirements relating to promoters ("Disclosure Requirements") and minimum public shareholding ("MPS") Norms.
5. The Applicants who were aggrieved by SEBI not pursuing its SCN, and accepting settlement applications filed by the Petitioners, had challenged the Settlement Order in Writ Petition No.530 of 2023 filed before this Court inter alia contending that the 5/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc Settlement Order was illegal, ultra vires the SEBI (Settlement Proceedings) Regulations, 2018 ("Settlement Regulations") and that the Settlement Order stood revoked by operation of law on account of the Petitioner's failure to comply with its terms.
6. The Applicants state that in the Writ Petition No.530 of 2023, there was no finding that the Applicants were "strangers" to the Settlement Order, and that they had no locus standi to assail it. To the contrary, the Applicants were granted significant interim reliefs including: (i) a stay on measures taken by the Petitioner - Bharat Nidhi Limited ("BNL") in pursuance of the Settlement Order;
(ii) the Applicants were in fact found to be entitled to wide-ranging disclosures of documents (including internal SEBI documents and files) relating to the settlement applications and the Settlement Order.
7. The Applicants have further stated that the orders of disclosure obtained in their Writ Petition No.530 of 2023 were resoundingly confirmed by the Supreme Court (despite the Petitioners having appealed against the disclosure order inter alia on the ground that the Applicants lacked locus standi i.e. 'are strangers 6/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc to the settlement applications'). By a subsequent order of the Supreme Court, it was clarified that the Applicants were entitled to use the documents obtained through the disclosure orders (that relate to the Settlement Order) in inter partes proceedings, further affirming the Applicants' rights and interests in these proceedings.
8. The Applicants have submitted that as to the issue of revocation of the Settlement Order on the ground of failure to comply with its terms, it was the Applicants (during the proceedings in Writ Petition No.530 of 2023) that first highlighted that BNL had violated its undertaking in the Settlement Order, and that the order would stand revoked by operation of law. SEBI in fact had failed to act on this violation for almost half a year. Even after the Applicants highlighted the non-compliance, SEBI failed to act, thus displaying the long standing collusion between the Petitioners and SEBI (and underscoring the importance of the Applicants' impleadment in these proceedings). It is the Applicants' submission that SEBI only eventually revoked the Settlement Order, in an apparent attempt to avoid complying with the orders of disclosure passed in Writ Petition No.530 of 2023.
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9. The Applicants state that they have been parties in each round of proceedings before this Court and the Supreme Court relating to the Settlement Order i.e. since 2022. They have relied upon earlier round of proceedings instituted by the Petitioners (challenging the revocation of the Settlement Order by an earlier order of SEBI), wherein the Applicants were impleaded without objections from the Petitioners (or SEBI). The Applicants accordingly submitted that the Petitioners are estopped from objecting to the Applicants' impleadment in the present Writ Petitions.
10. The Applicants have submitted that the Petitioners' strenuous opposition to their impleadment in these proceedings is thus utterly malafide, in bad faith, and a desperate attempt to shut out vital issues and documents that are essential for the proper and complete adjudication of the captioned Petitions.
11. Mr. Navroz Seervai, learned Senior Counsel supported by Mr. Gaurav Joshi, learned Senior Counsel, has made submissions on behalf of the Applicants.
12. Mr. Seervai has submitted that the Petitioners' contention that the Applicants are only concerned with the "merits" of the 8/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc allegations against the Petitioners in the SCN, and with the Settlement Order or its revocation is utterly misconceived and untenable. He has submitted that the Applicants as shareholders of the Petitioners are vitally affected by the outcome of proceedings. He has submitted that should the captioned Writ Petitions be allowed (and the Settlement Order restored / revived), the Applicants' rights and interests as minority shareholders in the respective Petitioner companies would be vitally and prejudicially affected. He has submitted that the restoration of the Settlement Order would allow the Petitioners and its Undisclosed Promoters to continue perpetuating the violations alleged in the SCN to the detriment of the rights of the public shareholders of the Petitioners including the Applicants and evade consequential obligations under law. The public shareholders of the Petitioners would continue to be deprived of their legitimate rights (including securing liquidity and price discovery). Thus, the interests of the Applicants would be directly and vitally affected if the Revocation Order is set aside and quashed in the captioned Petitions.
13. Mr. Seervai has placed reliance upon the Judgment of the Supreme Court in Prabodh Verma and Ors., Vs. State of Uttar 9/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc Pradesh & Ors.,1 at Paragraph 28. The Supreme Court has held that the High Court ought not to decide a Writ Petition under Article 226 of the Constitution without the persons who would be vitally affected by its Judgment being before it as Respondents or at least by some of them being before it as Respondents. The Supreme Court in the facts of that case held that the Allahabad High Court ought not to have proceeded to hear and dispose of the Sangh's Writ Petition without insisting upon the reserve pool teachers being made Respondents to that Writ Petition, or at least some of them being made Respondents in a representative capacity, and had the Petitioners refused to do so, the Court ought to have dismissed that Petition for non-joinder of necessary parties.
