- (1.) THE present appeal is directed against the order dated 16-7-2001 made by the Chairman, Securities and Exchange Board of India, the Respondent No. 1 (SEBI). In the said order, the SEBI had held that the Appellant and Modipon Ltd., apart from being promoters of the Respondent No. 2 (MRL) were also acting in concert with the acquirers and directed that the Appellant and the said Modipon Ltd. shall not be eligible to participate in the public offer to the shareholders of MRL by the acquirers, vide letter of offer dated 30-5-2001. Modipon filed a Writ Petition No. 1536 of 2001 in the Hon'ble Bombay High Court challenging the legality and validity of the said order. THE Hon'ble High Court disposed of the said Writ Petition vide its order dated 23-7-2001 inter alia observing that the proper course for the petitioners would be to exhaust the remedy of statutory appeal provided in the Securities and Exchange Board of India, Act 1992 ('the Act'). THE said company filed an appeal No. 34 of 2001 on 24-7-2001, which was allowed by the Tribunal vide order dated 31-7-2001.
(2.) However, the Appellant, instead of availing the appellate remedy provided under the Act, resorted to invoking High Court's jurisdiction under article 226 and filed a Writ Petition 4374 No. 2001 in the Hon'ble Delhi High Court. Though, in appeal No. 34 of 2001 filed by Modipon Ltd., the Appellant was also arrayed as a Respondent and notice was served, it preferred to remain out of the proceedings on the ground that it has preferred a civil writ petition before the Hon'ble Delhi Court and that the matter was pending and subjudice. Shri Arif Bookwala, the learned counsel appearing for the Appellant, stated that the Appellant has decided to withdraw the said Writ Petition and steps have already been taken for the purpose. In support of the same he filed a copy of the letter dated 14-9-2001 from the Appellant's Counsel in the said writ petition, and also a copy of the resolution passed by the Board of Directors of the Appellant in their meeting held on 15-9-2001. Shri Bookwala submitted that in any case since the Appellant has decided to avail of the alternate remedy of appeal, the writ petition seeking relief on the same cause of action will not survive. Shri Bookwala submitted that pending final decision of the Appeal, interim order as prayed for in para VII of the appeal may be issued, lest the appellant would suffer irreparable injury. Para VII of the appeal seeks issue of following interim order: (a) stay the impugned order dated 16-7-2001; (b) direction to the Respondent that they should not reject the shares lodged by the Appellant; (c) the Respondent Nos. 3 to 7 be restrained by an order and injunction of this Hon'ble Tribunal from finalise the public offer without taking into account the shares lodged by the Appellant; (d) pass such other or further orders as this Hon'ble Tribunal may deem just and proper in the facts and circumstances of the case.
(3.) THE present management of MRL decided to consolidate their holding in the company by acquiring about 35 per cent capital, through a public offer. On 31-3-2001, the Respondent No. 7 issued a public announcement for the purpose, as per the requirements of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 on behalf of Dr. B.K. Modi, Shri V.K. Modi, Mod Fashions & Securities (P.) Ltd. and Modikem Ltd. (Respondents 3, 4, 5 & 6 respectively) for acquisition on 8764186 shares at the rate of Rs. 80 per share from the shareholders of MRL. THE acquirers thereafter submitted draft letter of offer to SEBI, therein inter alia stating that the offer to the shareholders of MRL is made in accordance with regulation 11(1) - i.e., to consolidate the holdings of present management of MRL, that certain companies specifically stated, including the Appellant, are persons deemed to be acting in concert with the acquirers/promoters and the response is expected in the open offer from the total shares holding of 76 per cent held by financial institutions/mutual funds/public etc. As a result of holding the Appellant as a person deemed to be acting in concert with the acquirer, the Appellant was disqualified from participating in the public offer. THE Appellant represented to the SEBI in this regard. However, the SEBI viewed that as per the 1997 Regulations, the Appellant being part of the promoter group of MRL and a person deemed to be acting in concert with the acquirers is not eligible to participate in the open offer made by the acquirers. THE Appellant is aggrieved by the said view point of the SEBI.;