Sahara India Real Estate Corporation Limited & Ors. Vs. Securities and Exchange Board of India & Anr.
[Civil Appeal No. 9813 of 2011]
[Civil Appeal No. 9833 of 2011]
K. S. RADHAKRISHNAN, J.
1. We are, in these appeals, primarily concerned with the powers of the Securities and Exchange Board of India (for short 'SEBI') under Section 55A(b) of the Companies Act, 1956 to administer various provisions relating to issue and transfer of securities to the public by listed companies or companies which intend to get their securities listed on any recognized stock exchange in India and also the question whether Optionally Fully Convertible Debentures (for short 'OFCDs') offered by the appellants should have been listed on any recognized stock exchange in India, being Public Issue under Section 73 read with Section 60B and allied provisions of the Companies Act and whether they had violated the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 [for short 'DIP Guidelines'] and various regulations of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 [for short 'ICDR 2009'], and also whether OFCDs issued are securities under the Securities Contracts (Regulation) Act, 1956 [for short 'SCR Act'].
2. Sahara India Real Estate Corporation Limited (for short 'SIRECL') and Sahara Housing Investment Corporation Limited (for short 'SHICL"), appellants herein (conveniently called Saharas), are the companies controlled by Sahara Group. Saharas have raised almost identical issues on facts as well as on questions of law before us and hence we are disposing off both the appeals by way of a common judgment.
3. SIRECL was originally incorporated as Sahara India "C" Junxion Corporation Limited on 28.10.2005 as a public limited company under the Companies Act and it changed its name to SIRECL on 7.3.2008. As per the Balance Sheet of the company as on 31.12.2007, its cash and bank balances were Rs.6,71,882 and its net current assets worth Rs.6,54,660. Company had no fixed assets nor any investment as on that date. SIRECL's operational and other expenses for the three quarters ending 31.12.2007 were Rs.9,292 and the loss carried forward to the Balance Sheet as on that date was Rs.3,28,345.
4. SIRECL, in its Extraordinary General Meeting held on 3.3.2008, resolved through a special resolution passed in terms of Section 81(1A) of the Companies Act to raise funds through unsecured OFCDs by way of private placement to friends, associates, group companies, workers/employees and other individuals associated/affiliated or connected in any manner with Sahara Group of Companies (for short 'Sahara Group') without giving any advertisement to general public. Company authorized its Board of Directors to decide the terms and conditions and revision thereof, namely, face value of each OFCD, minimum application size, tenure, conversion and interest rate. Board of Directors, consequently, held a meeting on 10.3.2008 and resolved to issue unsecured OFCDs by way of private placement, the details of which were mentioned in the Red Herring Prospectus (for short 'RHP') filed with the Registrar of Companies (for short "RoC"), Kanpur. SIRECL had specifically indicated in the RHP that they did not intend to get their securities listed on any recognized stock exchange.
Further, it was also stated in the RHP that only those persons to whom the Information Memorandum (for short 'IM') was circulated and/or approached privately who were associated/affiliated or connected in any manner with Sahara Group, would be eligible to apply. Further, it was also stated in the RHP that the funds raised by the company would be utilized for the purpose of financing the acquisition of townships, residential apartments, shopping complexes etc. and construction activities would be undertaken by the company in major cities of the country and also would finance other commercial activities/projects taken up by the company within or apart from the above projects. RHP also indicated that the intention of the company was to carry out infrastructural activities and the amount collected from the issue would be utilized in financing the completion of projects, namely, establishing/constructing the bridges, modernizing or setting up of airports, rail system or any other projects which might be alloted to the company from time to time in future. RHP also highlighted the intention of the company to engage in the business of electric power generation and transmission and that the proceeds of the current issue or debentures would be utilized for power projects which would be alloted to the company and that the money, not required immediately, might be parked/invested, inter alia, by way of circulating capital with partnership firms or joint ventures, or in any other manner, as per the decision of the Board of Directors from time to time. SIRECL, under Section 60B of the Companies Act, filed the RHP before the RoC, Uttar Pradesh on 13.3.2008, which was registered on 18.3.2008. SIRECL then in April 2008, circulated IM along with the application forms to its so called friends, associated group companies, workers/employees and other individuals associated with Sahara Group for subscribing to the OFCDs by way of private placement. Then IM carried a recital that it was private and confidential and not for circulation. A brief reference to the IM may be useful, hence given below:
"PRIVATE & CONFIDENTIAL
(NOT FOR CIRCULATION)
INFORMATION MEMORANDUM FOR PRIVATE PLACEMENT OF OPTIONALLY FULLY
CONVERTIBLE UNSECURED DEBENTURES (OFCD)
This Memorandum of Information is being made by Sahara India Real Estate Corporation Limited (formerly Sahara India 'C' Junxion Corporation Limited) which is an unlisted Company and neither its equity shares nor any of the bonds/debentures are listed or proposed to be listed. This issue is purely on the private placement basis and the company does not intend to get these OFCD's listed on any of the Stock Exchanges in India or Abroad. This Memorandum for Private Placement is neither a Prospectus nor a Statement in Lieu of prospectus. It does not constitute an offer for an invitation to subscribe to OFCD's issued by Sahara India Real Estate Corporation Limited. The Memorandum for Private Placement is intended to form the basis of evaluation for the investors to whom it is addressed and who are willing and eligible to subscribe to these OFCD's. Investors are required to make their own independent evaluation and judgment before making the investment. The contents of this Memorandum for Private Placement are intended to be used by the investors to whom it is addressed and distributed. This Memorandum for Private Placement is not intended for distribution and is for the consideration of the person to whom it is addressed and should not be reproduced by the recipient. The OFCD's mentioned herein are being issued on a private placement basis and this offer does not constitute a public offer/invitation."
(emphasis added)
5. The RHP, which was issued prior to the IM, had also given the details and particulars of the three OFCDs issued by SIRECL appended as Annexure-I, which would give a brief idea of the Tenure of the Bonds issued, its face value, redemption value etc., a projection of which is given below:
Particulars
Nature of OFCDs Abode Bond
Real Estate Bond
Nirmaan Bond
Tenure
120 months
60 months
48 months
Face Value
Rs.5,000/-
Rs.12,000/-
Rs.5,000/-
Redemption Value
Rs.15,530/-
Rs.15,254/-
Rs.7,728/-
Early Redemption
After 60 months
NIL
After 18 months
Conversion
On completion of 120 months
On completion of 60 months
On completion of 48 months
Minimum
Rs.5,000/-
Rs.12,000/-
Rs.5,000/-
Application Size
Nominee System
Double Nominee
Double Nominee
Double Nominee
Transfer
Yes
Yes
Yes
6. I may also indicate that all the bonds stipulated that bond holders could avail of loan facility as per the terms and conditions of the application forms. Nirmaan and Real Estate Bonds prescribed an additional feature of death risk cover as well. Clause 13 of RHP imposed no restriction on the transfer of the OFCDs.