14. Mr. Seervai supported by Mr. Joshi has submitted that the disclosure orders secured by the Applicants confirm that the settlement proceedings are not a private issue between SEBI and the Petitioners, and that minority shareholders such as the Applicants are directly and vitally concerned and affected by these proceedings, and are entitled to be impleaded in proceedings concerning the settlement. He has referred to Writ Petition No.530 of 2023 which 1 (1984) 4 SCC 251 10/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc had been filed by the Applicants seeking disclosure of the Investigation Report, SCN and all proceedings in connection with the Settlement Order. The disclosure had been granted by this Court to the Applicants, notwithstanding the strenuous objections/contentions as to confidentiality raised by the Petitioners. He has submitted that if the issue as to the settlement proceedings was purely between the regulator and the Petitioners (as the Petitioners suggest in their Replies), the Applicants would not be considered as entitled to these documents. He has submitted that whilst disclosure of the documents was strenuously opposed by the Petitioners, there was no objection on the ground of the Applicants lacking standings, or being strangers to the settlement. The objection was on the grounds that these documents were to be treated as confidential in terms of Regulation 29 of the Settlement Regulations. This Court rejected this objection, inter alia on the grounds that Regulation 29 only protected the documents from disclosure to the public, and the Applicants, as minority shareholders of the companies, were ".... integral to the company, having an inextricable concern and interest in the functioning and management of the company ." This Court also emphasized that SEBI is required to act while considering ".... the paramount interest of investors. " He has submitted that it is for the 11/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc reason that the settlement order between the regulator and the noticees to the settlement cannot be viewed as a private lis, and must be examined for its implications on the rights and interests of minority investors such as the Applicants.
15. Mr. Seervai has submitted that in the course of the proceedings in Writ Petition No.530 of 2023 the Applicants highlighted the Petitioner's failure to comply with the terms of the Settlement Order, and contended that the legal consequence of this failure was that the Settlement Order stood revoked by operation of law (Regulation 28, Settlement Regulations). This was done by way of an amendment to the Petition filed by the Applicants in the said Writ Petition.
16. Mr. Seervai has submitted that the revocation of the Settlement Order on 10th November, 2023 occurred in the context and during the course of proceedings instituted by the Applicants and in fact, the revocation appeared to be prompted by an interlocutory disclosure order passed by this Court, that both SEBI and the Petitioners desired to avoid complying with. They relied on the revocation (unsuccessfully) to contend that nothing survived in the 12/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc said Petition. The impugned Order was passed pursuant to an order of the Supreme Court dated 6th October, 2025 in Special Leave Petition filed by the Applicants.
17. Mr. Seervai has relied upon the fact that the Applicants were admittedly impleaded - without contest from the Petitioners or SEBI - in the earlier writ proceedings filed by the Petitioners (Writ Petition No.3977 of 2024 and tagged Petitions) to challenge the revocation of the Settlement Order in November, 2023. Neither SEBI nor the Petitioners objected to the Applicants' impleadment. He has submitted that this agreement of the parties to the impleadment amount to judicial admissions by the Petitioners and SEBI as to the right of the Applicants to be impleaded in proceedings that relate to the Settlement Order, including proceedings in respect of its revocation.
18. Mr. Seervai has submitted that the Petitioners have failed to demonstrate how the present proceedings are distinct from the proceedings in Writ Petition No.3977 of 2024 and tagged Petitions (which also challenged revocation of the Settlement Order). He has submitted that if the Petitioners recognized and admitted to the 13/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc Applicants' right to be impleaded in the earlier proceedings, they are estopped from objecting to the same in the present proceedings.
19. Mr. Seervai has placed reliance upon the Judgment of the Supreme Court in Udit Narain Singh Malpaharia Vs. Additional Member Board of Revenue, Bihar and Anr. ,2 at Paragraphs 9 and 10. The Supreme Court has determined the concept of "necessary parties" and "proper parties". The Supreme Court has held that a successful party is required to be made a party before the Court, particularly where in a writ of certiorari the defeated party seeks for the quashing of the order issued by the tribunal in favour of the successful party. Such party is a necessary party and the Petition filed for the issue of a writ of certiorari without making him a party or without impleading him subsequently, if allowed by the Court, would certainly be incompetent. A party whose interest are directly affected is therefore, a necessary party. The Supreme Court has also held that parties who may be described as proper parties i.e. parties whose presence is not necessary for making an effective order, but whose presence may facilitate the setting of all the questions that may be involved in the controversy. The question of making such a person as 2 1962 SCC OnLine SC 130 14/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc a party to a writ proceeding depends upon the judicial discretion of the High Court in the circumstances of each case. Either one of the parties to the proceeding may apply for the impleading of such a party or such a party may suo motu approach the Court for being impleaded therein.
20. Mr. Seervai has submitted that the Settlement Order having been revoked would make the Applicants as successful parties. This in view of their challenge to the Settlement Order which has resulted in its revocation.
21. Mr. Seervai has submitted that a salient fact that the Petitioners have suppressed from this Court in the Petitions is that the term of the Settlement Order that the impugned Order finds had not been complied with was proposed by the Petitioners itself as a "voluntary undertaking". The settlement term in question required that BNL make such an exit offer to all shareholders for a period of 3 months promptly after receiving the Settlement Order, at the stipulated price. Compliance with this term was to be reported within 15 days of the Settlement Order i.e. by 27 th September, 2022. BNL proposed this term in correspondence with SEBI over 9 months 15/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc before the Settlement Order was finalized and issued. BNL's exit offer could only be availed of by 1.067% of its shareholders. It is evident that at the time of proposing this term BNL was aware of these statutory restrictions, but voluntarily and consciously proposed a settlement term that it knew could not be complied with. He has submitted that BNL had clearly entered into the Settlement Order with the fraudulent intention. This is a relevant consideration that ought to be placed before this Court while it exercises its discretionary jurisdiction under Article 226.
22. Mr. Seervai has submitted that the Applicant's impleadment will enable this Court to appreciate certain facts and circumstances that are vital to the adjudication of the subject Petitions, viz. that the Settlement Order itself is an exemplar of collusion between the Petitioners and SEBI and the Petitioners' disingenuous reliance on SEBI's inaction to assail the impugned Order.
