PRAKASH TATIA,J. - (1.) HEARD learned Counsel for the parties.
(2.) THE petitioners are aggrieved against the order dated 12.1.2007 by which the trial court decided the issue No. 7 about the civil court's jurisdiction against the petitioner -defendants and held that the civil court has jurisdiction to try the suit filed by the respondent -plaintiff No. 1. Brief facts of the case are that respondent No. 1 -plaintiff submitted an application before petitioner No. 1 -Bombay Stock Exchange Limited (for short 'BSE') for listing its equity shares. In consequence thereof, ultimately an agreement was executed between plaintiff respondent No. 1 and the BSE on 18.2.1994. It is alleged that the plaintiff - respondent No. l did not comply with the certain clauses of the listing agreement, therefore, the BSE issued show cause notice to respondent No. l on 21.8.2001 and sought explanation as to why trading in the securities of the plaintiff company may not be suspended by BSE. It is alleged that even after exchange of correspondence between the defendant -the BSE and the plaintiff, the plaintiff failed to comply with the requirements and fulfill the conditions of listing agreement. Again notice was issued to the plaintiff by the BSE on 18.9.2001. Ultimately, the trading in the plaintiff's securities were suspended by the BSE w.e.f. 1.10.2001. It appears that the plaintiff -respondent No. l Company submitted representation for revocation of the suspension order before the BSE. It appears from the facts mentioned in the plaint that there were several disputes cropped up with the government authorities and also among the promoters of the Company. It is submitted by the plaintiff that in some matters, the plaintiff -Company was. exonerated and because of those proceedings, the plaintiff did not suffer any disqualification for trading in its securities through BSE. However, because of dispute among the Directors of the Company who were brothers in relation, Union of India approached the Company Law Board at New Delhi by filing petition Nos. 51/2000 and 50/2003. The Company Law Board, New Delhi, disposed of the C.P. No. 50/2003 and passed specific order in C.P. No. 51/2000 on 2.4.2004. By this order dated 2.4.2004, the Company Law Board directed the Central Government to appoint three Directors on the Board of Directors of the respondent Company for maximum period of three years from the date they assume office. The said order was challenged by the plaintiff -respondent No. l - Company by filing appeal before the Punjab and Haryana High Court. This fact is relevant because of the reason that there is allegation that a forged order of the Punjab and Haryana High Court was submitted by the plaintiff -respondent No. l - Company before the BSE. However, subsequently, the plaintiff submitted a letter before the BSE stating therein that the said order was forged one and communicated to the plaintiff -Company by one advocate for which he has already lodged criminal case. So far as order to appoint three Directors by the Central Government that was in fact stayed by the Punjab and Haryana High Court. The plaintiff submitted representation to the BSE that no matter against the plaintiff -Company is pending in any government department and that has been made clear by the plaintiff by its earlier letter dated 7.4.2005 also. Ultimately, on 17.8.2005, in the meeting of the Listing Committee of the BSE, the plaintiff's representative was also invited to put his case. The Listing Committee thoroughly enquired the matter and thereafter on 17.8.2005, decided to revoke the suspension order, suspending trading in securities of the plaintiff Company, That revocation order was conditional and three conditions were put by the BSE for revocation of the suspension order passed against the plaintiff. The three conditions were that the plaintiff will give restoration fee of Rs. 2,40,000/ -, the plaintiff shall put the Directors' share in lock -in of the plaintiff -Company and that he will also put the said shares in demat form and will produce the appropriate certificate evidencing lock -in of the Directors' shares and putting those shares in demat form. The plaintiff - Company was further directed to furnish a certificate declaring that 'all fillings/report made with stock exchange (BSE) and Registrar of Companies are the same with respect to the content and informations contained in these filling/reports.' According to the plaintiff, the plaintiff complied with all those conditions put by the Listing Committee of the BSE in its decision dated 17.8.2005 and the plaintiff informed the BSE vide its letter dated 5.9:2005 of compliance of all the conditions. The plaintiff's case is that despite this revocation of the suspension order and compliance of the plaintiff of all the conditions, which were imposed by the decision dated 17.8.2005, the plaintiff's shares are not permitted to be traded in the BSE. Ultimately, on 26.7.2006, the plaintiff gave last letter to the BSE and requested them to permit the trading in the equity shares of the plaintiff -Company within 15 days lest, the plaintiff Company will initiate legal proceedings against the BSE. In the background of these facts, the plaintiff in the present suit claimed that it may be declared that there is no legal proceeding pending against the plaintiff on the basis of which the BSE can deny the trading in shares of the plaintiff -Company. The plaintiff sought relief of injunction against the BSE that the BSE be restrained from interfering in the share trading of the plaintiff -Company. The plaintiff also claimed damages of Rs. 57,500/ - on the basis of the grounds mentioned in the plaint. The plaintiff also prayed that the personal responsibility of the officers of the BSE be fixed who are responsible for putting restriction in trading.
(3.) THE defendant BSE submitted detail written statement and raised objection about the territorial jurisdiction of the court below and also raised objection in entertaining the suit by the civil court by taking help of Section 23L of the Securities Contracts (Regulation) Act, 1956 (for short 'the Act of 1956') read with Rule 19(5) of the Securities Contracts (Regulation) Rules, 1957 (for short 'the Rules of 1957') framed under the Act of 1956. It was prayed before the trial court that the question of jurisdiction of civil court be decided before any issue. The trial court refused to decide the question of jurisdiction of civil court as preliminary issue, therefore, the petitioner -defendants preferred S.B. Civil Writ Petition No. 7477/2006 before this Court. According to the petitioner -defendants, the question of jurisdiction was pure question of law and, therefore, it could have been decided without evidence of the parties. It was contended before this Court that the issue of jurisdiction goes to the root of the matter. It appears that the writ petition was not seriously contested by the plaintiff and, therefore, this Court by order dated 20.12.2006 passed in the above writ petition No. 7477/2006 allowed the writ petition of the present petitioners -defendants and directed the trial court to take up the issue with regard to the objection as to the maintainability of the suit as pointedly raised in para No. 5(b) of the written statement as a preliminary issue. This Court also observed that so far as the objection with regard to the territorial jurisdiction raised in para 5(a) of the written statement, that shall be taken up along with other issues.;