IMPORTANT POINTS
(1) Rectificatory jurisdiction under Section 59 of Companies Act, 2013 is summary in nature and not intended to be exercised where there are contested facts and disputed questions.
(2) Public administration is dynamic and ever-evolving. Governance of certain sectors through independent regulatory bodies will be far more effective than being under direct control and supervision of Ministries or Departments of Government.

JUDGMENT :

PAMIDIGHANTAM SRI NARASIMHA, J.

1. The short question for our consideration in this appeal relates to the scope of the rectificatory jurisdiction of the National Company Law Tribunal under Section 59 of the Companies Act, 2013¹ [hereinafter referred to as the ‘2013 Act’]. In this context, we are called upon to determine the appropriate forum for adjudication and determination of violations of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997² [hereinafter referred to as the ‘SEBI (SAST) Regulations’] and Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992³ [hereinafter referred to as the ‘SEBI (PIT) Regulations’] framed under the Securities and Exchange Board of India Act, 1992⁴ [hereinafter referred to as ‘the SEBI Act’]. We have answered both the questions. On the first issue, following the decision of this Court in Ammonia Supplies Corporation (P) Ltd. vs. Modern Plastic Containers Pvt. Ltd. and Others, (1998) 7 SCC 105, we have held that the rectificatory jurisdiction under Section 59 of the 2013 Act is summary in nature and not intended to be exercised where there are contested facts and disputed questions. On the second issue, we have held that transactions falling within the jurisdiction of Regulatory bodies created under a statute must necessarily be subjected to their ex-ante scrutiny, enquiry and adjudication. We have, therefore, rejected the contention that the National Company Law Tribunal under Section 59 exercises a parallel jurisdiction with Securities and Exchange Board of India⁵ [hereinafter referred to as ‘the SEBI’ or ‘the Board’] for addressing violations of the Regulations framed under the SEBI Act.

2. This is an appeal against the judgment of the National Company Law Appellate Tribunal⁶ [Companies Appeal (AT) 240 of 2017 of the National Company Law Appellate Tribunal dated 06.12.2018] (hereinafter referred to as ‘Appellate Tribunal’) whereby the Appellate Tribunal set aside the judgment of the National Company Law Tribunal (hereinafter referred to as the ‘Tribunal’), allowing the company petition filed by the Appellant under Section 111A of the Companies Act, 1956⁷ [hereinafter referred to as the ‘1956 Act’] (which is Section 59 of the 2013 Act), for rectification of Members Register. The Tribunal while allowing the petition, directed the Appellant to buy-back its shares which were held by the Respondents. In appeal, the Appellate Tribunal set aside this direction on the ground that the Tribunal exceeded its jurisdiction. It is this order of the Appellate Tribunal which is impugned before us.

Relevant Facts:

3. The Appellant herein is a listed company engaged in the manufacture and sale of rectified spirit, country liquor, marine products, carbon dioxide gas etc. Respondent No. 1 is also a listed company which is engaged in the business of producing carbon dioxide gas and dry ice. Respondent No. 2 is the managing director of Respondent No. 1, Respondent No. 3 is the wife of Respondent No. 2, and Respondent Nos. 4-6 are close relatives of Respondent Nos. 2-3.

4. It is the contention of the Appellant that sometime in August 2003, Respondent No. 2 came up with a proposal for a business tie-up between the Appellant and Respondent No. 1. The Appellant is said to have rejected the proposal. It is alleged by the Appellant that after this rejection, the Respondents started acquiring shares of the Appellant from the open market with a view to eliminate competition and strengthen its own dominant position in the relevant market. As of 18.01.2004, the Respondents collectively held just under 5% of the Appellant’s total paid-up share capital.

5. On 19.01.2004, Respondent No.