7. SIRCEL, therefore, floated the issue of the OFCDs as an open ended scheme and collected an amount of Rs.19400,86,64,200 (Nineteen thousand four hundred crores, eighty six lacs, sixty four thousand and two hundred only) from 25.4.2008 to 13.4.2011. Company had a total collection of Rs.17656,53,22,500 (Seventeen thousand six hundred and fifty six crores, fifty three lacs, twenty two thousand and five hundred only) as on 31.8.2011, after meeting the demand for premature redemption. The above mentioned amounts were collected from 2,21,07,271 investors.
8. SHICL, a member of Sahara Group companies, also convened an Annual General Meeting on 16.9.2009 to raise funds by issue of OFCDs, by way of private placement, to friends, associated group companies, workers/employees and other individuals associated/affiliated or connected in any manner with the Sahara Group companies. Consequently, a RHP was filed on 6.10.2009 under Section 60B of the Companies Act with the RoC, Mumbai, Maharashtra, which was registered on 15.10.2009. Later, SHICL issued OFCDs of the nature of Housing Bond; conversion price of Rs.5,000/- for each five bonds, Income Bond, conversion price of Rs.6,000/- for six bonds; Multiple Bond, conversion price of Rs.24,000/- for two bonds. Interest accrued on each of the three types of bonds was to be refunded to the bond holders.
9. SEBI, as already indicated, had come to know of the large scale collection of money from the public by Saharas through OFCDs, while processing the RHP submitted by Sahara Prime City Limited, another Company of the Sahara Group, on 12.1.2010 for its initial public offer. SEBI then addressed a letter dated 12.1.2010 to Enam Securities Private Limited, merchant bankers of Sahara Prime City Limited about the complaint received from one Roshan Lal alleging that Sahara Group was issuing Housing bonds without complying with Rules/Regulations/Guidelines issued by RBI/MCA/NHB. Merchant Banker sent a reply dated 29.1.2010 stating that SIRECL and SHICL were not registered with any stock exchange and were not subjected to any rule / regulation / guidelines / notification / directions framed thereunder and the issuance of OFCDs were in compliance with the applicable laws. Following the above, another letter dated 26.2.2010 was also sent by the Merchant Banker to SEBI stating that SIRECL and SHICL had issued the OFCDs pursuant to a special resolution under Section 81(1A) of the Companies Act, 1956 passed on 3.3.2008 and 16.9.2009 respectively. Further, it was also pointed out that they had issued and circulated an IM prior to the opening of the offer and that RHP issued by SIRECL dated 13.3.2008 was filed with RoC, U.P. and Uttarakhand and RHP issued by SIHCL dated 6.10.2009 was filed with RoC, Maharashtra.
10. SEBI on 21.4.2010 addressed a letter to the Regional Director, Northern and Western Regions of Ministry of Corporate Affairs (for short 'MCA') enclosing the complaint received in respect of OFCDs issued by Saharas. SEBI had stated that those companies had solicited and issued OFCDs violating statutory requirements and that they were not listed companies and had not filed the RHP with SEBI. SEBI sent a communication dated 12.5.2010 to Saharas calling for various details including the details regarding the number of application forms circulated after filing of RHP with RoC, details regarding the number of applications received and subscription amount received, date of opening and closing of subscription list of OFCDs, number and list of allotees etc.
11. SIRECL on 31.5.2010 addressed a letter to MCA for guidance/advice as to whether it was SEBI or MCA who had locus standi in the matter of unlisted companies in view of the provisions of Section 55A(c) of the Act. MCA, it is seen, had sent a letter dated 17.6.2010 to SIRECL stating that the matter was being examined under the relevant provisions of the Companies Act, 1956. SIRECL informed SEBI of the reply they had received from the MCA and that they would address SEBI after a decision was taken by MCA. Having not received the details called for from Saharas, SEBI had prima facie felt that SIRECL was carrying out various transactions in securities in a manner detrimental to the interests of the investors or to the securities market and, therefore, issued summons dated 30.8.2010, under Section 11C of the SEBI Act, directing the company to furnish the requisite information by 15.9.2010. Detailed reply dated 13.9.2010 was sent by SIRECL to SEBI, wherein it was stated that the company had followed the procedure prescribed under Section 60B of the Companies Act pursuant to the special resolution passed under Section 81(1A) in its meeting held on 3.3.2008 and filed its RHPs under Section 60B with the concerned RoC. Further, it was pointed out that SIRECL was not a listed company, nor did it intend to get its securities listed on any recognized stock exchange in India and that OFCDs issued by the company would not fall under Sections 55A(a) and/or (b) and hence the issue and/or transfer of securities and/or non-payment of dividend or administration of either the company or its issuance of OFCDs, were not to be administered by SEBI and all matters pertaining to the unlisted company would fall under the administration of the Central Government or RoC.
Further, it was urged that Regulations 3 and 6 of ICDR 2009 would not apply, since there was no public issue either in the nature of an initial public offer or further public offer as defined by Regulation 2(zc), 2(p) and/or 2(n) of ICDR 2009. OFCDs, it was pointed out, were restricted to a select group (as distinguished from general public), however large they might be and hence the issuance of OFCDs was not a public offer to attract the provisions of Regulations 3 and/or 6 of ICDR 2009. Company had stated that issuance of OFCDs of 2008 was also not covered by the SEBI (Issue and Listing Securities) Regulations, 2008, since it would apply to non-convertible debt securities, whereas the OFCDs issued by SIRECL were convertible securities. SIRECL, therefore, requested SEBI to withdraw the summons issued under Section 11C of the SEBI Act. Summons dated 23.9.2010 was also issued to SHICL, for which also an identical reply was sent to SEBI.
12. MCA, in the meanwhile, sent a letter dated 21.9.2010 to SIRECL under Section 234(1) of the Companies Act calling for various details including the amount collected through private placement, details regarding the number of investors to whom the allotment had been made, their names, addresses, utilization of the funds collected, its purpose, class or classes of persons to whom the allotment had been made and whether allotments were completed and various other details. SIRECL was directed to furnish the information within 15 days from the date of receipt of notice, failing which it was informed that penal action would be initiated against the company and its directors under Section 234(4)(a) of the Companies Act.