23. Mr. Seervai has submitted that the Petitioners' allegations as to Applicants' motives have been unsuccessfully raised on multiple prior occasions. BNL has alleged that the Ashok Shah group have 16/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc approached the Court / Tribunal with unclean hands / trying to extort higher values of the shares of BNL in the Affidavits / Submissions in the earlier proceedings.
24. Mr. Seervai has submitted that the Applicants have a right and interest in these proceeding i.e. independent to that of the regulator, in particular the provision in the settlement order relating to the exit offer to public shareholders of BNL. He has referred to the Settlement Order under which the BNL was to provide an exit offer on specific terms, failing which the Settlement Order would stand revoked against all the Petitioners. The exit offer was a "voluntary undertaking" by BNL. By its plain terms, an exit should be offered to all public shareholders. BNL's case is that it has no promoters, so 100% of its shareholders are public, and should have made this offer within 15 days of the Settlement Order. Instead, an offer was only made to 1.067%. He has submitted that the revocation is on account of BNL's failure to comply with this very requirement. The Applicants are directly affected in the adjudication of such an issue. He has submitted that the contention of the Petitioners' that the Applicants did not tender their shares in the exit offer made by BNL pursuant to the Settlement Order is immaterial. Given that the buy-back offer 17/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc was only for 1.067% of the entire shareholding, it would be meaningless to tender shares. He has submitted that the fact that the Applicants did not participate in the exit offer made pursuant to the Settlement Order does not foreclose its right to participate in these proceedings and seek compliance with the relevant laws, including Regulation 28 of the Settlement Regulations which provides that settlement orders shall stand revoked upon non-compliance.
25. Mr. Seervai has submitted that the Applicants would be bound by the determination in these proceedings as to whether BNL has complied with the terms of the Settlement Order to provide an exit to all public shareholders. He has placed reliance upon Judgment of the Supreme Court in Aliji Momonji v Lalji Mavji ,3 at Paragraph 5 in support of its contention that the Applicants are necessary parties. He has also placed reliance upon the Judgment of the Supreme Court in Kasturi Vs. Iyyamperumal & Ors,4 at Paragraph 7, which has also been relied upon by the Petitioners in support of his contention that even applying the test laid down in the said Judgment, given that the public shareholders have rights under the Settlement Order, they are the necessary parties.
3(1996) 5 SCC 379 4(2005) 6 SCC 733 18/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc
26. Mr. Seervai has submitted that it is well settled that even if there is a authority that carries out the objects of a statute, the principal beneficiaries of the law have a right to be heard. In this context he has placed reliance upon the Judgment of the Supreme Court in Fertilizers & Chemicals Tranvancore Ltd. Vs. Regional Director, Employees' State Insurance Corporation & Ors.,5 at Paragraph 5 - 9. He has also placed reliance upon the Judgment of the Supreme Court in Prabodh Verma (Supra) where the State of Uttar Pradesh chose not to challenge a Judgment of the Allahabad High Court that struck down a law passed by it, the Supreme Court held that the persons affected (on whose behalf the proceedings were being contested by the State) ought to have been heard.
27. Mr. Seervai has submitted that the Applicants as minority shareholders of a company have an independent right to be heard on the issue of revocation. He has submitted that even under Order 1 Rule 8(3) of the Code of Civil Procedure, 1908 ("CPC") when a Suit is instituted or defended by a party in a representative capacity, any person on whose behalf or for whose benefit the proceedings are instituted / defended may apply to the Court to be made a party. 5(2009) 9 SCC 485 19/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc
28. Mr. Seervai has submitted that the principles under CPC in respect of impleadment of necessary or proper parties, do not apply strictly to writ proceedings (Section 141 CPC). It is well settled that Article 226 of the Constitution vests High Courts with extraordinary powers, and that these proceedings need not adhere procedurally to the strict requirements of the CPC.
29. Mr. Seervai has submitted that Rule 644 of the Bombay High Court (OS) Rules (that relates to the issue of writs under Article 226 of the Constitution (other than Habeas Corpus)) provides that if any person who is not a party to the proceeding desires to be heard on the application and it appears to the Court that he has a substantial interest in the dispute or the question to be decided therein and is a proper person to be heard, the Court may allow him to appear on such terms and conditions as it thinks proper.
30. Mr. Seervai has submitted that the relevant test is whether the party has a "substantial interest in the dispute or the question to be decided". The Court is entitled to exercise its discretion and determine this, and is not bound by whether the Petitioner consents to the impleadment of such a party. 20/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 :::
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31. Mr. Seervai has submitted that the Petitioners' reliance on the fact that the Applicants were not heard before SEBI on the issue of revocation is irrelevant. This contention amounts to an impermissible conflation between the principles of natural justice (which it is well settled may be waived), and the issue of locus standi. He has submitted that if the Applicants had the right / standing to press the contention in WP 530 of 2023 that the Settlement Order stands revoked (by virtue of non-compliance), they also have the right to be heard in a Petition where the revocation is being assailed. The Applicants were not parties to or heard in respect of the settlement applications. However, they were not seen as lacking locus standi to assail to Settlement Order. He has submitted that it is only today that the Petitioners have sought to claim that the Applicants didn't have locus to challenge the Settlement Order. The Petitioners' contention is contrary to the pleadings filed by them in the said proceedings.
