The Petitioner has no vested right to insist on the acceptance of its settlement proposal, and SEBI's decision-making process was fair and justified.

JUDGMENT :

M.S. SONAK, J.

1. Heard learned counsel for the parties.

2. The Petitioner challenges the communication dated 30 October 2024 by which the Petitioner’s Settlement Applications were rejected by the Securities and Exchange Board of India (“SEBI”).

3. Mr. Shah, learned counsel for the Petitioner, submits that the rejection is based on the alleged ground that the documents submitted by the Petitioner were deficient and that the Petitioner did not maintain its worth for the Financial years ended March 31, 2019, March 31, 2020, and March 31, 2021.

4. Mr. Shah submitted that the documents sought were provided time and again. At no stage was the precise nature of deficiency informed to the Petitioner. He submitted that the Chartered Accountant’s certificate regarding networth was also provided. Accordingly, he submitted that there was no valid reason to reject the Petitioner’s Settlement Applications. Mr. Shah submitted that the whole object of the settlement proceedings is to allow the allegedly defaulting parties to make good the defaults and settle the proceedings. He submitted that there had been no fair consideration of the Petitioner’s settlement proposals and that the decision-making process leading to the rejection of the Petitioner’s Settlement Applications was grossly deficient.

5. Mr. Shah, without prejudice, submitted that even if the Respondent now informed the Petitioner of the precise deficiencies in the documents submitted by the Petitioner or the precise documents to establish the Petitioner’s net worth for the relevant years, the Petitioner, within a schedule that could be indicated, will provide for the same.

6. Based on the above submissions, Mr. Shah submitted that the impugned communication dated 30 October 2024 be interfered with and directions be issued to the SEBI to reconsider the Petitioner’s Settlement Applications.

7. Mr. Doctor learned Senior Advocate for the SEBI submitted that even earlier, the Petitioner had defaulted in adhering to the timelines for submitting documents. However, by order dated 19 March 2024 in Writ Petition (L) No. 393 of 2024, this Court indulged the Petitioner by granting additional time. Despite repeated opportunities, he submitted that the Petitioner has been providing deficient documents from April to October. He submitted that even the net worth requirement is not complied with.

8. Mr. Doctor submitted that the documents supplied and the net worth requirements have been examined by the Internal Committee and, finally, the Whole Time Members of SEBI. Several opportunities were granted to the Petitioner, but still, the Petitioner has failed to avail of the same. Therefore, Mr. Doctor submitted that there was no unfairness, and the action of the SEBI called for no interference.

9. Mr. Doctor pointed out that two show-cause notices have been issued to the Petitioner. Therefore, it is in the petitioner's interest to keep the Settlement Applications pending. He submitted that final orders cannot be made in the show-cause notices until the settlement applications are decided. He pointed out that no malafides are alleged, and in such matters, the commercial decisions of the SEBI should be deferred to.

10. Mr. Doctor submitted that the Petitioner has no right to insist on the settlement. Since the Petitioner’s Applications have been fairly considered, the scope of judicial review ought to be minimal. Mr. Doctor relied on the decisions in Abans Enterprises Ltd. and another vs. Securities and Exchange Board of India, Writ Petition No. 4457 of 2024 decided on 11 November 2024 and Shilpa Stock Broker Pvt. Ltd. and another vs. Securities and Exchange Board of India, 2012 SCC Online Bom 58 to support his contentions.

11. The rival contentions now fall for our determination.

12. At the outset, it is necessary to clarify that the Petitioner has no right, much less a vested right, that the SEBI accept its settlement proposal. However, this does mean that the Petitioner’s settlement proposal should