13. SEBI, in the meanwhile, sent a letter dated 23.9.2010 to SIRECL reminding that it had not provided information/documents on the issue of OFCDs. Proceeding issued for appointing the investigating agency was also forwarded to the company. SIRECL again replied by its letter dated 30.9.2010 raising the issue of jurisdiction of SEBI in investigating the affairs of SIRECL. SIRECL, however, replied to the letter of MCA dated 21.9.2010 on 4.10.2010, stating inter alia that it would be filing the prospectus on the closure of the issue in compliance with the provisions of Section 60B(9) of the Companies Act, stating therein the total capital raised by way of OFCDs and the related information by filing the prospectus. Further, it was also pointed out that allotment had been made to persons who were connected with the Sahara Group and that investors had given a declaration to the company to that effect in terms of the RHP. MCA then sent a reply dated 14.10.2010 stating that the points 1 to 3, 5 to 10, 12 to 16, 18 to 22 had been examined and appeared to be satisfactory. With regard to points 4, 11 and 17, the company was directed to effect compliance on closure of issue by filing of prospectus as required under Section 60B(9) of the Companies Act.
14. SEBI, in the meanwhile, issued a notice dated 24.11.2010 informing both SIRECL and SHICL that the issuance of OFCDs was a public issue and, therefore, securities were liable to be listed on a recognized stock exchange under Section 73 of the Companies Act. From the preliminary analysis, it was pointed out that the issuance of OFCDs by Saharas was prima facie in violation of Sections 56 and 73 of the Act and also various clauses of DIP Guidelines and SHICL had also prima facie violated Regulations 4(2), 5(1), 6, 7, 16(1), 20(1), 25, 26, 36, 37, 46 and 57 of ICDR 2009. Both the companies were, therefore, directed to show cause why action should not be initiated against them including issuance of direction to refund the money solicited and mobilized through the prospectus issued with respect to the OFCDs, since they had violated the provisions of the Companies Act, SEBI Act, erstwhile DIP Guidelines and ICDR 2009.
15. SIRECL had challenged the show-cause-notice dated 24.11.1010 before the Allahabad High Court, Lucknow Bench in W. P. No. 11702 of 2010, which the Court had stayed on 13.12.2010. SEBI took up the matter before this Court in S.L.P. (Civil) No. 36445 of 2010 and this Court did not interfere with the interim order, but ordered early disposal of the writ petition.
16. MCA, following its earlier letter dated 21.9.2010 issued another notice dated 14.2.2011 directing SIRECL to furnish details on four specific points, including the details of the number of persons who had applied in pursuance to the OFCDs issued, the mode of receipt of payment (Application Register), the name, address, number of persons to whom OFCDs were allotted (Allotment Register) and also whether the number of allottees to whom OFCDs were allotted etc. exceeded fifty. SIRECL replied to the notice on 26.2.2011. SIRECL, it was stated, had sent a password protected CD along with two separate sheets containing the procedure and the password to SEBI; the CD contained of investors' names, serial numbers and amounts invested in OFCDs. SEBI, however, could not open the CD due to non furnishing of the password. SEBI pointed out this fact before the High Court and the Court vacated the interim order dated 13.12.2010. SIRECL took up the matter before this Court in S.L.P. (Civil) No. 11023 of 2011.
17. SIRECL, in the meanwhile, claimed that it had furnished a separate CD along with the password vide letter dated 19.4.2011 to SEBI stating that due to the enormity of the work and time taken in collating and compiling the data relating to the names and addresses and the amount invested, the company could only provide the partial information relating to names, numbers and amount invested by the investors through the covering letter dated 18.3.2011 in a CD. SIRECL then moved the High Court on 29.4.2011 to recall the order dated 7.4.2011 on the plea that the details called for by SEBI had been furnished. The High Court dismissed the application, which led SIRECL filing SLP (Civil) No. 13204 of 2011 before this Court. This Court on 12.5.2011 passed the following order in SLP (Civil) No. 11023 of 2011 and SLP (Civil) No. 13204 of 2011: "In this matter the questions as to what is OFCD and the manner in which investments are called for are very important questions. SEBI, being the custodian of the Investor's and as an expert body, should examine these questions apart from other issues. Before we pass further orders, we want SEBI to decide the application(s) pending before it so that we could obtain the requisite input for deciding these petitions. We request SEBI to expeditiously hear and decide this case so that this Court can pass suitable orders on re-opening. However, effect to the order of SEBI will not be given. We are taking this route as we want to protect the interest of the Investor. In the meantime, the High Court may proceed, if it so chooses, to dispose of the case at the earliest."
18. SEBI then issued a fresh notice dated 20.5.2011 stating that Saharas had not provided any information to SEBI regarding details of its investors to show that the offer of OFCDs was made to less than fifty persons. Further, it was pointed out that Saharas though claimed, that the offer/issue was made on private placement basis, any offer/issue to fifty or more persons would be treated as public issue/offer in terms of the first proviso to Sub-section (3) of Section 67 of the Companies Act and the provisions of the Companies Act governing public issues and the provisions of DIP Guidelines and ICDR 2009 would consequently apply. Further, it was also pointed out in the notice that the RHP provided along with the letter of SIRCEL dated 15.1.2011 contained untrue statements which attracted the provisions of Sections 62 and 63 of the Act and hence the offer of OFCDs to public through the RHP was illegal. Further, it was stated that none of the disclosure requirements specified by SEBI or the investors protection measures prescribed for public issues under DIP Guidelines and ICDR 2009 had been complied with and hence there was prima facie violation of Section 56 of the Companies Act and hence offer of OFCDs of Saharas to the public was illegal. Notice also indicated that Saharas had violated the provisions of Section 73 of the Companies Act, by non- listing of their debentures in a recognized stock exchange. Further, it was also pointed out that Saharas had not executed any Debenture Trust Deed for their OFCDs, not appointed any Debenture Trustee and not created any Debenture Redemption Reserve, which would amount to violation of Sections 117A, 117B and 117C of the Companies Act. Non- compliance of furnishing details in Form No. 2A, as required under Rule 4CC of the Companies (Central Government's) General Rules and Forms, 1956 read with DIP Guidelines and ICDR 2009, it was pointed out, had violated Section 56(3) of the Companies Act.
