M/S. Divine Multi Media (India) Ltd. vs Sebi

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI DATE : 25.03.2019

Appeal No. 17 of 2019 M/s. Divine Multi Media (India) Ltd. 1st Floor, 101/2, Panorama Complex, R. C. Dutt Road, Vadodara - 390007. ..... Appellant

Versus

BSE Ltd. Floor 25, P. J. Towers, Dalal Street, Mumbai - 400 001. ... Respondent

Mr. Devesh R. Desai, Company Secretary with Mr. Nitin H. Parikh, Company Secretary for the Appellant. Mr. Tomu Francis, Advocate with Mr. Arka Saha, Advocate i/b Khaitan & Co. for the Respondent.

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

Per : Justice Tarun Agarwala, Presiding Officer (Oral)

1.

We have heard the learned counsel for the parties. The trading

in the equity shares of the appellant company was suspended with

effect from April 18, 2017 on account of non-compliance of the

Listing Agreement under Securities and Exchange Board of India

(Listing Obligations and Disclosure Requirements) Regulations,

2015 (hereinafter referred to as Listing Regulations). Inspite of the 2

opportunity being granted, the suspension of the trading in the equity

shares was not revoked by the appellant as a result a show cause

notice dated April 26, 2018 was issued to the appellant to show cause

as to why the Company should not be compulsorily delisted under

Section 21A of the Securities Contracts (Regulations) Act, 1956. It

transpires that the appellant company has sent an e-mail dated June 7,

2018 intimating the respondent that they are willing to comply with

the Listing Regulations. It is alleged that certain compliances were

made but before the penalty amount could be deposited, the

impugned order was passed on June 26, 2018. The appellant being

aggrieved by the said order has filed the present appeal.

2. In the impugned order, we find that the process that was

required to be adopted by the respondent has been carved out as

under :-

"b. Process to be followed for compulsory delisting in terms of Delisting Regulations is as follows :

• Formation of the Delisting Panel, i.e. the present Committee in terms of Regulation 22(1) of Delisting Regulations.

• Provide an opportunity of representation and personal hearing to the Company.

• Issuance of Public notice.

• Consideration of representation made by the Company / any aggrieved person by the Committee.

• Consideration of criteria specified in Schedule III of Delisting Regulations."

3 3. The proviso to Section 21A provides that the securities of the

company shall not be delisted unless the company was given a

reasonable opportunity of being heard. Admittedly, in the instant

case after the issuance of the show cause notice, no opportunity of

hearing was provided to the appellant. Consequently, the impugned

order suffers from vice of violation of natural justice as embodied in

Article 14 of the Constitution of India.

4. The impugned order, consequently, cannot be sustained and is

quashed. The appeal is allowed. Respondent is directed to proceed

from the stage of issuance of show cause notice.

Sd/-

Justice Tarun Agarwala Presiding Officer

Sd/-

Dr. C. K. G. Nair Member

Sd/-

Justice M. T. Joshi Judicial Member 25.03.2019 Prepared & Compared by PTM