Delhi High Court Dismisses Plea Against SEBI NOC for NSE IPO, Says Remedy Lies Before SAT

The Delhi High Court has recently dismissed a plea challenging the No Objection Certificate granted by SEBI to the National Stock Exchange in relation to its proposed Initial Public Offering.

Justice Jasmeet Singh observed that the petition appeared to have been filed only to stall the IPO. “I am of the view that the present petition seems to have been filed only to interdict the IPO of respondent No. 2,” the Court held.

The plea was filed by retail investor K.C. Aggarwal, who stated that he had written emails to SEBI raising concerns regarding alleged misuse of SEBI circulars by stock exchanges in relation to corporate action adjustment.

He had requested that permission not be granted for NSE's IPO and also lodged a grievance on the CPGRAMS portal. The order records that the emails were not adverted to.

Aggarwal contended that SEBI had abdicated its statutory duties under Sections 11, 11A and 11C of the SEBI Act, 1992 (which relate to SEBI's duty to protect investors and regulate the securities market, its power to issue directions in the interest of investors and the market, and its power to order investigations), and failed to consider unlawful debits and impermissible transactions allegedly carried out on NSE's platform. He stated that he was aggrieved by SEBI's regulatory inaction as well as the grant of the NOC.

The Court held that if Aggarwal was aggrieved by any inaction on the part of SEBI, the efficacious remedy lay before the Securities Appellate Tribunal under Section 15T of the SEBI Act and Section 23L of the Securities Contracts (Regulation) Act, 1956.

The Court said that anyone aggrieved by SEBI's decision to grant the NOC is free to approach the Securities Appellate Tribunal for relief.

It also held that it did not have the territorial jurisdiction to hear the matter, since both SEBI and NSE are based in Mumbai and the NOC was issued there.

For these reasons, the Court dismissed the petition at the threshold, without going into the merits or demerits of the case.

For Petitioner: In Person

For Respondents: Senior Advocate Pratap Venugopal, Neeraj Malhotra, Advocates Abhishek Baid, Mohit Kumar Bafna, Praneet Das, Ravinder Kumar, Sonali Jaitle Bakhshi, Jaiyesh Bakhshi, Ravi Tyagi, Mayank Mishra, Gaurav Mishra, Manmilan Sidhu, Daman Popli, Sudhiksha Saini, Sahil Dhawan, Abhijay Basu, Ishan Agrawal, Gandharv Garg, Anshit Aggarwal and Nimish Kumar