19. SEBI notice dated 20.5.2011 also highlighted that the CD was secured in such a manner that no analysis was possible and the addresses of the OFCDs holders were incomplete or ambiguous. Serious doubts were also raised with regard to the identity and genuineness of the investors and the intention of the companies to repay the debenture holders upon redemption. Notice, therefore, stated that the companies had prima facie violated the provisions of the Companies Act, SEBI Act, 1992, DIP Guidelines and ICDR 2009 and hence the offer/issue of OFCDs to public was illegal, and imperiled the interest of investors in such OFCDs and was detrimental to the interest of the securities market. Saharas were, therefore, called upon to show cause why directions contained in the interim order of SEBI dated 24.11.2010 be not issued under Sections 11(1), 11(4)(B), 11A(1)(b) and 11B of SEBI Act read with Regulation 107 of ICDR 2009.
20. Saharas then sent a detailed reply dated 30.5.2011 pointing out that the appellants had made private placement of OFCDs to persons who were associated with Sahara Group and those issues were not public issues. Further, it was also urged that OFCDs issued were in the nature of "hybrid" as defined under the Companies Act and SEBI did not have jurisdiction to administer those securities since Hybrid securities were not included in the definition of 'securities' under the SEBI Act, SCR Act etc. Further, it was also urged that such hybrids were issued in terms of Section 60B of the Companies Act and, therefore, only the Central Government had the jurisdiction under Section 55A(c) of the Companies Act. Further, it was also pointed out that Sections 67 and 73 of the Companies Act could not be made applicable to Hybrid securities, so also the DIP Guidelines and ICDR 2009. Further, it was reiterated that the company had raised funds by way of private placement to friends, associates, group companies, workers/employees and other individuals associated/affiliated with Sahara Group, without giving any advertisement to the public. Further, it was also pointed out that RoC, Kanpur and Maharashtra had registered those RHPs without any demur and, therefore, it was unnecessary to send it to SEBI.
21. SEBI passed its final order through its whole-time member (WTM) on 23.6.2011. SEBI examined the nature of OFCDs issued by Saharas and came to the conclusion that OFCDs issued would come within the definition of "securities" as defined under Section 2(h) of SCR Act. SEBI also found that those OFCDs issued to the public were in the nature of Hybrid securities, marketable and would not fall outside the genus of debentures. SEBI also found that the OFCDs issued, by definition, design and characteristics intrinsically and essentially, were debentures and the Saharas had designed the OFCDs to invite subscription from the public at large through their agents, private offices and information memorandum. SEBI concluded that OFCDs issued were in fact public issues and the Saharas were bound to comply with Section 73 of the Companies Act, in compliance with the parameters provided by the first proviso to Section 67(3) of the Companies Act. SEBI took the view that OFCDs issued by Saharas should have been listed on a recognized stock exchange and ought to have followed the disclosure requirement and other investors' protection norms.
22. SEBI also held that the Parliament has conferred powers on it under Section 55A(b) of the Companies Act to administer such issues of securities and Saharas were not justified in raising crores and crores of rupees on the premise that that OFCDs issued by them, were by way of private placement. SEBI, therefore, found that the Saharas had contravened the provisions of Sections 56, 73, 117A, 117B and 117C of the Companies Act and also various clauses of DIP Guidelines. SEBI also held that SHICL had not complied with the provisions of Regulations 4(2), 5(1), 5(7), 6, 7, 16(1), 20(1), 25, 26, 36, 37, 46 and 57 of ICDR Regulations. Having found so, SEBI directed Saharas to refund the money collected under the Prospectus dated 13.3.2008 and 6.10.2009 to all such investors who had subscribed to their OFCDs, with interest.
23. Appellants, aggrieved by the above mentioned order of SEBI, filed Appeal Nos. 131 of 2011 and 132 of 2011 before the Tribunal and the Tribunal passed a common order on 18.10.2011. Before the Tribunal, Union of India, represented through the Ministry of Company Affairs, was impleaded. The Tribunal took the view that OFCDs issued were securities within the meaning of Clause (h) of Section 2 of SCR Act, so also under SEBI Act. Tribunal also noticed that RHP issued by SIRECL was registered by the RoC on 18.3.2008, though information memorandum (IM) was issued later in April 2008 in clear violation of Section 60B of the Companies Act. Further, it was also noticed that IM was issued through 10 lac agents and more than 2900 branch offices to more than 30 million persons inviting them to subscribe to the OFCDs which amounted to invitation to public. Tribunal also found fault with the RoC as it had failed to forward the draft RHP to SEBI since it was a public issue and hence violated Circular dated 1.3.1991 issued by the Department of Company Affairs, Government of India.
24. Tribunal also recorded a finding that Saharas, having made a public issue, cannot escape from complying with the requirements of Section 73(1) of the Companies Act on the ground that the companies had not intended to get the OFCDs listed on any stock exchange. Tribunal also examined the scope and ambit of Sections 55A of Companies Act read with Sections 11, 11A and 11B of SEBI Act and took the view that a plain reading of those provisions would indicate that SEBI has jurisdiction over the Saharas since OFCDs issued were in the nature of securities and hence should have been listed on any of the recognized exchanges of India. SEBI also took the view that the explanation to Section 55A has to be read harmoniously, and if so read, clearly spells out the powers of SEBI and the Central Government. Tribunal also considered the scope of Section 28(1)(b) of the SCR Act and held that the exclusion in the said Act is not available to OFCDs issued by the appellants. Tribunal concluded that SEBI has jurisdiction under Section 55A(b) and the Saharas had flouted the mandatory provisions of Section 73(1) of the Companies Act and the consequences provided under Sub-section (2) of Section 73 would, therefore, follow and SEBI had ample powers under Sections 11, 11A and 11B of the SEBI Act to issue directions to refund the amounts to the investors with interest. Aggrieved by the said order, SIRECL filed C.A. No. 9813 of 2011 and SHICL filed C.A. No. 9833 of 2011 before this Court under Section 15Z of the SEBI Act which came up for admission on 28.11.2011 and the direction issued to refund sum of Rs.17,400 crores, on or before 28.11.2011, was extended. This Court also passed the following order: "By the impugned order, the appellants have been asked by SAT to refund a sum of Rs.17,400/- crores approximately on or before 28th November, 2011. We extend that period upto 9th January, 2012. In the meantime, we are directing the appellants to put on affidavit, before the next date of hearing, the following information: (a) Application of the funds, which they have collected from the Depositors; (b) Networth of the Companies which have received these deposits; c) Particulars of assets of the said Companies against which the liability has been created. For that purpose, the appellants will produce the requisite financial statements consisting of the Balance Sheet and Profit and Loss Account of the year ending 31st March, 2011 and the Statement of Account upto 30th November, 2011; (d) The Affidavit will indicate how the said Compnies seek to secure the liabilities which the Companies have incurred and how they will protect the debenture holders; (e) If returns have been filed under Income Tax Act, 1961, the same may be annexed to the Affidavit to be filed."
