The SEBI circular allowing buyback of shares is valid and does not compel shareholders to sell their shares. Minority shareholders cannot interdict the buyback process.

JUDGMENT :

1. The present petition has been filed by the petitioners with the following prayers:

“In view of the facts and circumstances stated hereinabove, it is therefore prayed this Hon’ble Court may graciously be pleased to:

1. issue Writ of Mandamus and / or Certiorari or any other appropriate Writ for quashing and / or setting aside the Impugned SEBI Clarification issued by the Respondent No.1;

2. Pass order declaring the Postal ballot Notice and PA of the respondent NO.2 as illegal and void;

3. Pass an order directing the respondent No.1 to initiate investigation into the breach of the MPS Norms by the respondent No.2 before any action may be taken by the respondent No.2 under the Exit Circular;

4. to direct the respondent No.1 to follow the mandate of the Section 11 of the Section 11 of the Securities and Exchange Board of India Act, 1992 and the circulars issued by respondent No.1 itself, and take appropriate actions accordingly;

5. pass any such other order or orders as this Hon’ble Court may deem and appropriate, in the interest of justice, in favour of the petitioners.”

2. In substance the grievance of the petitioners is that the respondent No.2 Bharat Nidhi Limited (‘BNL’ in short) is proceeding to undertake buyback of shares at a grossly understated valuation in breach of the minimum public share holding requirement as specified in Rule 19(2) and Rule 19 (A) of the Securities Contracts (Regulations) Rule 1957 as well as various circulars issued by SEBI in respect of listed companies to be in compliance with the MPS norms and have reflected promoters and promoter group as part of the public shareholding to deny all the public shareholders a true and fair value of their rights. It is also the grievance of the petitioners that the process of buyback is being undertaken when investigation in respect of the promoters of respondent No.2 is pending. The challenge is also to the circular dated July 25, 2017 issuance of which resulted in amending and diluting laws, which is against the interest of investors in securities and development of securities market.

3. Some of the facts necessary for a decision in the writ petition are, the petitioner No.1 is a citizen of India, holding 1170 shares of respondent No.2 in dematerialized account with Stock Holding Corporation of India (‘SHCIL’ in short). The petitioner No.2 is a HUF holding 900 shares of the respondent No.2. The BNL has its registered office in Delhi and was public company listed on the Delhi Stock Exchange (DSE) and holds 24.40% shares of Bennett Coleman and Company Ltd. (BCCL) with other group companies of BNL which makes it the largest shareholder of the leading media house of the nation, the Times Group. BCCL in turn owns brand capital which own shares of 500 plus companies via barter of advertising eg. Times Internet Ltd, 74% of Radio Mirchi and private and quoted portfolio exceeding Rs.15,000/- crores at cost and far higher at market value. It is the case of the petitioners that the core media decision of BCCL is highly profitable. BNL also hold 24.40% shareholding of Bennett Property Holdings Company Ltd. (BPHCL) and through BPHCL it owns several land parcel, buildings and flats and properties in prime location in most key cities and states in India acquired at very low cost whose market value would be in excess of thousands of crores. It is stated that BNL hold 12.41 lakh shares of Times Internet Ltd.

4. Further to the de-recognition of the DSE even though the BNL being as Exclusively Listed Company (ELC) on DSE, was moved to the dissemination board (DB) of the BSE Ltd. as per the then existing SEBI circular. However, BNL got itself listed on the Calcutta Stock Exchange (CSE). It is the case of the petitioners that BNL did this under the garb of the circulars and clarification issued by the respondent No.1, SEBI. In any case further to special purpose inspection conducted by SEBI in October 2017, the BNL is currently placed on the DB of the National Stock Exchange of