Fortune Foods Limited vs Sebi

Date of Decision: 26.7.2018

Appeal No.234 of 2018

Softrak Venture Investment Ltd. 201, Moonlight Shopping Centre Near Maruti Towers, Drive in Road, Memnagar, Ahmedabad - 380 052. .... Appellant

Versus

BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001. ... Respondent

Mr. J.J. Bhatt, Advocate with Ms. Rinku Valanju, Advocate i/b. R.V. Legal for the Appellant.

Mr. Tomu Francis, Advocate with Mr. Vivek Shah, Advocate i/b. ELP for the Respondent.

With Appeal No.235 of 2018

Golkonda Engineering Enterprises Ltd. 1-7-241/11D/, S D Road, Secunderabad- 500003. .... Appellant

Versus

BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001. ... Respondent

Mr. Prakash Shah, Advocate i/b. Prakash Shah & Associates for the Appellant. 2

Mr. Tomu Francis, Advocate with Mr. Vivek Shah, Advocate i/b. ELP for the Respondent.

With Appeal No.241 of 2018

Panjon Limited 01, Panjon Farm House, Near Hinkargiri Jain Tirth Airport Bijasan Road, Indore - 452005. .... Appellant

Versus

BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001. ... Respondent

Mr. Prakash Shah, Advocate i/b. Prakash Shah & Associates for the Appellant.

Mr. Tomu Francis, Advocate with Mr. Vivek Shah, Advocate i/b. ELP for the Respondent.

With Misc. Application No.206 of 2018 And Appeal No.242 of 2018

Fortune Foods Limited 5, Gulshan Apartment, Tigrania Corner, New Mumbai Agra Road, Nashik - 422011. .... Appellant

Versus

BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001. ... Respondent

Mr. Prakash Shah, Advocate i/b. Prakash Shah & Associates for the Appellant. 3

Mr. Tomu Francis, Advocate with Mr. Vivek Shah, Advocate i/b. ELP for the Respondent.

With Misc. Application No.207 of 2018 And Appeal No.243 of 2018

Sangam Healthcare Products Limited 205 & 206, Amarchand Sharma Complex, S.P. Road, Secunderabad - 500002 Telangana. .... Appellant

Versus

BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001. ... Respondent

Mr. Prakash Shah, Advocate i/b. Prakash Shah & Associates for the Appellant.

Mr. Tomu Francis, Advocate with Mr. Vivek Shah and Ms. Misbah Dada, Advocates i/b. ELP for the Respondent.

CORAM : Dr. C.K.G. Nair, Member

Per : Dr. C.K.G. Nair (Oral)

Misc. Application No.206 in Appeal no.242 of 2018 and Misc. Application no.207 of 2018 in Appeal no.243 of 2018.

There is a delay of 9 days in filing Appeal no.242 of 2018 and 243 of

2018 respectively. For the reasons stated in the Misc. Applications the

delay is condoned.

Both the Misc. Applications are disposed of accordingly with no

order as to costs. 4

Appeal Nos.234, 235, 241, 242 and 243 of 2018

1.

All these Appeals have been filed challenging the compulsory

delisting order issued by the BSE Limited on various dates. By these

orders several companies, including the five appellants before us, have been

delisted from BSE Limited with effect from 4th July, 2018.

2. The basic argument of the learned Counsel for the appellants Mr. J.J.

Bhatt and Mr. Prakash Shah is that a fair opportunity of being heard was

not granted prior to issuing the impugned order. Sub-Section 21A of the

Securities Contracts (Regulation) Act, 1956 ('SCRA') specifically provides

for giving a reasonable opportunity of being heard prior to delisting a listed

company. Similarly Regulation 22(1) of SEBI Delisting Regulations, 2009

also provides for the same. Accordingly and since delisting a company, is a

serious matter impacting multiple stakeholders natural justice has to be

ensured.

3. Learned Counsel Shri Tomu Francis appearing on behalf of BSE

Limited on the other hand submits that a reasonable opportunity of being

heard does not mean that a personal hearing needs to be granted. None of

the appellants in these appeals in their replies has given any justification for

continuing to remain listed. Further there are serious non compliances of

various provisions of the Listing Regulation/Agreement. As such providing

another opportunity in terms of personal hearing may not serve any

purpose.

4. I do not agree with the submissions made by the Counsel for BSE. It

is clearly stated in both the SCRA, 1956 and in the Delisting Regulations, 5

2009 that before compulsorily delisting a company a reasonable

opportunity of being heard is to be provided to the company. Given the

consequences of compulsory delisting on multiple stakeholders it is

imperative that this provision of giving a reasonable opportunity of being

heard is followed in letter and spirit.

5. Accordingly without going into the merit of each individual appeal I

direct the BSE to give the appellants an opportunity of hearing, including

personal hearing if requested for by the appellants, within a period of 8

weeks from today and pass appropriate orders as per law.

6. In the interim, status quo to be maintained.

7. All five appeals are disposed of on above terms with no order as to

costs.

Sd/-

Dr. C. K. G. Nair Member

26.7.2018 Prepared and compared by RHN