25. Civil Appeals later came for admission on 9.1.2012 and the interim order granted was extended. As directed, Additional Affidavit with certain documents were filed by both the appellants on 20.6.2012, wherein specific reference was made to the affidavit dated 14.9.2011 filed by Saharas before the SAT, the details of which were given in a chart form, which is as follows:
SIRECL
SHICL
Date of commencement of issue
25.4.2008
Date of commencement of issue
20.11.2009
Total amount collected till April 13, 2011
Rs.19,400.87 Crs
Total amount collected till April 13, 2011
Rs.6,380.50 Crs
Total
Rs.25,781.37 Crs
Less: Premature redemption
Rs.1,744.34 Crs
(11.78 lakh investors)
Less: Premature redemption
Rs.7.30 Crs
(5,306 investors)
Total
Rs.1,751.64
(11.78 Lakh investors)
Balance on August 31, 2011
Rs.17,656.53 Crs
Balance on August 31, 2011
Rs.6,373.20 Crs
Total
Rs.24,029.73 Crs.
Total no. of investors
Total no. of investors
Total till April 13, 2011 (in lakhs)
Balance as on August 31, 2011 (in Lakhs)
Total till April 13, 2011 (in lakhs)
Balance as on August 31, 2011 (in Lakhs)
Abode Bond
70.94
70.65
Income Bond
1.45
1.44
Nirman Bond
25.44
14.12
Multiple Bond
30.46
30.45
Real Estate Bond
136.47
136.3
Housing Bond
43.23
43.19
232.85
221.07
75.14
75.08
Total
307.99
296.15
26. Shri Fali S. Nariman, learned senior counsel appearing for SIRECL formulated several questions of law which, according to the senior counsel, arise out of the order passed by the Tribunal. Learned senior counsel submitted that Section 55A of Companies Act confers no power on SEBI to administer the provisions of Sections 56, 62, 63 and 73 of the Companies Act of an unlisted company or to adjudicate upon the alleged violation of those provisions, that too without framing any regulations under Section 642(4) of the Companies Act. Learned senior counsel also pointed out that Sections 11, 11A and 11B of the SEBI Act empower SEBI to protect the interest of investors but not to administer the provisions of the Companies Act so far as an unlisted public company is concerned, consequently, when exercising powers under SEBI Act and/or SEBI Regulations, SEBI is not empowered to administer the provisions of the Companies Act relating to the issue and transfer of securities and non-payment of dividends, so far as an unlisted public company is concerned.
27. Learned senior counsel also submitted that the powers of SEBI to administer the aforesaid provisions are limited to the listed companies and public companies which intend to get their securities listed on any recognized stock exchange in India and, in any other case, the power of administration of Sections 56, 62, 63 and 73 with respect to OFCDs is vested only with the Central Government and not with SEBI. Reference was also placed on the explanation to Section 55A and submitted that all powers relating to "all other matters" i.e. matters other than those relating to the issue and transfer of securities and non-payment of dividends, including the matter relating to prospectus would be exercised by the Central Government or the RoC and not SEBI.
28. Learned senior counsel also highlighted the conspicuous omission of Section 60B in Section 55A which, according to the senior counsel, indicates that SEBI cannot administer in case of any violation of Section 60B. Even otherwise, learned senior counsel submitted that, as a matter of legislative drafting, Section 60B could not have been intended to be included in the parenthetical clause and, therefore, could not be said to be covered by Section 55A. Learned senior counsel also submitted that even if Section 60B falls in between under Sections 59 to 81, Saharas either through their conduct or action depicted no intention to have their securities listed on any stock exchange in India so as to fall under Section 55A(b) of the Act. Learned senior counsel also referred to Section 60B(9) of the Act and submitted that the same would apply only in the case of listed company.
29. Learned counsel also referred to the Unlisted Public Companies (Preferential Allotment) Rules, 2003 (for short '2003 Rules') and submitted that unlisted public companies, for the first time, could make preferential allotment through private placement pursuant to a special resolution passed under Sub-section (1A) of Section 81 of the Companies Act, if authorized by its Article of Association. Section 60B, it was pointed out, contemplated an unlisted company filing a RHP even though OFCDs were not offered or to be offered to the public. Further, it was also pointed out that, at best, the present case falls under Section 55A(c) and it is amenable only to the jurisdiction of the Central Government and that SEBI has no jurisdiction to administer, inter alia, the provisions of Sections 56, 62, 63 and 73 of the Companies Act, so far as unlisted public companies are concerned.
30. Shri Nariman also submitted that SEBI has committed a serious error in holding that the SIRECL had contravened the provisions of SEBI Act, DIP Guidelines read with ICDR 2009. Learned senior counsel pointed out that DIP Guidelines were expressly repealed by ICDR 2009 and even if the DIP Guidelines apply, the same would not cover the preferential issue of OFCDs by Saharas under 2003 Rules read with Section 81(1A) of the Companies Act. Learned counsel also pointed that ICDR 2009 would apply to the OFCDs issued by SIRECL by private placement and when it comes to regulating preferential allotment by private placement by unlisted public companies, the same is governed by 2003 Rules and only in case of preferential allotment by listed public companies, ICDR 2009 would apply.
31. Shri Nariman also contended that there was no statutory requirement for SIRECL to list OFCDs on any recognized stock exchange under the provisions of 2003 Rules. Further, it is also contended that the above rules do not have any deeming provisions for treating any issue as a public issue on the basis of number of persons to whom offers were made or on the basis of any other criteria. Learned senior counsel also submitted that the proviso of Section 67(3) of the Companies Act, added by the Companies Amendment Act, 2000 (w.e.f. 13.12.2000), was also not attracted to 2003 Rules, hence it was urged that, in view of the statutory rules of 2003, preferential allotment by unlisted public companies by private placement was provided for and permitted without any restriction on numbers as per the proviso to Section 67(3) and without requiring listing of OFCDs on any recognized stock exchange. Shri Nariman also pointed out that it is only from 14.12.2011, the 2003 Rules were amended, whereby the definition of preferential allotment was substituted, without disturbing or amending Rule 2 of 2003 Rules. Learned senior counsel submitted that by the amended definition of Preferential Allotment by the Unlisted Public Companies (Preferential Allotment) Rules, 2011 (for short '2011 Rules'), hybrid instrument stands specifically included. Consequently, the first proviso to Section 67 of the Companies Act was specifically made applicable.
