A civil court lacks jurisdiction to entertain a suit challenging orders passed by the Securities and Exchange Board of India (SEBI) under Section 20A of the Securities and Exchange Board of India Act, 1992.

Sanjib Banerjee, J.

1. Even as civil Courts should be alive to the fact that Section 9 of the Code embraces the world of civil matters except those expressly prohibited by law or excluded by necessary implication, a pedantic approach to assess a suit or the substance thereof cannot be permitted to make a mockery of the provision. Every civil Court should be aware of the judgment reported at AIR 1977 SC 2421 (T. Arivandandam v. T.V. Satyapal) that instructs that a Court should assess a plaint on a meaningful -- not a formal -- reading thereof to ascertain the true substance of the claim. The trial judge in this case has fallen woefully short of the duty that was cast on him by law.

2. Two of the defendants in the fanciful suit complain of the mechanical application of Order VII Rule 11 by the trial Court and the rejection of the petitioners' application under that provision. The petitioners refer to Section 20A of the Securities and Exchange Board of India Act, 1992 to say that the jurisdiction of a civil Court to receive a matter covered by such provision has been expressly excluded. Section 20A of the said Act of 1992 provides that no civil Court shall have jurisdiction in respect of any matter over which the Securities and Exchange Board of India (SEBI) is empowered by, or under, such Act to pass any order. It also mandates that no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any order passed by the SEBI under the said Act of 1992, but the second limb of the provision is irrelevant in the present context since the order of injunction subsisting in the suit is an Appealable order and, as such, not revisable. Section 20A of the 1992 Act in so far as it operates as a bar on the civil Court's jurisdiction to receive a suit has to be seen in the context of the wide authority of SEBI under Section 11(2)(c) of the 1992 Act, inter alia, to regulate the working of collective investment schemes.

3. The plaintiff, an employee of the first defendant, carried the suit before the City Civil Court complaining primarily of the orders dated May 11, 2012 and May 15, 2012 passed by the SEBI. Those orders were not passed against the plaintiff but were directed against the first defendant in the suit. The plaint is a model of deceit.

4. The plaintiff has spun a yarn in the self-adulatory opening paragraphs of the plaint to highlight his industry in motivating tribunal folk and like people to invest in a lucrative savings scheme for their ultimate good. The plaint avers that the plaintiff would dutifully deposit the money collected from less privileged depositors into a collective investment scheme operated by the first defendant. The first defendant employer, the plaint says, is authorised by its memorandum of association to invest in teak bonds, agro bonds and like investments. The first defendant apparently sought permission from the SEBI to continue the collective investment scheme and was granted a conditional licence. Several paragraphs of the plaint speak of all the requirements having been met by the first defendant save the key condition. The plaintiff makes out a case that his life and livelihood are at stake and if the business of the first defendant is affected by any order passed by SEBI, he would be prejudiced. It is on such reasoning that the plaintiff has assailed the orders passed by SEBI, not against the plaintiff but against the plaintiffs employer, the first defendant in the suit. The substance of the plaint, the ulterior and sinister motive thereof and the mockery that it makes of the judicial system are all there to see upon a casual reading thereof. Yet the trial Court referred to some judicial precedents of convenience and adopted an obtuse and clerical approach in holding that if some of the reliefs appeared to be barred by law and the other reliefs did not, the plaint could not be dissected for a part of it to be rejected and the other retai