Financial Technologies (India) ... vs Sebi

Date of Decision: 16.06.2015

Misc. Application No. 214 of 2015 In Appeal No. 437 of 2014

Financial Technologies (India) Limited CTS No. 256 & 257, Suren Road, Chakala Andheri (East), Mumbai- 400 093 ...Appellant

Versus

1.

Securities and Exchange Board of India, SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 ...Respondent No. 1

2. MCX Stock Exchange Limited Exchange Square, Suren Road, Andheri (East) Mumbai- 400 093 ...Respondent No. 2

3. MCX-SX Clearing Corporation Limited ...Proposed Respondent No. 3

Mr. Janak Dwarkadas, Senior Advocate with Mr. Deepak Dhane, Advocate i/b Joby Mathew & Associates for the Appellant.

Mr. Shiraz Rustomjee, Senior Advocate with Mr. Rushin Kapadia, Advocate i/b K. Ashar & Co. for Respondent No. 1

Mr. Akshay Patil, Advocate with Ms. Medha Agarwal, Advocate i/b Khare Legal Chambers for Respondent Nos. 2 & 3

CORAM: Justice J.P. Devadhar, Presiding Officer Jog Singh, Member

Per: Justice J.P. Devadhar (Oral)

1. By this Miscellaneous Application appellant seeks to implead

MCX-SX Clearing Corporation Limited as party respondent in Appeal 2

No. 437 of 2014 and pending disposal of the said appeal seeks an order

restraining MCX-SX Clearing Corporation Limited from taking steps

pursuant to resolution that may be passed in the Extra Ordinary General

Meeting scheduled on 16.06.2015 at 11.30 A.M. and if necessary SEBI

may be directed to issue suitable directions to MCX-SX Clearing

Corporation Limited.

2. In this case, SEBI by its order dated March 19, 2014 had directed

the appellant to divest its shareholding in the relevant entities including

the shares in MCX-SX Clearing Corporation Limited within the time

stipulated therein. Challenging the said order appellant had filed an

appeal before this Tribunal. While dismissing the said appeal on July 9,

2014 this Tribunal had extended the time to comply with the order of

SEBI by four weeks. Challenging the order of this Tribunal the appellant

has filed an appeal before the Apex Court and the same is admitted on

February 06, 2015. In the meantime, the appellant had filed an

application before SEBI seeking extension of time to divest the shares in

the various entities held by the appellant, without prejudice to its right in

the appeal pending before the Apex Court. The said application was

rejected by SEBI on 22.09.2014 and appeal filed against the said order is

pending before this Tribunal.

3. Mr. Dwarkadas, learned Senior Advocate appearing on behalf the

appellant submitted that even though MCX-SX Clearing Corporation

Limited is empowered to amend its Article of Association, the intended

resolution if passed would prejudicially affect the financial interest of the

appellant, and therefore this Tribunal be pleased to restrain MCX-SX 3

Clearing Corporation Limited from implementing the resolution that may

be passed, till the disposal of the Appeal No. 437 of 2014.

4. We see no merit in the above contentions.

5. Fact that SEBI has declined to grant extension of time to sell the

shares held by the appellant and the appeal filed by the appellant against

the said order is pending before this Tribunal cannot be a ground to

implead MCX-SX Clearing Corporation Limited as party respondent to

the appeal and to restrain MCX-SX Clearing Corporation Limited from

passing any resolution to amend its Articles of Association. MCX-SX

Clearing Corporation Limited is neither a proper nor a necessary party to

the appeal pending before this Tribunal. Moreover, if the proposed action

of MCX-SX Clearing Corporation Limited is in contravention of the

provisions of Companies Act, 2013 then the proper course for the

appellant is to move the authorities under the Companies Act, 2013 and

not to implead MCX-SX Clearing Corporation Limited as party

respondent to the appeal.

6. In these circumstances, we see no merit in the Miscellaneous

Application and the same is hereby dismissed with no order as to costs.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Jog Singh Member

16.06.2015 Prepared & Compared By: PK