32. Mr. Seervai has submitted that the Applicants are not aggrieved by hearing not having been granted by SEBI since the Settlement Order was revoked. However, the Applicants would be aggrieved if the present proceedings culminated in the Revocation 21/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc Order being quashed. He has accordingly submitted that the Applicants are required to be impleaded in the captioned Petitions to protect their rights and interest.
33. Mr. Janak Dwarkadas, learned Senior Counsel appearing for the original Petitioners / Respondents in Interim Application (L) No. 40017 of 2025 has submitted that the Applicants are (i) strangers to the present proceedings, (ii) have not been heard by SEBI, (iii) have no interest in the subject matter of the Writ Petition and (iv) are not even remotely affected by the outcome of the present Writ Petition.
34. Mr. Dwarkadas has submitted that even if the Petitioners succeed in the Writ Petition and the Revocation Order is set aside by this Court, the Applicants will have their remedy to file independent proceedings to challenge the Settlement Order / agitate their grievances pertaining to the violations of the SCN, if they wish to do so. Therefore, the presence of the Applicants is neither necessary nor desirable in the present proceedings.
35. Mr. Dwarkadas has submitted that the Applicants are disgruntled shareholders who had approached this Court with 22/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc unclean hands and ulterior motives and cannot claim any equities in their favour. He has submitted that the Applicants seek to expand the scope of a limited regulatory challenge into a broader dispute, which is unsustainable at the stage of testing the legality of the Revocation Order. The Applicants under the garb of espousing minority shareholder interest, only seek to extract a higher and unreasonable value for the shares held by them in the BNL and have also stalled the exit offers for the other non-litigant shareholders.
36. Mr. Dwarkadas has submitted that the Applicants have sought to interdict / disrupt BNL's attempt to provide an exit offer to all shareholders, in 2022 and 2025, including under the Settlement Order. Importantly, the Applicants themselves did not tender their shares during the exit process initiated in 2019, 2022 and 2025.
37. Mr. Dwarkadas has submitted that a necessary party is a person in whose absence no effective order can be passed by the Court. Whereas a proper party is a person whose presence would enable the Court to effectively adjudicate the disputes before it. He has in this context placed reliance upon the Judgment of the Supreme Court in Mumbai International Airport Private Limited Vs 23/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc Regency Convention Centre and Hotels Private Limited6 at Paragraph 13 -15.
38. Mr. Dwarkadas has submitted that the Applicants do not meet the threshold as laid down in the said Judgment as they are neither necessary nor proper parties to the Writ Petition.
39. Mr. Dwarkadas has submitted that the captioned Writ Petition challenges the Revocation Order passed by SEBI revoking the Settlement Order. The scope of determination in the Writ Petitions are narrow and limited to the compliance or non-compliance of the Settlement Order by the Petitioners. This is a lis between Petitioners and SEBI and will be decided based on the findings of SEBI in the Revocation Order. Thus, SEBI is the only proper, competent and sole Respondent required to defend its decision contained in the Revocation Order which is impugned in the Petition. There is therefore no question of joinder of any third party, much less the Applicants.
40. Mr. Dwarkadas has submitted that the Applicants' presence is neither necessary nor proper to explain, supplement or 6 2017 7 SCC 417 24/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc supplant SEBI's reasons, which are contained in the Revocation Order. He has placed reliance upon the Judgment of the Supreme Court in Mohinder Singh Gill Vs. Chief Election Commissioner New Delhi7, at Paragraph 8 in this context.
41. Mr. Dwarkadas has submitted that importantly, the Applicants were never part of the deliberations/hearing leading up to passing of the (i) Settlement Order or (ii) the Revocation Order (which is under challenge in the Writ Petition). The Order dated 6th October 2025 passed by the Supreme Court also recognised SEBI's primacy and independence in deciding and defending its orders and did not pass any directions qua grant of hearing to the Applicants, which underscores that the present contest in the Writ Petition is squarely between the Petitioners and SEBI. He has also referred to the Letter dated 17th October, 2025 addressed by the Applicants to SEBI requesting a hearing in respect of the revocation of the Settlement Order. However, admittedly, no such hearing was granted to the Applicants by SEBI. He has submitted that the Applicants did not challenge this refusal by SEBI, despite their claim of having vital interest in the proceedings, and neither did they approach the Courts 7(1978) 1 SCC 405 25/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc to seek an opportunity of hearing by SEBI. This demonstrates that the Applicants have no role to play with respect to the revocation of the Settlement Order/passing of the Revocation Order, which is the subject matter of the Writ Petition.
42. Mr. Dwarkadas has submitted that if the Applicants are aggrieved by any act of SEBI, it is open for the Applicants to challenge such action. However, they cannot claim to have a vested right to implead themselves in proceedings which are purely between the Petitioners and the regulator, SEBI.
43. Mr. Dwarkadas has submitted that by the Order dated 1 st December 2023 passed by this Court in the prior Applicants' Writ Petition, whilst disposing of the Writ Petition had expressly kept open rights of the Applicants with respect to their grievances qua (i) the violations alleged in the SCN as well as (ii) the Settlement Order to be agitated at the appropriate time in appropriate proceeding. He has submitted that clearly the Applicants' right to agitate any issue is not taken away and has been expressly kept open by this Court. Further, the issue of whether the Settlement Order was valid or could have been passed by SEBI is not in question in the present Writ 26/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc Petition, and can be agitated by the Applicants, if the need arises. He has submitted that the cause of action of the prior Applicants' Writ Petitions and present Writ Petition are completely different. Therefore, the Applicants are not vitally interested in the present Writ Petition and their right to agitate their grievances, including qua the Settlement Order, would not be foreclosed by any orders passed in the present Writ Petition (including if the Petitioners were to succeed in their challenge to the Revocation Order).
