This writ petition is filed for a writ of mandamus questioning/challenging the proceedings in MRD/DSN1 01507/2007, dated 16.8.2007 issued by the Securities and Exchange Board of India (SEBI) i.e., the 2nd and 3rd respondents, as arbitrary, illegal and violative of Articles 14,19(1)(g) and 21 of the Constitution of India, apart from contrary to the provisions of the Securities Contracts (Regulation) Act 1956 and the Hyderabad Stock Exchange Limited (Corporatisation and Demutualisation) Scheme, 2005 and Securities and Contracts (Regulation) (Manner of increasing and maintaining public share holding in recognized stock exchange).

2. 4th respondent-Hyderabad Stock Exchange Limited was impleaded as per order dated 7.9.2007 made in W.P.M.P.No.23994 of 2007.

3. Counter-affidavit had been filed by respondents 2 and 3 and reply affidavh also had been filed by the writ petitioners. This Court issued notice before admission on 29.8.2007 and further issued Rule nisi on 11.10.2007. '

4. Contentions of Sri P. Kesava Rao:

Sri Kesava Rao, learned Counsel representing the writ petitioners had taken this Court through the affidavit filed in support of the writ petition and the counter-affidavit and also pointed out to the relevant portions of the regulations governing the field and the material papers, which had been placed before this Court. The learned Counsel also had taken this Court through Section 4(B) of the Securities Contracts (Regulation) Act, 1956 (hereinafter in short referred to as 'the Act' for the sake of convenience) and in particular, would point out to Section 4B (8) of the Act.

The learned Counsel also pointed out to the relevant dates and would maintain that if sub-sections (8) and (7) of Section 4 (B) of the Act are read carefully along with the regulations governing the fields, without permitting the time specified by the Act, with effect from the date of regulations being notified, any action taken cannot be sustained. The learned Counsel in elaboration had taken this Court through the Security and Contracts (Regulation) (Manner of increasing and maintaining public share holding in recognized stock exchange) regulations 2006 in general and regulation 4 in particular and would maintain that these regulations have statutory force since these regulations were made by virtue of Section 31 of the Act read with subsection (8) of Section 4B of the Act referred to supra. The learned Counsel would also explain how serious prejudice would be caused to the writ petitioners and how the writ petitioners are having locus standi to question the same. The learned Counsel also demonstrated how the period of 12 months and subsequent grace period of 12 months to be calculated or to be reckoned with and explained the relevant expressions employed in the Act and also the regulations as well. The learned Counsel also placed reliance on SEBI (DISCLOSURE & INVESTOR PROTECTION) GUIDELINES, 2000 (hereinafter referred to as guidelines for the purpose of convenience). The learned Counsel also had drawn the attention of this Court to a decision of the Madras High Court dated 25.8.2006 made in Coimbatore Stock Exchange Limited rep., by its Director v. Securities & Exchange Board of India. The learned Counsel also while elaborating several facts had also drawn the attention of this Court to the contents of the reply-affidavit.

5. Contentions of the Learned Advocate General:

On the contrary, the learned Advocate General had explained the facts and circumstances and had drawn the attention of this Court to Section 2 (ab) of the Act and further pointed out to Section 4A and 48 of the Act as well. The learned Advocate General had drawn the attention of this Court to subsections (6), (7) of Section 48 and also subsection (8) as well. Further, the learned Advocate General would maintain that publication of the regulations may not have any serious consequence for the reason that section 5(2) of the Act being mandatory, the same to be operative by operation of