32. Learned senior counsel also contended that after the insertion of the definition of "securities" in Section 2(45AA) as including hybrid and the definition of "hybrid" in Section 2(19A) of the Companies Act, the provisions of Section 67 were not applicable to OFCDs which have been held to be "hybrid". Various bonds issued by Saharas, learned senior counsel submitted, were never shares or debentures but hybrids, a separate and distinct class of securities. Section 67, it was submitted, speaks only of shares and debentures and not hybrids and, therefore, Section 67 would not apply to OFCDs issued by SIRECL.
33. Learned counsel also referred to various terms and conditions of the Abode Bond, Nirmaan Bond and Real Estate Bond and submitted that they are convertible bonds falling with the scope of Section 28(1)(b) of the SCR Act, in view of Section 9(1) and Section 9(2)(m) of that Act and are not listable securities within the meaning of Section 2(h) of the SCR Act and hence there is no question of making applications for listing under Section 73(1) of the Companies Act. Learned senior counsel also submitted that three Registrars of Companies - West Bengal, Kanpur, and Mumbai - had, at different point of time, registered the RHPs at different places over a period of nine years. Registrars of Companies could have refused registration under Section 60(3) of the Companies Act as well, if there was non-compliance of the provisions of the Companies Act. Learned counsel pointed out that having not done so, it is to be presumed that private placement under Section 60B of the Companies Act was permissible and hence no punitive action including refund of the amounts is called for and the order to that effect be declared illegal.
34. Shri Gopal Subramanium, learned senior counsel appearing on behalf of SHICL submitted that any act of compulsion on Saharas to list their shares or debentures on a stock exchange would make serious inroad into their corporate autonomy. Learned senior counsel submits that the concept of autonomy involves the rights of shareholders, their free speech, their decision making and all other factors. To highlight the concept of corporate autonomy, learned senior counsel placed reliance on the Constitution Bench judgment of this Court in Life Insurance Corporation of India v. Escorts Ltd. & Ors. (1986) 1 SCC 264. Learned senior counsel submitted that SEBI's insistence that Saharas ought to have listed their shares or debentures on a recognized stock exchange in accordance with Section 73 of the Companies Act would necessarily expose shareholders and debenture holders to the risks of trading in shares and would also compel unlisted companies to seek financial help from investment bankers.
Learned senior counsel placed reliance on the judgment of this Court in Union of India v. Allied International Products Ltd. & Anr. (1970) 3 SCC 594 and submitted that Section 73(1) was enacted with the object that the subscribers would be ensured the facility of easy convertibility of their holdings when they have subscribed to the shares on the representation in the prospectus that an application for quotation of shares had been or would be made. Learned senior counsel also made reference to the Cohen Committee Report (U.K.) and submitted that the same would bring about the true purport of Section 73, that it is the obligation on the company which has promised the members of the public that their shares would be marketable or capable of being dealt with in the stock exchange. Learned senior counsel made reference to Section 51 of the Companies Act, 1948 (U.K.) and the judgment in In re. Nanwa Gold Mines Ltd. (1955) 1 WLR 1080 and submitted that the object of Section 51 was to protect those persons who had paid money on the faith or the promise that their shares would be listed.
Learned senior counsel pointed out that Sub-section (1) of Section 73 is qualified by the term "intending", which means Section 73(1) deals with companies that want to issue new shares or debentures to be listed, and which have declared to the investors that they intend to have those shares or debentures dealt with on the stock exchange. In such a case, Section 73(1) obliges those companies to make an application to one or more recognized stock exchanges for permission for the shares or debentures to be dealt with on the stock exchange or each such stock exchange, before the issue of a prospectus. Learned senior counsel submitted that the role of Section 73(1) is, therefore, narrow and limited and those companies which do not intend to list their securities on a stock exchange are not covered by this provision.
Learned senior counsel submitted that the expression "to be dealt in on stock exchange" occurring in the heading of Section 73 must be read in the text of that Section, to reach the understanding that it is not merely the invitation of shares or debentures to the public which warrants the application of Section 73, but it is only when such companies intend to have their shares or debentures listed on the stock exchange that the prescription under Section 73 shall apply. Learned senior counsel submitted that the company's freedom to contract under the Constitution as well as the Law of Contracts needs to be safeguarded and that persons who belong to the lower echelons of society, while it is necessary that they must never be duped, ought not be prevented from investing in measures which would add to their savings. Learned senior counsel pointed out that to deprive them of such an opportunity would be a serious infraction.
35. Learned senior counsel referring to Section 64 of the Companies Act submitted that the expression "deemed to be prospectus" indicates that whenever shares or debentures which are allotted can be offered for sale to the public, such a document is deemed to be a prospectus and has legal consequences. Section 73, according to the learned senior counsel, operationalizes the intention of a company which is allotment of shares with a view to sell to the public as contemplated in Section 64 of the Act. So, while Section 64 refers to the documents containing such an offer as a prospectus, Section 73 requires the company to make an application before the issue of the prospectus. Learned senior counsel also submitted that mere filing of prospectus is not reflective of the intention to make a public offer.
The purpose of issue of prospectus is to disclose true and correct statements and it cannot be characterized as an invitation to the public for subscription of shares or debentures. Learned senior counsel also pointed out that the filing of the prospectus or the administration of Section 62 on account of misstatement in a prospectus will be undertaken by the Central Government on account of explanation to Section 55A of the Companies Act. Learned senior counsel submitted that the manner in which a listed public company will offer its shares would be determined under the SEBI Act as well as the SEBI Regulations. Learned senior counsel submitted that Section 60B of the Companies Act, as such, does not presuppose or prescribes an intention to list.
Section 60B enables a prospectus to be filed where a company is not a listed public company. Learned senior counsel pointed out that IM or RHPs can be filed although an offer of shares may be made by way of private placement or to a section of the public or even to the public, but yet without intending it to be listed. Learned senior counsel, therefore, pointed out that the stand of SEBI that where there is an offer of shares or debentures by way of prospectus, it amounts to an offer of shares to the general public and, therefore, to be dealt with on a stock exchange, is completely flawed and that Section 73 cannot be interpreted to impinge upon the corporate autonomy of the company.