44. Mr. Dwarkadas has submitted that the disclosure of documents granted by Order dated 23 rd October, 2023 was related to the subject matter of the prior Applicants Writ Petitions i.e. challenge to the validity of the Settlement Order. The entitlement of the Applicants to certain documents in proceedings instituted by them (wherein the scope of the proceeding was distinct) is an irrelevant factor and cannot be construed to mean that the Applicants have locus in the present Writ Petition.
45. Mr. Dwarkadas has submitted that the Applicants are accordingly neither necessary nor proper parties to the present Writ Petition and ought not to be impleaded or else allowing the 27/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc Applicants to implead themselves in the present proceedings would protract the litigation and expand the scope of the Writ Petition.
46. Mr. Dwarkadas has submitted that the reliance placed by the Applicants on their impleadment in the previous Writ Petitions challenging the previous Revocation Order is erroneous. The Order dated 25th January, 2024 which impleaded the Applicants in the previous Writ Petitions was based on the consent/concession of the Petitioners. Such an order, which is based on a party's consent is not a precedent and has no binding force.
47. Mr. Dwarkadas has submitted that there is a fundamental distinction between the previous Writ Petitions and the present Writ Petitions. It was the Petitioners' case that the previous Revocation Order (which was challenged by the Previous Writ Petition) was a knee jerk reaction by SEBI in order to evade compliance of the disclosures directed under the Order dated 23rd October 2023. This has also been acknowledged by the Applicants in their submissions.
48. Mr. Dwarkadas has submitted that as a contrast, the present Writ Petition challenges the Revocation Order which is a detailed order that has been passed after hearing the Petitioners. The 28/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc Revocation Order has nothing to do with the Order dated 23rd October 2023 passed in the Prior Applicant Writ Petitions. The Revocation Order will be tested on the basis of the reasons contained therein and the Applicants certainly have no role play in the present Writ Petition.
49. Mr. Dwarkadas has submitted that the ealier impleadment by consent in a distinct proceeding (Previous Writ Petition), based on distinct grounds of challenge, does not create a precedent or entitlement in favour of the Applicants to be joined in every subsequent proceeding, including the present Writ Petition.
50. Mr. Dwarkadas has distinguished the Judgments cited by the Applicants viz. Prabodh Verma (Supra) and Udit Narain (Supra) on the ground that these decisions dealt with instances where the order/decision under challenge had been passed in favour of certain parties such as reserve pool teachers and licensees. In essence, the subject matter of those cases was a lis between the Petitioners therein and the successful parties such as reserve pool teachers and licensees. Therefore, the Supreme Court in the said cases held that such parties who were successful (since orders/decisions had been taken in their 29/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc favour) and necessary, would need to be joined since the order/decision under challenge directly affected them.
51. Mr. Dwarkadas has submitted that in the present case, (i) the Applicants are not successful parties in whose favour a decision has been taken, (ii) the Applicants are neither necessary nor desirable for the adjudication of the Writ Petition, (iii) there is no lis between the Petitioners and the Applicants which is the subject matter of the Writ Petition, and (iv) any order passed in the Writ Petition will not in any manner affect the rights of the Applicants.
52. Mr. Dwarkadas has submitted that the Applicants' contention that they are successful parties is a red herring and an attempt to self-credit themselves and is completely bogus. The fact that the Applicants are not successful is evident from the fact that the prior Applicant's Writ Petitions were disposed of without any adjudication on merits. Further, the Applicants' contention that prior Applicants' Writ Petitions were amended to contend that the Settlement Order stands automatically revoked is completely irrelevant and a red herring. As per the Applicants themselves SEBI revoked the Settlement by the Previous Revocation Order, as a knee- 30/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 :::
RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc jerk reaction to the Order dated 23rd October 2023. Therefore, the revocation of the Settlement Order had nothing to do with the Applicants' amendment to the prior Applicants' Writ Petitions contending automatic revocation.
53. Mr. Dwarkadas has submitted that the Applicants are attempting to conflate two distinct proceedings and cause of actions. The present Revocation Order is an independent order that has been passed by SEBI for the reasons contained therein and has no connection with the Applicants. Pertinently, there is no adjudication that the Revocation Order is a result of the Applicants' efforts.
54. Mr. Dwarkadas has submitted that in the event, the Revocation Order is set aside in the present Writ Petition, the legal consequence would be that the Settlement Order stands revived. At that stage, it would be open to the Applicants to take appropriate actions to agitate their grievances qua the Settlement Order, in terms of the Order dated 1st December 2023 (or even independently dehors the liberty granted by the said order).
55. Mr. Dwarkadas has distinguished the Judgment relied upon by the Applicants viz. Aliji Momonji (Supra) as wholly 31/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc inapplicable in the present case. In the said case, it was held that since a landlord has a substantial and direct interest in the building, the demolition of the same would materially affect the right, title and interest of the landlord and bind the landlord. In the present case, the Applicants have no substantial or direct interest in the Writ Petition and can avail its independent remedy, if the need arises.
56. Mr. Dwarkadas has submitted that SEBI, under a statutory mandate (in all cases), acts in the interest of the minority shareholders/investors. The Applicants' interests would therefore be sufficiently represented through SEBI. In the present Writ Petition, SEBI will defend the Revocation Order passed by it. He has placed reliance upon the statement and objects of the SEBI Act. In this context he has submitted that to permit the Applicants' intervention will be to place some element of doubt on the integrity of the regulator and the ability of this Court to arrive at a fair determination on whether there is compliance of the Settlement Order or not, in the absence of third parties.
