BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Date of Decision: 21.2.2019
Misc. Application No.17 of 2019
And
Appeal No.12 of 2019
Shobhendra Mansukhlal Daruwala
73 Nav Dariya Mahal,
80B, Nepean Sea Road,
Mumbai – 400 006.

….. Appellant
Versus
1. Securities & Exchange Board of India
SEBI Bhawan, Bandra-Kurla Complex,
Mumbai – 400 051.
2. Bombay Stock Exchange
Phiroze Jeejeebhoy Towers,
Dalal Street, Mumbai – 400051.
3. Riddhi Siddhi Gluco Boild Limited
10, Abhishree Corporate Park,
Nr. Swagat Bungalow, BRTS Bus Stop,
Ambli-Bopal Road, Ahmedabad- 380058.
4. Ganpatraj Lalchand Chowdhary
10, Abhishree Corporate Park,
Nr. Swagat Bungalow, BRTS Bus Stop,
Ambli-Bopal Road, Ahmedabad- 380058.

…… Respondents
Mr. Pankaj Uttradhi, Advocate with Ms. Sabeena Mahadik and Ms.
Yashasvini Chandra, Advocate i/b. Visesha Law Services for the
Appellant.

Mr. Pradeep Sancheti, Senior Advocate with Mr. Mihir Mody and Mr.
Nishant Upadhyay, Advocates i/b. K. Ashar & Co. for the Respondent
No.1.

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Mr. P.N. Modi, Senior Advocate with Mr. Nihar Mody, Mr. Tomu
Francis and Mr. Arka Saha, Advocates i/b. Khaitan & Co. for the
Respondent no.2.
Mr. Somasekhar Sundaresan, Advocate with Ms. Yugandhara and Mr.
Samit Shukla, Ms. Viraj Gami and Ms. Raveena Dhawan, Advocates
i/b. DSK Legal for the Respondent Nos.3 & 4.
With
Appeal No.48 of 2019
Riddhi Siddhi Gluco Biols Limited
10, Abhishree Corporate Park,
Near Swagat Bunglows, BRTS Bus Stand,
Ambali Bopal Road, Ahmedabad
Gujarat – 380058.

….. Appellant
Versus
BSE Limited
Floor 25, P.J. Towers,
Dalal Street, Mumbai – 400001.

…… Respondent
Mr. Somasekhar Sundaresan, Advocate with Ms. Yugandhra, Mr.
Samit Shukla, Ms. Viraj Gami and Ms. Raveena Dhawan, Advocate
i/b. DSK Legal for the Appellant.

Mr. P.N. Modi, Senior Advocate with Mr. Nihar Mody, Mr. Tomu
Francis and Mr. Arka Saha, Advocates i/b. Khaitan & Co. for the
Respondent.
With
Appeal No.49 of 2019
Mr. Ganpatraj L. Chowdhary
Rajul Villa, Riddhi Siddhi,
Opp. Abhishree Corporate Park,
Ambali-Bopal Road, Ambali,
Ahmedabad- 380058.

….. Appellant
Versus
BSE Limited
Floor 25, P. J. Towers,
Dalal Street, Mumbai – 400001.

…… Respondent
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Mr. Somasekhar Sundaresan, Advocate with Ms. Yugandhra, Mr.
Samit Shukla, Ms. Viraj Gami and Ms. Raveena Dhawan, Advocate
i/b. DSK Legal for the Appellant.

Mr. Tomu Francis, Advocate with Mr. Arka Saha, Advocates i/b.
Khaitan & Co. for the Respondent.

CORAM: Justice Tarun Agarwala, Presiding Officer
Dr. C.K.G. Nair, Member
Per : Justice Tarun Agarwala (Oral)
1.

Riddhi Siddhi Gluco Boild Limited, Respondent no.3 a listed
company, received a letter dated 7.12.2017 from one Ganpatraj
Lalchand Chowdhary, Respondent no.4 expressing his intention to
provide an exit opportunity to all the public shareholders to voluntarily
de-list equity share capital held by the public shareholders in
accordance with the Securities and Exchange Board of India (Delisting
of Equity Shares) Regulations, 2009 (hereinafter referred to as
“Delisting Regulations”). The Board of Directors in its meeting held
on 12th December, 2017 gave its consent to the delisting offer subject
to the approval by the shareholders. Thereafter, a special resolution
was passed for delisting of the equity shareholders and thereafter BSE
Limited (hereinafter referred to as “BSE”) was notified on 2.2.2018.
BSE in turn approved in-principle for delisting the equity shares of the
company on 20th February, 2018, based on which a public
announcement was made on 22nd February, 2018. The offer letters
was dispatched and the bidding process opened on 6th March, 2018
and closed on 12th March, 2018.

