Vishvapradhan Commercial Private ... vs Sebi

Date of Decision : 04/01/2018

Appeal No.321 of 2017

Vishvapradhan Commercial Private Limited 4th floor, Plot No.38, Institutional Area, Sector 32, Gurugram - 122 001. Haryana. ... Appellant

Versus

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

Mr. Somasekhar Sundaresan a/w Mr. Dhaval Kothari, Mr. Arindam Ghosh, Mr. Manish Chhangani and Mr. Akshat Agarwal, Advocates for the Appellant.

Mr. Pradeep Sancheti, Senior Advocate a/w Mr. Tomu Francis and Mr. Vivek Shah, Advocates for the Respondent.

CORAM : Justice J. P. Devadhar, Presiding Officer Dr. C. K. G. Nair, Member

Per : Justice J. P. Devadhar (Oral)

1.

Appellant is aggrieved by the order passed by the Whole Time

Member ("WTM" for short) of Securities and Exchange Board of India

("SEBI" for short) on 3rd November, 2017. By the said order, the WTM

has rejected the plea of the appellant in seeking inspection of

documents and has called upon the appellant to submit its reply to the

show-cause notice within the time stipulated therein. 2

2. By show-cause notice dated 20th December, 2016 the appellant

was called upon to show cause as to why action should not be taken

against the appellant for indirectly acquiring control over New Delhi

Television Ltd. ("NDTV" for short) pursuant to the loan agreement

dated 21/7/2009 entered into by and between the appellant and RRPR

Holding Private Limited and its promoters, without following the

procedure prescribed under the SEBI (Substantial Acquisition of Shares

and Takeovers) Regulations, 1997 ("Takeover Regulations, 1997") read

with SEBI (Substantial Acquisition of Shares and Takeovers)

Regulations, 2011 ("Takeover Regulations, 2011").

3. On the appellant seeking inspection of documents before filing

reply to the show-cause notice, inspection of some documents were

given by SEBI and inspection of the remaining documents were denied.

4. Challenging the decision of SEBI in refusing to give inspection of

the documents, appellant filed Appeal No.144 of 2017 which was

disposed of by this Tribunal on 27th July, 2017 by recording the

statement made by Counsel for SEBI that the WTM of SEBI would hear

the appellant on the issue of inspection and thereafter pass appropriate

order.

5. Accordingly, the appellant was heard by the WTM and by the

impugned order, WTM of SEBI has declined to give inspection of the

documents sought by the appellant and called upon the appellant to file

reply to the show-cause notice within the time set out therein. 3

6. Although inspection of several documents are sought in the

memo of appeal, Mr. Somasekhar Sundaresan, learned counsel for the

appellant fairly restricted his argument to seek inspection of the

following three documents, namely:-

(i) affidavits filed by SEBI before the Delhi High Court in the

proceedings initiated by Quantum Securities Limited

against NDTV;

(ii) pages 1 to 99 of the notes on pre-pages;

(iii) report of SEBI on the ZOCD agreement pursuant to the

directions given by this Tribunal on 13/4/2016 in Appeal

No.55 of 2015 (Mr. Victor Fernandes vs. SEBI).

7. Mr. Sancheti, learned senior counsel appearing on behalf of SEBI

fairly stated that without prejudice to the contention of SEBI that appeal

against refusal to give inspection of documents is not maintainable, in

the facts of present case, although the inspection of above documents

were denied on ground that the issues are sub judice, SEBI would

furnish copies of the aforesaid documents to the appellant if directed by

this Tribunal.

8. Accordingly, we pass the following order:-

(a) Plea of the appellant in seeking copies of the affidavits filed

by SEBI in the proceeding initiated by Quantum Securities

Ltd. against NDTV before the Delhi High Court deserves

acceptance, because, the issues raised in the proceedings 4

pending before the Delhi High Court and the issues raised

in the show-cause notice issued against the appellant, are

closely connected. Accordingly, we direct SEBI to give

copies of the affidavits filed by SEBI before the Delhi High

Court in the proceedings initiated by Quantum Securities

Ltd. against NDTV.

(b) Request of the appellant in seeking inspection of pages 1 to

99 of the notes on pre-pages, in our opinion is unjustified.

SEBI has clearly stated that pages 1 to 99 of the notes on

pre-pages contain preliminary internal notings and the

same are crystallized into final findings/approval in the

notings at pages 100 to 109 and copies of pages 100 to 109

have already been provided to the appellant. In these

circumstances, in our opinion, the appellant is not justified

in seeking inspection of pages 1 to 99 of the notes on pre-

pages.

(c) Plea of the appellant in seeking a copy of the report

prepared by SEBI pursuant to the direction given by this

Tribunal on 13/4/2016 in Appeal No.55 of 2015 deserves

acceptance, because, the appellant claims that the clauses

of the ZOCD agreement considered in the report of SEBI

are similar to the clauses in the loan agreement entered

into by the appellant with RRPR Holding Private Ltd. and

its promoters on 21/7/2009. Hence, we direct SEBI to 5

furnish a copy of the report prepared by SEBI pursuant to

the direction of this Tribunal on 13/4/2016 in Appeal NO.55

of 2015. However, we make it clear that we have neither

gone through the aforesaid report of SEBI nor we have

expressed any opinion on the said report.

9. Appeal is disposed of in the aforesaid terms with no order as to

costs.

Sd/-

Justice J. P. Devadhar Presiding Officer

Sd/-

Dr. C. K. G. Nair Member

04/01/2018 prepared & compared by-dg