57. Mr. Dwarkadas has distinguished the Judgment relied upon by the Petitioners viz. Fertilizers & Chemicals (Supra) on facts 32/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc and he has submitted that this Judgment is wholly inapplicable in the present case. In that case, this Court held that the ESI Court ought to have determined whether certain persons were employees or not to whom benefit by ESIC could be extended. It is in this context the Court held that the persons/employees ought to have been impleaded. The ESIC is merely an agency to implement and has nothing to lose if the decision is given against the employees. This certainly cannot be equated with SEBI which in addition to regulating the securities market, acts in the interest of the investors.
58. Mr. Dwarkadas has submitted that in so far as Rule 644 of the OS Rules which has been relied upon by the Applicants, this Rule does not come to the aid of the Applicants as they neither have any substantial interest nor are proper parties to be heard. In fact, clearly, the OS Rules enshrine the principles of proper and necessary party enshrined in the CPC. Therefore, the reliance on OS Rules is to the benefit of the Petitioners.
59. Mr. Dwarkadas has submitted that in Public Service Commission, Uttaranchal v. Mamta Bisht and Others8 at Paragraph 9- 10, after considering Prabodh Verma (Supra) and Udit Narain 8(2010) 12 SCC 204 33/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc (Supra), the Supreme Court has held that the principles enshrined in CPC are applicable to the Writ Petitions.
60. Mr. Venkatesh Dhond, learned Senior Counsel appearing for the Respondents in Interim Application (L) No.40029 of 2025 in Writ Petition (L) No.39034 of 2025 has supported the submissions of Mr. Dwarkadas. He has submitted that the Applicants cannot claim credit for the actions or measures taken by SEBI. He has submitted that the present proceedings filed by the Petitioners challenging the decision of SEBI to revoke the Settlement Order by way of the impugned order / Revocation Order is not on the basis of the complaint made by the Applicants, but on a decision taken by SEBI to revoke the settlement order. The Applicants have no role whatsoever on the revocation of the Settlement Order.
61. Mr. Dhond has submitted that the decision of SEBI to revoke the Settlement Order is for reasons / identified grounds stated in the decision i.e. the impugned Order / Revocation Order, itself. The stated decision is that BNL did not comply with the Settlement Order. The correctness of the decision of revocation has to, therefore, be tested on the basis of the reasons given in the impugned Order / 34/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc Revocation Order itself. He has also placed reliance upon Mohinder Singh Gill (Supra) in this context.
62. Mr. Dhond has submitted that the only enquiry that this Court, therefore has to do so is to determine whether there is non compliance by BNL of the conditions imposed in the Settlement Order or not. This is an enquiry which needs only two participants viz. (i) BNL, which asserts that the finding of non-compliance is incorrect and (ii) SEBI, which asserts that the finding of non- compliance is correct.
63. Mr. Dhond has submitted that the Applicants are neither required nor necessary nor even desirable for determining whether there is a compliance or non-compliance with the order of SEBI (i.e. the Settlement Order).
64. Mr. Dhond has submitted that the tests to determine a necessary party are (i) there must be a right to some relief in relation to the subject matter of the proceedings; (ii) no effective decree can be passed in the absence of such parties. He has placed reliance on Kasturi Vs. Iyyamperumal (Supra) in this context. 35/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 :::
RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc
65. Mr. Dhond has submitted that the Applicants are not necessary parties since they neither have a right to any reliefs in the present proceedings (and no reliefs are being sought against the Applicants) nor it is the case that in their absence, the challenge to the Revocation Order passed by SEBI cannot be adjudicated upon.
66. Mr. Dhond has submitted that the Applicants are neither a proper party i.e. a party in whose presence it would be necessary to enable the Court to completely adjudicate upon the issues / questions raised in the proceedings. There is absolutely no legal impediment in proceeding with the present Writ Petition in the absence of the Applicants.
67. Mr. Dhond has submitted that the Applicants were not parties to the proceedings before SEBI. Naturally, therefore, the Applicants have no vested right to interfere with respect to a regulator's decision to settle the complaint and / or revoke the same.
68. Mr. Dhond has drawn a parallel with the limited role of SEBI under Section 24-A of the SEBI Act. Section 24-A of the SEBI Act gives the SAT or the relevant Court the power to compound 36/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc certain offences. He has placed reliance upon Prakash Gupta Vs. SEBI9 at Paragraph 2, 90, 93, wherein the Supreme Court has held that SEBI's consent is not required for the Court to pass an order of compounding. Similarly, in the present case, when SEBI, as the authority takes a decision to compound or settle any proceedings, certainly, the consent / concurrence of private persons, who might be complainants (such as the Applicants) is not required.
69. Mr. Dhond has submitted that no prejudice will be caused to the Applicants since by way of Order dated 1 st December, 2023 (while disposing of the Applicants' Writ Petitions), the Applicants were granted liberty to pursue their grievances, including in relation to the Settlement Order, in appropriate proceedings before this Court. Therefore, clearly the Applicants' right to agitate any issue is not taken away.
70. Mr. Dhond has submitted that with respect to the allegations of past collusion with SEBI and that SEBI went slow and / or did not take any action against BNL, unless it was compelled to do so, is entirely irrelevant in this proceeding. It is not the case of the Applicants that SEBI is today in active collusion with BNL. If that be 9 (2021) 17 SCC 451 37/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc the case, there is neither any warrant nor is it desirable that a third party should be allowed to participate in proceedings beween a regulator and a regulated entity. To permit this will be to place some element of doubt on the integrity of the regulator and the ability of this Court to arrive at a fair determination on whether there is compliance of the Settlement Order or not. Permitting the participation of the Applicants in such proceedings will also send a wrong message that for determining the validity of the regulator's decision, third parties' involvement or participation is required.
