- (1.) M/s. Eider-e-Commerce Limited, the Appellant herein, is a public limited company incorporated under the Companies Act, 1956. It was registered on 13.7.1992 with its registered office at Eider House, S.C.O. 147-148,Sector 8C, Chandigarh. Though the Appellant company was originally registered under the name "Citywide Communications and Computers (India) Ltd", its name was changed to Eider-e-Commerce Ltd, on 10th February 2000. The main objects of the Appellant company, as per its Memorandum of Association include manufacturing and dealing in communication electronics, digital electronics etc.. According to the Appellant its business activities are proposed to be expanded and for that purpose part of the fund requirement is expected to be met by raising fresh capital from the public by issuing 96 lakhs equity share of Rs.10/- each for cash at a premium of Rs.160/- per share. The aggregate amount proposed to be mobilised from the public issue is to the tune of Rs.163.20 crores. For the purpose of public issue by issuing prospectus, the Appellant had appointed M/s.Aryaman Financial Services Ltd., a category I Merchant Banker registered with Securities and Exchange Board of India as the lead manager to the issue. The said lead manager filed with the Respondent a draft prospectus (offer document) along with due diligence certificate as required under the governing regulations. The Respondent, on examination of the said draft offer document found the same deficient on several counts. The Respondent's findings thereon were communicated to the said lead manager vide letter dated 24.5.2000 and were asked to show cause as to why penal action should not be taken against them for their failure to exercise due diligence. By the said letter the lead manager was also asked not to proceed with the public issue or take any steps in connection with the said offer document. The lead manager vide letter dated 14.6.2000 submitted their explanation. The Respondent considered the explanation and found the same not satisfactory and informed the lead manager accordingly and also conveyed its decision to close the file in the circumstances. This was communicated on 1.8.2000. By the said communication the lead manager was again advised not to proceed with the issue. The Appellant feels aggrieved by the said decision of the Respondent as in effect the said decision affects its plan to raise funds from the public. The present appeal is an off shoot of the said decision.
(2.) Since the Respondent has raised preliminary objection as to the maintainability of the appeal, it is felt that the same should be considered and decided first before proceeding further in the matter. According to the Respondent there is no order to be appealed against, as it has not passed any appealable order against the Appellant. The impugned communication is addressed to the lead manager asking them not to proceed with the Appellant's public issue based on the defective draft offer document. Further, what is to be appealed against under section 15T of the Securities and Exchange Board of India Act is an order by the SEBI Board or its Chairman and that under challenge in the present appeal is only a letter issued by a functionary of SEBI advising the lead manager, in a routine manner.
(3.) THE Appellant has refuted the Respondent's contention stating that the letter dated 1.8.2000 was an order directing the lead manager not to proceed with the proposed public issue directly affecting the interests of the Appellant in as much as the Appellant is in need of funds for expanding the business and it had already done elaborate spade work incurring heavy expenditure to issue the prospectus. Stalling the public issue at this stage is of considerable consequence to the Appellant than to anybody else. THE lead manager is only a conduit with little stake in the matter.;