Risa International Ltd. vs Sebi

Date of Decision : 30.03.2016

Appeal No. 64 of 2016

Risa International Ltd. 1315, B Wing, Dalamal Tower, 214, Free Press Journal Marg, Nariman Point, Mumbai - 400 021. ...Appellant

Versus

BSE Limited Phiroze Jeejeebhoy Towers Dalal Street, Mumbai - 400 001. ...Respondent

Prakash Shah, Advocate for the Appellant.

Mr. Pesi Modi, Senior Advocate with Mr. Ajay Khaire, Advocate for the Respondent.

WITH

Appeal No. 65 of 2016

High Ground Enterprise Ltd. Office No. 2, Om Heera Panna Mall, 2nd Floor, Oshiwara, Andheri (West), Mumbai - 400 053 ...Appellant

Versus

BSE Limited Phiroze Jeejeebhoy Towers Dalal Street, Mumbai - 400 001. ...Respondent

Mr. Ravichandra S. Hegde, Advocate with Mr. Paras Parekh and Mr. Dhaval Kothari, Advocates for the Appellant.

Mr. Pesi Modi, Senior Advocate with Mr. Ajay Khaire, Advocate for the Respondent.

CORAM : Justice J.P. Devadhar, Presiding Officer Jog Singh, Member 2

Per : J.P. Devadhar (Oral)

1.

Not on Board. Taken up by consent of parties. These two appeals

are filed by the Appellants to challenge the notice issued by the Bombay

Stock Exchange's (BSE for short) on 28th March, 2016 whereby the trading

members of the stock exchange are informed that the trading in the

securities of 31 companies (including the appellants) shall be suspended

with effect from 31st March, 2016. Since the challenge in both appeals is to

the notice of BSE dated 28th March, 2016, both the appeals are heard

together and disposed of by this common decision.

2. The impugned notice dated 28th March, 2016 refers to its earlier

notice dated 4th March, 2016 which in turn refers to its earlier notice dated

18th December, 2015.

3. Facts emerging from the aforesaid three notices is that, initially by a

notice dated 18th December, 2015 all the trading members as also the listed

companies of the exchange were informed that in view of various orders

passed by SEBI in relation to preferential allotment done by companies in

past few years, the trading in the securities of such companies shall be

suspended as a preventive measure till such time the company submits an

auditor's certificate with relevant documents on issues as more particularly

set out in the said notice.

4. Subsequently, by a detailed notice dated 4th March, 2016 the trading

members as well as the listed companies were informed that in continuation

of its earlier notice dated 18th December, 2015 the trading in the securities of

the companies satisfying the parameters of the exchange shall be suspended

till such time the companies submit the auditor's certificate containing

relevant information with supporting documents as more particularly set out

in the said notice are submitted to BSE.

3

5. Since no such auditor certificate was furnished, by the impugned

notice dated 28th March, 2016, the trading members of the exchange were

informed that the trading in the securities of the 31 companies (including the

appellants) shall be suspended with effect from 31st March, 2016.

Challenging the aforesaid notice the appellants have filed these two appeals.

6. Relying on a decision of the Delhi High Court in case of Mahadushi

International Trade Ltd. vs. BSE Ltd (W.P. (C) No:12332 of 2015) dated

15/1/2016, counsel on both sides have made submission on behalf of their

respective clients. It is a matter of record that inspite of the initial notice

dated 18th December, 2015 and the subsequent notice dated 4th March, 2016,

the appellants till date have not submitted the auditor certificate as

contemplated in the said notices. Since the impugned action is being taken

not on the ground that the appellants have committed any serious violations

of the rules/regulations framed by the Exchange, but on the ground that the

appellants have failed to furnish requisite auditor certificate along with

necessary documents and since the appellants are ready and willing to

furnish requisite auditor certificate with documents as contemplated under

the notices dated 18th December, 2015 and 4th March, 2016 within two

weeks from today, without going into the merits of the case we grant

extension of two weeks' time to the appellants to submit the requisite

auditor's certificate as contemplated in the notices dates 18th December,

2015 and 4th March, 2016 subject to payment of costs of Rs.10,000/- to be

paid by each appellant to BSE within one week from today. If the

appellants submit the requisite auditor's certificate as contemplated in

notices dated 18th December, 2015and 4th March, 2016 within a period of

two weeks from today, BSE shall consider the same and thereafter may pass

appropriate orders thereon as it deems fit. If the appellants fail to submit the

auditor's certificate within two weeks from today then the BSE shall be at 4

liberty to suspend the trading in the shares of the appellant companies

forthwith.

7. Accordingly, BSE is directed not to suspend the trading in the

securities of the appellants herein as per the impugned notice dated March

28, 2016 for the reasons stated hereinabove, however, subject to payment of

costs of Rs. 10,000/- to be paid by each appellant to BSE within one week

from today.

8. Both the appeals are disposed of accordingly.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Jog Singh Member

30.03.2016 Prepared and compared by RHN