Civil courts lack jurisdiction over matters under the SEBI Act; disputes must be resolved in the Securities Appellate Tribunal.

ORDER

Dated this the 1^st day of November, 2024

This Civil Revision Petition has been filed under Section 115 of the Code of Civil Procedure and the order passed by the Additional Munsiff, Ernakulam in O.S.No.1095/2015 regarding issue of jurisdiction is under challenge in this revision petition. The revision petitioner herein is the sole defendant and the respondent is the sole plaintiff in the above suit.

2. Heard the learned Senior counsel for the revision petitioner and the learned counsel for the respondent in detail.

3. On reading the averments in the plaint, with reference to the claims raised, the learned senior counsel appearing for the revision petitioner/defendant argued that civil court has no jurisdiction to entertain the matter, mainly on asserting that as per Annexure.A2 Exit order, passed by the Securities and Exchange Board of India (hereinafter referred to as 'SEBI' for short), it was decided to valuate the liabilities and as per Annexure.A3, in column No.230, the amount due to the respondent has been determined as Rs.2,60,422.00, which is covered by the first part of the claim raised in paragraph No.2 of the plaint. It is argued that as regards the 2^nd part, claiming amount towards Building Fund and Settlement Stabilization Fund to the tune of Rs.2,02,660.00 as per Annexures.A2 and A3, the same was deemed to be rejected and therefore, the remedy of the respondent is to approach the Securities Appellate Tribunal and it has been provided under Section 15 T(1)(a) of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’ for short), that by an order of the Board made, on and after the commencement of the Securities Laws (Second Amendment) Act, 1999, under this Act, or the rules or regulations made thereunder is appealable before the Securities Appellate Tribunal having jurisdiction in the matter. It is also pointed out that under Section 15Y of the SEBI Act, civil courts have no jurisdiction in respect of the matters dealt under the Section. It has been provided that no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which an adjudicating ofÏcer appointed under the SEBI Act or a Securities Appellate Tribunal constituted under the Act is empowered by or under the Act to determine and 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 power conferred by or under the Act. Thus, the learned senior counsel would submit that the remedy of the respondent/plaintiff is to approach before the appellate tribunal and the civil court lacks jurisdiction to entertain the suit.

4. In response to this contention, the learned counsel appearing for the respondent/plaintiff submitted that this contention is no more available because in a similar suit, viz. O.S.No.654/2006 filed before the Sub Court, Ernakulam earlier, this contention was raised by the revision petitioner herein, who got arrayed as the defendant therein. In O.S.No.654/2006, the court raised issue No.(1) to address the question of jurisdiction and negatived the same. It is also submitted that when the said verdict was appealed before this Court, as per judgment in R.F.A 499/2009 dated 12.04.2019, this Court also upheld the finding of the trial court and therefore, the present suit, seeking similar relief, is perfectly maintainable before the civil court and no bar would apply in so far as the reliefs sought for are concerned.

5. At this juncture, the learned senior counsel appearing for the revision petitioner argued that the court cannot confer jurisdiction to a forum/court which actually lacks jurisdiction by a judicial order. He also would submit that, if the court entertains a matter which has no jurisdiction, the same is not a precedent to hold that in similar matters also, without jurisdiction, the civil court can entertain the dispute.

6. In this matter, the dispute has to be addressed with reference to va