71. Mr. Dhond has submitted that the Applicants having been previously allowed to intervene in the First BNL Writ Petition had raised frivolous and irrelavant contentions beyond the subject matter before this Court in an attempt to expand the scope of the proceedings and thereafter contended before the Supreme Court that such contentions were not considered by this Court.
72. Mr. Dhond has drawn a fundamental distinction between the proceedings (First BNL Writ Petition) in which BNL agreed to join the Applicants. He has submitted that unlike the earlier round / First BNL Writ Petition which had impuged the non-speaking previous 38/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc Revocation Order dated 10th November 2023, there is now a speaking order of revocation i.e. Revocation Order / Impugned Order dated 17th November, 2025 which has revoked the Settlement Order by specifically giving reasons. Either these reasons in the Revocation Order / Impugned Order are right or these reasons are wrong. Therefore, the only enquiry is compliance or non-compliance of the Settlement Order for which the Applicants are not necessary.
73. Mr. Dhond has submitted that during the course of arguments, it was the contention of the Applicants that the information in the present proceeding will assist the Applicants in pursuing their appeals before the SAT. The fallacy of this reason is evident in the reason itself. Joinder of persons in the Writ Petition is not to be done because the joinder will generate some information which can even be used for collateral proceedings. In any event, the proceedings before this Court are relating to the Settlement Order and its revocation, whereas the SAT proceedings are proceedings relating to a separate issue of alleged violations of the exit circular, and hence are distinct and cannot be conflated.
74. Mr. Dhond has submitted that the Applicants have 39/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc suppressed the fact that an earlier attempt to interlink these distinct proceedings was rejected by SAT by its Order dated 17 th December, 2024 and this was carried to the Supreme Court unsuccessfully where the Special Leave Petition was disposed of with liberty to file a Review Application before SAT. The Review Application, thereafter filed, itself has been dismissed by the SAT by an Order dated 5 th December, 2025.
75. Mr. Dhond has accordingly submitted that for the aforesaid reasons, it would set a wholly incorrect precedent to allow participation by the Applicants in the present proceedings. He has accordingly sought for the present Applications be dismissed with costs.
76. Mr. Ashish Kamat, learned Senior Counsel appearing for the Respondents in Interim Application (L) No.40048 of 2025 in Writ Petition (L) No.39246 of 2025, has supported the submissions of Mr. Dwarkadas and Mr. Dhond. He has placed reliance upon the Judgment of the Supreme Court in Municipal Corporation of Delhi Vs. Gurnam Kaur10 at Paragraph 10. This is in support of his submission that when the order was made by consent of the parties, 10 (1989) 1 SCC 101 40/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc viz. Order dated 25th January, 2024 which impleaded the Applicants, the Court did not adjudicate upon the rights of the parties nor did it lay down any principle. He has accordingly submitted that the impleadment of the Applicants in prior proceedings by consent cannot be relied upon in the present proceedings, as a precedent. He has also sought for the setting aside of the impleadment Applications with costs.
77. Having considered the submissions, the Applicants who are admittedly the Shareholders of the Petitioners are not strangers to the settlement proceedings (including Settlement Orders passed and the subsequent revocation(s)). The Applicants have a vital and direct interest in the outcome of these proceedings as it directly affects their rights as minority Shareholders. In the event, the Writ Petitions are allowed, the Applicants' rights and interest as minority Shareholders would be vitally and prejudicially affected. The restoration of the Settlement Order for which the Applicants have opposed in prior proceedings including by filing Writ Petitions in this Court would be to the detriment of the Applicants. It is the Applicants contention that upon the restoration of the Settlement Order it would allow the Petitioners and their Undisclosed Promoters 41/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc to act in detriment of the rights of the public shareholders of Petitioners including the Applicants' rights.
78. The Applicants have been parties in earlier round of proceedings before this Court and the Supreme Court relating to the Settlement Order since 2022. It is pertinent to note that the Applicants had challenged the legality of the Settlement Order through Writ Petitions filed in this Court and during the course of proceedings in Writ Petition No.530 of 2023, the Applicants had brought to the notice of this Court the alleged failure on the part of the BNL to comply with the terms of the Settlement Order including making exit offer to all Shareholders for a period of three months promptly after receiving the Settlement Order at stipulated price. The compliance with these terms was to be reported within 15 days of the Settlement Order i.e. by 27th September, 2022. BNL proposed these terms in correspondence with SEBI over 9 months before the Settlement Order was finalized and issued. It is pertinent to note that BNL's exit offer could only be availed of by 1.067% of its Shareholders. The Applicants have submitted that this is a relevant consideration that ought to be placed before this Court whilst exercising its discretionary jurisdiction under Article 226 of the 42/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:51 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc Constitution of India.
79. The Applicants have in their Writ Petitions filed before this Court, in particular Writ Petition No.530 of 2023, had amended their Petition to seek revocation of the Settlement Order on the ground that BNL had failed to comply with the terms of the Settlement Order and by virtue of which it stood revoked by operation of law. It is during this Writ Petition filed by the Applicants that the Settlement Order was revoked by SEBI on 10 th November, 2023.
