2005 Supreme(Bom) 1635

IN THE HIGH COURT OF BOMBAY
Kesha Appliances Pvt. Ltd.
VERSUS
Royal Holdings Services Ltd.
Decided no: November 30, 2005

Headnote:Civil Procedure Code, 1908 - Section 9-A Security and Exchange Board of India Act, 1992, Sections 15-Y and 20-A Jurisdiction of Civil Court Suit arising out of breach and take over regulation Allotment/Transfer of shares Illegal and unlawful Within exclusive domain of SEBI Cannot be complained in Court of law High Court has no jurisdiction by virtue of express bar contained under Sections 15-Y and 20-A of SEBI Act Common law right of rectification sought to be enforced arises out of Take Over Regulations Falls within exclusive jurisdiction of SEBI Board empowered to give effective relief of rectification of share. Court is of the opinion that on plain and simple reading of Section 15-Y read with Section 20-A of the Act, all the cases arising out of the breach and Take Over Regulation must fall within the exclusive domain of SEBI and cannot be complained in the Court of Law by virtue of express bar contained under Sections 15-Y and 20-A of the SEBI Act.

       Court is also of the further opinion that there is no doubt that there is a common law right in a share holder to apply for rectification of the share register even though it is not his own share in respect of which he is seeking rectification but still the said right if it flows from the provisions of Take Over Regulations then undoubtedly it would fall within the exclusive jurisdiction of SEBI and not within the jurisdiction of this Court in view of the express bar contained under the aforesaid statute. Court is of the further opinion that the enactment of the amendment of Take Over Regulations of Amending provisions of SEBI (Substantial Acquisition of Shares and Take Over) and Second Amendment Regulation, 2002 w.e.f. 9.9.2002 by providing for the remedy under sub-clauses (c) and (d) of the Regulation 44, the Board has been empowered to give effective relief of Rectification of S hare Register by declaring cancellation of the Allotment and/or by directing the company not to give an effect to the transfer if they are found to be contrary to the Take Over Regulation.

       Civil Procedure Code, 1908 - Section 9-A Jurisdiction of Civil Court Exclusion of Barred Act provides right as well as remedy or Scheme of Act Complete CPC not vary determinative factor Though may be relevant. Keeping in mind the aforesaid principles of Section 9 of the CPC as has been held by the Apex Court in the 7 Judges Bench and consistently followed thereafter it is for me to determine whether the provisions of Sections 15-Y and 20-A expressly bars the jurisdiction of this Court. It has been already held in each of the aforesaid judgments that where there is an express bar the question whether the Act also provides the right as well as remedy and/or the scheme of the Act is a complete code by itself is not very determinative factor though may be relevant. Learned counsel for the plaintiff has contended that the provisions of Sections 15-Y and 20-A of the SEBI Act cannot bar the jurisdiction of this Court for a share holder to apply for rectification of the shares. He has contended that the right of the share holder to maintain purity of the register is a common law right and thus he was also common law right of rectification of the shares register if the same is illegal and lawfully altered. It has been his contention that such a kind of a suit is not barred by the provisions of Sections 15-Y and 20-A. It is his contention that the provisions of Sections 15-Y and 20-A only bars those kind of suits which are covered by the adjudication proceedings and where the jurisdiction is conferred on the adjudicating officer for the purpose of levying penalty and imposing fine. It has been contended that the Legislature never intended to bar the suit of a share holder for rectification of the shares under Sections 15Y and 20-A. It has been contended that it is a settled law that once there was a common law right available as in the present case under the SEBI Act, 1992 then in that event unless the subsequent statute expressly takes away the common law right which was pre-existing it cannot be treated that, that rights has been taken away by implication by providing the provisions of Sections 15-Y and 20-A. It has been further contended that while interpreting Sections 15-Y and 20-A, this Court also must take into consideration the provisions of Sections 21 and 32 of the SEBI Act. It was contended that by virtue of Section 21, it is expressly provided that in fact the suit or other proceedings which can be brought against any person that would not be meant to have taken away by virtue of the provisions of this Act. By lying upon Section 32, it has been contended that the provisions of SEBI Act is in addition to and not in derogation of the provisions of any other law and therefore the common law right of rectification is not taken away and the remedy under the provisions of the SEBI Act particularly under Section 44 of the Take Over Regulations is in addition to the pre-existing common law right and not in derogation thereof.