36. Shri Subramanium also submitted that Section 67 of the Companies Act does not imply that a company's offer of shares or debentures to fifty or more persons would ipso facto become a 'public issue' or a 'private offer'. Learned senior counsel submitted that in order to determine whether an offer is meant for the public at large or by way of private placement, what is relevant is the intention of the offeror. In other words, the numbers are irrelevant, submits the counsel, it is only the intention to offer to a select or identified group which will make the offer a private placement. Learned senior counsel also submitted that the proviso to sub-section (3) of Section 67 of the Companies Act would be appreciated in that background. Learned senior counsel also submitted that private placement is not authorized by interpretative provision in Section 67(3) but is in fact the will of the company reflected in a Special Resolution under Section 81(1A) of the Companies Act which deals with "preferential allotment". Learned senior counsel submitted that when there is a private placement, irrespective of the number, then the offer of shares need not take place through a prospectus but can even take place through a letter or a memorandum.
37. Learned senior counsel submitted that the Central Government correctly understood the position while framing the 2003 Rules. Learned senior counsel also submitted that SAT has no jurisdiction over unlisted public companies either under Section 55A of the Companies Act or under the SEBI Act. Learned senior counsel referred to the various provisions conferring powers on SEBI under the SEBI Act as well as the limited powers conferred on SEBI under the Companies Act. Learned senior counsel pointed out that SEBI is not concerned with the securities of all the companies, nor is it responsible for overseeing the sources of capital in the country, except that which is in the securities market. Learned senior counsel also pointed out that compulsory listing of scrips is 'unheard of' in any jurisdiction. It was further submitted that it is impossible to conceive that a regulator or State or Parliament could actually intend that there would be a mandatory exposure of business to vicissitudes of fortune being swept by waves in the stock market.
38. Learned senior counsel elaborately referred to the various provisions of the SEBI Act in that context. Learned senior counsel also submitted that the Central Government and SEBI cannot approbate or reprobate regarding their jurisdiction over the unlisted public companies. Learned senior counsel pointed out that SEBI has categorically stated on oath before various Forums that an unlisted public company was not within its jurisdiction if that company did not intend to list their shares on the stock exchange. Later, SEBI has unfairly changed its stand before the other Forums. Learned senior counsel referred to the stand taken by SEBI before the Bombay High Court in Kalpana Bhandari v. Securities and Exchange Board of India (2005) 125 Comp. Cases 804 (Bom.) as well as Delhi High Court judgment in Society for Consumers and Investment v. Union of India and others passed in Writ Petition No. 15467 of 2006. Reference was also made to the judgment of the Kerala High Court in Writ Petition (C) No. 19192 of 2003 [Kunamkulam Paper Mills Ltd. & Ors. V. Securities and Exchange Board of India & Others] learned senior counsel pointed out that SEBI has taken contradictory stand in various forums rather than properly appreciating and applying the provisions of SEBI Act and the Companies Act.
39. Learned senior counsel also submitted that OFCDs issued by the Saharas are outside the purview of the SCR Act as well as the SEBI Act. Learned senior counsel referred to Section 2(19A) of the Companies Act defining the term "hybrid" and also the definition of "securities" under Section 2(45AA) and submitted that the legislative intent was to treat "hybrids" differently from either shares or debentures and thus exclude from the purview of Section 67, the offer of hybrids. Learned senior counsel submitted that OFCDs issued by Saharas which are convertible debentures would fall within the meaning of "any convertible bond" under Section 28(1)(b) of SCR Act and, therefore, would stand excluded from the purview of SCR Act.
40. Learned senior counsel also submitted that SEBI has exceeded its jurisdiction by acting contrary to and beyond this Court's order dated 12.5.2011 passed in SLP(C) No.11023 of 2011 and SLP(C) No.13024 of 2011 and has conducted itself in a manner prejudicial to Saharas. Learned counsel pointed out that the conduct of the regulator in the manner in which proceedings have been conducted raises serious doubts about SEBI functions. Learned senior counsel pointed out that, apart from asserting jurisdiction in an erroneous manner, SEBI has no evidence of credible nature to show that Saharas had attempted to deceive or collect money from fictitious sources. Further, it was pointed out that there was no complaint from any investor and it originated on a complaint by a person who has no interest in Saharas. Learned senior counsel also submitted that SAT's direction of refund, in exercise of its powers under Section 73(2) of the Companies Act, is erroneous. Learned senior counsel, therefore, submitted that such a direction to refund the amount with interest is bad in law and liable to be quashed.
41. Shri Arvind P. Dattar, learned senior counsel appearing on behalf of SEBI, submitted that SEBI as well as SAT were fully justified in holding that SEBI has jurisdiction to administer the provisions contained under Section 55A, so far as they relate to the issue and transfer of securities by Saharas. Learned senior counsel pointed out that Saharas had paid up share capital of just Rs.10 lakhs and virtually no assets and the companies had collected about Rs. 27,000 crores from about 3 crore subscribers, through unsecured OFCDs. Learned senior counsel pointed out that Sections 55A, proviso to Section 67(3), Section 73 and other related provisions clearly bring out the intention of the Parliament, i.e. after 13.12.2000, even if an unlisted public company makes an offer of shares or debentures to fifty or more persons, it was mandatory to follow all the statutory provisions that would culminate in the listing of those securities. Learned senior counsel pointed out that once the number reaches fifty, proviso to Section 67(3) applies and it is an issue to the public, attracting Section 73(1) and an application for listing becomes mandatory and, thereafter the jurisdiction vests with SEBI.
42. Learned senior counsel elaborately argued on the structure of Section 55A and the purpose and object of the parenthetical clause and the brackets employed in the sub-section. Learned senior counsel referred to the word "including" in Section 55A and submitted that the word has been used to emphasize and to make it abundantly clear that Sections 68A, 77A and 80A will be administered by SEBI even though they do not primarily deal with the issue and transfer of securities and non- payment of dividend. Learned senior counsel pointed out that if Section 60B is excluded from the main part of Section 55A, it will stand excluded for listed companies as well which is a consequence never envisaged or intended by the Legislature.
