JUDGMENT

VIKRAMAJIT SEN, J.

1. This Appeal assails the Judgment dated 19.4.2006 of the Securities Appellate Tribunal which upheld the order of the Securities and Exchange Board of India dated 1.8.2003. The factual matrix is that one Mr. V.P. Garg (hereinafter referred to as ‘Garg’) entered into an ‘Assisted Sector Agreement’ with the Haryana State Industrial Development Corporation Limited (hereinafter referred to as ‘HSIDC’) on 4.1.1993, for the purpose of setting up a modern resort hotel complex at Village Chowky, Tehsil Kalka, Haryana. The parties agreed to collaborate for the profitable implementation and operation of the project in the assisted sector through a company already incorporated by Garg under the name and style of Polo Hotels Ltd. (hereinafter referred to as the ‘Target Company’). HSIDC extended a term loan to Garg and also subscribed to 3,00,000 shares of Rs. 10/-each of the Target Company. Clause 24 of the Agreement provided for buy back of the shares of HSIDC. The said clause is reproduced for facility of reference:

BUY BACK ARRANGEMENT:-

24 (a) At any time after the Company goes in for commercial production, the Corporation may with the consent of the Collabora