3A Capital Services Limited And Anr. vs Sebi

Date of Decision: 24.02.2020

Misc. Application No. 570 of 2019 And Appeal No. 448 of 2019

1.

3A Capital Services Limited

2. 3A Financial Services Limited 204, 2nd Floor, Sahyog Building, Above Central Bank of India, S.V. Road, Kandivali (W), Mumbai- 400 067 ...Appellants

Versus

1. Bombay Stock Exchange Limited 25th Floor, P J Towers, Dalal Street, Mumbai- 400 001, India

2. Securities and Exchange Board of India, SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051

3. Indo Alusys Industries Limited 606, Tolstoy House 15, Tolstoy Marg, Delhi- 110 001

4. Mr. Pradeep Kumar Jain 606, Tolstoy House 15, Tolstoy Marg, Delhi- 110 001

5. Sobhagya Capital Options Limited B-206, Okhla Industrial Area, Phase-I, New Delhi, South Delhi- 110 020 ...Respondents 2

Mr. Madhur Rai, Advocate i/b PRS Legal for Appellants.

Mr. Anubhav Ghosh, Advocate with Ms. Rashi Dalmia, Advocate i/b The Law Point for Respondent No. 1

Mr. Akshay Patil, Advocate with Mr. Chirag Bhavsar and Mr. Harshad Vyas, Advocates i/b MDP & Partners for Respondent No. 2

Mr. Joby Mathew, Advocate with Mr. Anshuman Sugla, Advocate i/b Joby Mathew & Associates for Respondent No. 3 and 4

CORAM: Justice Tarun Agarwala, Presiding Officer Dr. C.K.G. Nair, Member Justice M. T. Joshi, Judicial Member

Per: Justice Tarun Agarwala (Oral)

1. The present appeal has been filed against the

communication of the Bombay Stock Exchange Limited ("BSE

Limited" for convenience) intimating the removal of the name

of Respondent No. 3 company Indo Alusys Industries Limited

from the Dissemination Board of BSE Limited.

2. There is a delay of 232 days in filing the appeal and

accordingly an application has been filed for condoning the

delay.

3. Having heard the learned counsel for the appellant, we

find that an allegation has been made that the appellants are

minority shareholders in the Respondent No. 3 company jointly

holding 3,34,640 shares in the said company. This company 3

was a listed company with the Delhi Stock Exchange. After the

Delhi Stock Exchange ceased to operate as a Stock Exchange

the said company was shifted to the Dissemination Board of

Bombay Stock Exchange. Securities and Exchange Board of

India ("SEBI" for convenience) issued a Circular dated October

10, 2016 providing two options to the companies lying on the

Dissemination Board of the Bombay Stock Exchange and

National Stock Exchange. Based on the Circular, the company

decided to provide an exit opportunity to the public shareholders

of its company. Accordingly, a valuation of the shares was

carried out independently by SEBI Registered Merchant Banker

based on which an exit offer was provided to the shareholders

either to continue as a shareholder in the company or avail the

exit offer. This exit offer was made on May 28, 2018 based on

which the impugned decision was communicated to the

company on September 07, 2018 allowing the company to exit

from the Dissemination Board of Bombay Stock Exchange.

4. We find from the record that Appellant No. 1 had only

1800 shares in the company and did not protest at the stage

when the exit offer was made by the company to the

shareholders on May 28, 2018. In fact Appellant No. 1

continued to remain as a shareholder and purchased 3.3 lakh

shares after the exiting the company on December 17, 2018. 4

Further Appellant No. 2 did not hold any shares of the company

and purchased shares after the exit offer had closed and the

company had exited from the Dissemination Board.

5. In the light of the aforesaid, we are of opinion that the

appellants are not aggrieved persons and cannot be affected by

the valuation done independently by the Merchant Banker

appointed by SEBI. After the exit option granted to the

company has already been implemented, it is no longer open to

the appellants to contest that the valuation done by the Merchant

Banker appointed by SEBI was incorrect. The plea that this

Tribunal should appoint a fresh Merchant Banker to value the

shares is misconceived and cannot be accepted.

6. We find there is an inordinate delay in filing the appeal.

The appeal lacks merit and is dismissed on both the counts.

Sd/-

Justice Tarun Agarwala Presiding Officer

Sd/-

Dr. C.K.G. Nair Member

Sd/-

Justice M. T. Joshi Judicial Member 24.02.2020 Prepared & Compared By: PK