Shaffique, J.

1. This appeal is filed by the Security Exchange Board of India (SEBI), the first respondent in the writ petition challenging the judgment of the learned Single Judge quashing Ext.P8 order passed by SEBI.

2. SEBI initiated proceedings against the petitioners when the 1st petitioner company made allotment of 173995 equity shares of Rs.10/-each to 163 persons on 28.3.2001 which included members who were not the existing share holders. It is alleged that the Company has violated Ss.56, 60, 69, 72 and 73 read with the first proviso to S.67(3) of the Companies Act and the provisions of SEBI (Disclosure and Investor Protection) Guidelines, 2000 (hereinafter referred as 'SEBI Guidelines').

3. According to the petitioners, there is no power vested in SEBI either under the Companies Act, 1956 or the SEBI Guidelines to pass Ext.P8 order as the company is not a listed company and it had only offered rights issue.

4. Initially when Ext.P3, show cause notice dated 29.6.2001 was issued by SEBI, the petitioners objected to the same by filing an application before the Company Law Board but the same happened to be dismissed. Subsequently objection was filed and after consider