$~66 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Delivered on: 09.06.2025 + W.P.(C) 4633/2025 & CM APPL. 21406/2025 KAIROSOFT AI SOLUTIONS LIMITED & ANR......Petitioners Through: Mr. Kapil Sibal, Sr. Adv. with Mr.

Karan Luthra, Mr. Rishi Agrawala, Ms. Aarushi Tiku, Mr. Rishabh Parekh, Mr. Daksh Arora and Mr.

Rohan Dua, Advs.

versus SECURITIES AND EXCHANGE BOARD OF INDIA & ORS. .....Respondents Through: Mr. Neeraj Malhotra, Sr. Adv. along with Mr. O.P. Faizi, Mr. Nimish Kumar, Mr. Rahul Malik, Ms. Shivangi Shokeen, Mr. Ashish Aggarwal, Mr. Himanshu Singh and Ms. Smriti Ahluwalia, Advs. for SEBI.

Mr. Pratap Venugopal, Sr. Advocate with Ms. Surekha Raman and Mr.

Sidharth Nair, Advs. for R-2.

Mr. Ripudaman Bhardwaj, CGSC with Mr. Amit Kumar Rana, Adv for R/UOI.

CORAM:

HON'BLE MR. JUSTICE VIKAS MAHAJAN

JUDGMENT

VIKAS MAHAJAN, J

1. The present petition has been filed by the petitioners feeling aggrieved by the impugned notices dated 03.04.2025 and 04.04.2025 published by the Signature Not Verified W.P.(C)No.4633/2025 Page 1 of 29 Digitally Signed respondent no.2/BSE on its website whereby surveillance actions have been taken against shares of the petitioner no.1 company (hereinafter, the „Company‟). The challenge is also laid to the „General Administrative Circular‟ dated 24.02.2023 issued by respondent no.2/BSE.

2. The case set out in the petition is that on 23.02.2017 respondent no.2/BSE introduced the „Graded Surveillance Measure‟ (for short, „GSM‟) Framework in consultation with respondent no.1/SEBI, whereby it was provided that if it is noticed that any securities witness abnormal price rise not commensurate with financial health of the company & fundamentals like Earnings, Book Value, Net worth etc., the securities will be made subject to the GSM Framework.

3. On 24.02.2023, impugned General Administrative Circular was issued by respondent no.2/BSE providing that messages/videos are being circulated with recommendations to deal in certain share scrips and such share scrips based on any unusual price/volume variation/trading concentration and other factors, may be shortlisted for surveillance action to GSM Stage-IV.

4. On 14.02.2025 and 18.02.2025, Company announced „Rights to Issue‟ of its 8,00,000 equity shares available for subscription from

20.02.2025 at a fixed price of Rs. 250/- per share.

5. The „Rights to Issue‟ was closed on 05.03.2025 and 7,82,956 equity shares were subscribed at Rs. 250/- per share. On 17.03.2025, respondent no.2/BSE granted listing approval to Company for the listing of 7,82,956 equity shares.

6. Thereafter, on 19.03.2025 respondent no.2/BSE granted traded approval for trading of aforementioned equity shares on the BSE w.e.f.

20.03.2025.

Signature Not Verified W.P.(C)No.4633/2025 Page 2 of 29 Digitally Signed

7. From 20.03.2025 to 28.03.2025, upward price trend of the Company‟s share scrip begun. The closing price of the share on the Stock Exchange ranged between Rs. 232.55 per share to Rs. 271.04 per share. On

25.03.2025, the shares also hit the upper circuit for some time.

8. It is the case of the petitioners that on 29.03.2025, after the upper trend became a public news, a rank stranger made a YouTube video recommending the shares of the Company‟s shares.

9. Between 30.03.2025 and 31.03.2025, two research analysts viz. Ms. Brahmi Kapasi, having 2,86,000 Instagram followers and Mr. Deepak Wadhwa having 7,00,000 YouTube subscribers, registered with respondent no.1/SEBI also made „Buy‟ recommendations as regards Company‟s shares. It further appears that on 01.04.2025 and 02.04.2025 two more videos from rank strangers emerged on YouTube.

10. After circulation of the aforesaid videos on YouTube, on 02.04.2025 at 11.08 a.m. respondent no.2/BSE wrote to Company with reference to said videos and sought comments of Company.

11. The petitioners responded to BSE by stating that the information circulated in the videos is inaccurate and has not been authorized by the Company. It was also stated that the Company was not awar