80. It is further pertinent to note that the Applicants were impleaded in the Writ Petitions filed by the Petitioners challenging the revocation of the Settlement Order in November, 2023. Although, it is the Petitioners' contention that the impleadment of the Applicants was by consent, this impleadment was preceded by observations made by this Court in Writ Petitions filed by the Applicants that the Applicants, as minority shareholders of the companies, were "....integral to the company, having an inextricable concern and interest in the functioning and management of the company." Further, this Court had emphasized that SEBI is required 43/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:52 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc to act while considering "....the paramount interest of investors." It is for this reason that this Court had considered the settlement order between the regulator and the noticees to the settlement not to be viewed as a private lis, and must be examined for its implications on the rights and interests of minority investors such as the Applicants.
81. The Petitioners have contended that the present proceedings are restricted to judicial review of the impugned order passed by SEBI and any attempt to assail the validity of the Settlement Order is beyond the scope of the present proceeding. This contention overlooks the scope and ambit of the present Writ Petition under Article 226 viz. to consider, whether the Settlement Order is to be revived and for which the participation of the Applicants cannot be foreclosed. The impleadment of the Applicants in our view would be necessary as it would enable this Court to effectively adjudicate the disputes before it.
82. Although, by the Order dated 1st December 2023, the Applicants' Writ Petitions were disposed of by expressly keeping open the rights of the Applicants with respect to the grievance qua (i) the violations alleged in the SCN as well as (ii) the Settlement Order to 44/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:52 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc be agitated at the appropriate time in appropriate proceeding, the Applicants would nevertheless be bound by the determination in these proceedings on the issue of whether the Petitioners had complied with the terms of the Settlement Order. Further, we cannot overlook the fact of the Applicants also raising the issue of non compliance of the settlement terms in their Writ Petitions. Hence, upholding or quashing of Revocation Order would have a direct bearing on the Applicants' interest.
83. The Petitioners have contended that only SEBI needs to defend its Revocation Order. SEBI acting as a regulator would take care of interest of the Shareholders in a representative capacity. This contention in our view is misconceived, particularly considering that the Applicants as minority shareholders would be vitally affected by the outcome of these proceedings. The Judgments relied upon by the Applicants viz. Fertilizers and Chemicals Tranvancore Ltd. (Supra) and Prabodh Verma (Supra) have considered similar contentions as raised by the Petitioners herein. The Supreme Court has recognized that persons affected on whose behalf the proceedings have been instituted by the Authority ought to be heard. In the present case, SEBI is Statutory Body tasked with protecting interest of Investors in 45/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:52 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc the Securities market, but the Applicants as minority Shareholders of the Petitioners have an independent right to be heard on the issue of revocation. The Judgment relied upon by the Petitioners viz. Prakash Gupta (Supra) has no bearing on the issue of whether Investors are entitled to be heard as parties if they are affected by the subject matter of the proceedings.
84. We find much merit in this submission on behalf of the Applicants that a Court in determining impleadment of a party in writ proceedings, would have to consider whether the party whose impleadment is sought will be vitally affected by the outcome of the proceedings. The Judgments relied upon by the Applicants viz. Prabodh Verma (Supra); Udit Naraian Singh (Supra) are apposite. Further, Rule 644 of the Bombay High Court (OS) Rules which relates to the issue of writs under Article 226 of the Constitution provides that where it appears to the Court that the person has a substantial interest in the dispute or the question to be decided therein and is a proper person to be heard, the Court may allow him to appear on such terms and conditions as it thinks proper. The Court is entitled to exercise its discretion and determine this. The Court is not bound by whether the Petitioners' consent to the impleadment of the said 46/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:52 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc person.
85. The Petitioners' reliance on the fact that the Applicants were not heard before SEBI on the issue of revocation is irrelevant. We are determining here the issue of locus standi and not the principles of natural justice. The Applicants in the earlier round were not seen to be lacking in locus standi to assail the Settlement Order and it appears to be only now that the Petitioners claim that the Applicants don't have locus to challenge the Settlement Order.
86. We do not find merit in the distinction drawn by the Petitioners on the Judgments relied upon by the Applicants viz.on the ground that the decisions were on the facts of those cases.
87. We also do not find merit in the contentions of the Petitioners that since the decision of SEBI to revoke the Settlement Order is for the reasons / identified grounds stated in the decision i.e. impugned Order / Revocation Order itself, the correctness of the decision of the revocation has to be decided on the basis of the reasons given in the Revocation Order itself and hence, the Applicants are not required to be heard. Although, it is settled law as laid down by the Supreme Court in Mohinder Singh Gill (Supra) that 47/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:52 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc the correctness of the decision is to be tested on the reasons given in that decision itself, the Applicants would require to be impleaded in these proceedings in view of their being vitally affected by the outcome of the proceedings and given the fact that they had raised the issue of revocation in their prior Writ Petitions pursuant to which the Settlement Order was eventually revoked by SEBI. Upholding or quashing of Revocation Order would thus have a direct bearing on the Applicants' interest.
88. The Petitioners have sought to draw a parallel with the limited role of SEBI under Section 24-A of the SEBI Act and reliance has been placed on Prakash Gupta Vs. SEBI (Supra) which has held that SEBI's consent is not required for the Court to pass an order of compounding. This decision is not relevant as the present case is one of impugning the revocation of Settlement Order and that the Applicants would be vitally affected by the outcome of these proceedings.
89. We accordingly find much merit in the impleadment Applications. The Interim Applications are allowed and the Applicants are permitted to be impleaded as proper and necessary 48/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:52 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc party Respondents in the above Writ Petitions.
90. The Interim Applications are accordingly disposed of in the above terms. There shall be no orders as to costs.
[ADVAIT M. SETHNA, J.] [R.I. CHAGLA, J.] 49/49 ::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:18:52 :::