Learned senior counsel also submitted on a reference to Sections 59 to 81 that Parliament intended to include all sections in that range. Learned senior counsel pointed out that Section 55A also applies to companies which "intend to" get their securities listed and that on a combined reading of the proviso to Section 67(3) and Section 73(1), since Saharas had made an offer of OFCDs to more than forty nine persons, the requirement to make application for listing became mandatory and SEBI has the necessary jurisdiction even though Saharas had not got their securities listed on a stock exchange. Learned senior counsel also stated that, the plea, that Saharas never wanted or intended to list their securities, hence escaped from the rigor of Sections 55A, 60B, 73 etc. of the Companies Act, cannot be sustained. Learned senior counsel submitted that Saharas should be judged by what they did, not what they intended. Reference was placed on a Privy Counsel judgment in Young v. Bristol Aeroplane Company Ltd. [1945 PC 163 (HL)]. Learned senior counsel also made elaborate arguments on the explanation to Section 55A as well.
43. Shri Dattar also submitted that DIP Guidelines have statutory force since they are made specifically under the powers granted to SEBI under Section 11 of the SEBI Act. Learned senior counsel pointed out that DIP Guidelines were implemented by SEBI with regard to all listed companies and unlisted companies which made a public offer, until it was replaced by ICDR 2009. Learned senior counsel submitted that the issue of OFCDs was in contradiction of Section 73(1) and the applicable DIP Guidelines/ICDR 2009, consequently, SEBI was obliged to pass orders for refunding the amount that was collected by Saharas.
44. Learned senior counsel submitted that under Section 11(1) of the SEBI Act, SEBI is duty bound to protect the interest of investors in securities either listed or which are required by law to be listed, and under Section 11B, SEBI has the power to issue appropriate directions, in the interests of investors in securities and the securities market, to any person who is associated with securities market. Learned senior counsel pointed out that 2003 Rules are not applicable after 2003, to any offer or shares or debentures to more than forty nine persons and the rules were amended in the year 2011 to make explicit what was already implicit, but the statutory mandate in this regard was made clear w.e.f. 13.12.2000, and that the 2003 Rules will be subject to the statutory provisions of the proviso to Sections 67(3) and 73(1).
45. Learned senior counsel also submitted that Saharas' basic assumption that they are covered by 2003 Rules is erroneous. Learned counsel pointed out that a public issue would not become a preferential allotment by merely labeling it as such and the facts on record show that the issue could not be termed as a preferential allotment. Preferential allotment, learned counsel submits, is made by passing a special resolution under Section 81(1A) and is an exception to the rule of rights issue that requires new shares or debentures to be offered to the existing members/holders on a pro rata basis. Learned senior counsel pointed out that once the offer is made to more than forty nine persons, then apart from compliance with Section 81(1A), other requirements regarding public issues have to be complied with.
46. Shri Dattar further submitted that after insertion of the proviso to Section 67(3) in December, 2000, private placement as allowed under Section 67(3) was restricted up to forty nine persons only and 2003 Rules were framed keeping this statutory provision in mind and were never intended for private placement/preferential issue to more than forty nine persons and the amendments to these rules made in the year 2011 merely made the said legal position under the 2003 Rules, explicit. Shri Dattar also submitted that OFCDs are debentures by name and the nature and the definition of 'debenture' as given under Section 2(12) of the Companies Act includes any other securities. Learned senior counsel submitted that the securities as defined in Section 2(45AA) of the Companies Act includes hybrids and, therefore, hybrids fall in the definition of debentures and are amenable to the provisions of Sections 67 and 73 of the Companies Act.
47. Shri Dattar also submitted that Section 28(1)(b) of SCR Act does not apply to convertible debentures and the plea raised by Saharas is also untenable because the interpretation placed on Section 28(1)(b) would be in contradiction to the mandatory provisions of Section 73(1) and the proviso to Section 67(3) of the Companies Act. It was next submitted that if the convertible debentures are excluded from SCR Act, it would lead to a paradoxical situation because these debentures are required to be listed under Section 73(1) but they cannot be listed in view of Section 28(1)(b). Learned senior counsel submitted that SEBI has rightly claimed jurisdiction to administer the OFCDs, as it was obligatory on the part of Saharas to comply with the statutory requirements of the Companies Act, SEBI Act and SCR Act. Saharas, learned senior counsel submits, had no right to collect Rs.27,000 crores from three crore investors without complying with any regulatory provisions, except filing of RHP with RoCs at Kanpur and Mumbai and that SEBI was justified in directing refunding of amount with 15% interest.
48. Shri Harin P. Rawal, Additional Solicitor General appearing on behalf of Union of India placed detailed written submissions, supporting the stand taken by SEBI. Powers conferred on SEBI under the SEBI Act as well as the Companies Act have been elaborately dealt with in the written submissions filed by him, pointing out that there is no conflict of jurisdiction of SEBI or RoC/MCA while enforcing the provisions of SEBI Act and the Companies Act. It was pointed out that there is no overlap, much less any repugnancy or conflict between provisions of SEBI Act and those of Section 55A of the Companies Act and the Sections enumerated there under.
It was pointed out that Sections 11A and 11B of SEBI Act should be read as provisions additional to Section 55A. Reference was also made to Section 32 of the SEBI Act and it was submitted that the provisions of SEBI Act are "in addition to" and "not in derogation of" the provisions of any other law, unless the provisions of SEBI Act are wholly inconsistent with the Companies Act, the provisions of both the SEBI Act and the Companies Act should be harmonized and both sets of provisions given operation. Further, it was pointed out that Sections 11, 11A, 11B of SEBI Act are special law and Section 55A and the enumerated sections of the Companies Act are general law.
It was further pointed out that Sections 11(2A), 11(4) and 11A of SEBI Act were enacted (or amended) in 2002 and those provisions did not limit SEBI's powers to only regulating listed companies. Moreover, those provisions were predicated upon the continued operation of Sections 11 and 11B even to unlisted companies and, consequently, it cannot be said that the Parliament intended Section 55A of the Companies Act to impliedly repeal the powers of SEBI in relation to unlisted companies under Sections 11 and 11B of SEBI Act. Supreme Court as a court of appeal
49. Saharas have filed these appeals, under Section 15Z of the SEBI Act, raising various questions of law which they claim arise out of the order of the Tribunal. Section 15Z reads as follow: Appeal to Supreme Court: "15Z. Any person aggrieved by any decision or order of the Securities Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order of the Securities Appellate Tribunal to him on any question of law arising out of such order: Provided that the Supreme Court may, if it is satisfied that the applicant was prevented by sufficient cause from filing