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2.

It transpires that the appellant made a complaint on the SEBI
Scores Portal with regard to the irregularities in the delisting process.
Other complaints were also received based on which SEBI issued a
communication dated 19th March, 2018 directing BSE to keep the
delisting process on hold till further directions, based on which BSE
issued an order dated 21st March, 2018 intimating that the delisting
offer by Respondent no.4 has been kept on hold.

SEBI vide
communication dated 21st August, 2018 advised BSE to take
appropriate action at its end since it was the competent authority to
approve the delisting by the companies. The Independent Oversight
Committee for Listing Function of BSE after considering all aspects of
the
matter
found
that
the
company
had
made
incorrect
submission/declarations for seeking BSE’s in-principle approval for
delisting of the shares and consequently the in-principle approval
granted by BSE vide letter dated 20th February, 2018 for voluntary
delisting of equity shares of the company was withdrawn.

BSE
accordingly directed that the shares/funds should be returned back to
the shareholders/promoters respectively immediately upon expiry of
seven working days from the date of receipt of the order by the
company.
3.

The appellant who is a shareholder filed the present Appeal
No.12 of 2019 contending that the company and its promoters have
not only violated the provisions of the Delisting Regulations but have
also indulged in fraudulent acts in violation of Securities and
Exchange Board of India (Prohibition of Fraudulent and Unfair Trade
Practices relating to Securities Market) Regulations, 2003 and that the
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company and its promoters are liable for imposition of penalty. It was
thus urged that the direction of BSE to refund the amount should be
stopped so that the said amount could be utilized for payment of
penalty, if any.
4.

Respondent nos. 3 and 4 namely the company and Ganpatraj
Lalchand Chowdhary have also filed Appeal nos.48 of 2019 and 49 of
2019 praying for quashing of the order dated 26th December, 2018
passed by BSE. By the time the appeal was filed BSE intimated the
Tribunal that pursuant to its order of 26th December, 2018 the shares
have been returned to the shareholders and, therefore, the appeal to
that extent has become infructuous.
5.

SEBI also filed a reply indicating that pursuant to the complaint
filed by the appellant an investigating authority under Section 11C has
been appointed to investigate the trading activities of various entities
in the scrip of the company and that currently investigation in respect
of the shares are continuing and is in progress.
6.

In the light of this assertion made by SEBI, learned counsel for
the appellant in Appeal no.12 of 2019 contended that his appeal could
be disposed of with a direction to the investigating authority to
complete the investigation and that till such time final orders are not
passed the amount kept in the escrow account should not be refunded
to Respondent nos.3 and 4 i.e. to the appellants in Appeal nos.48 and
49 of 2019. On the other hand, Respondent nos.3 and 4 contended that
since the shares have already been returned no useful purpose would
be served in pursuing their appeals, namely, Appeals No.48 and 49 of
2019. It was further submitted that retention of amount to the escrow
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amount would cause irreparable loss and harm which in any case
would be unjustified under the Regulations. It was urged that since
the delisting process have not been approved it was obligatory upon
the respondents to refund the amount.
7.

Considering the aforesaid, we find that an investigation has
been initiated which is in progress. The irregularities alleged are being
investigated. No glaring illegality has been pointed out nor there is
anything to indicate that the Respondent nos. 3 and 4 would disappear
or their assets would dissipate.

In our opinion attachment before
judgement can only be exercised in exceptional cases and nothing has
been pointed out to show that the present case is an exceptional one.
8.

In the light of the aforesaid, all the three appeals are disposed of
with a direction that SEBI should complete the investigation
expeditiously preferably within a period of six months from today.
The amount deposited in the escrow account should be refunded to the
promoters.

Interim order passed in Appeal no.12 of 2019 stands
vacated. Misc. Application is also disposed off.

Sd/-
Justice Tarun Agarwala
Presiding Officer
Sd/Dr. C. K. G. Nair
Member
21.2.2019
Prepared and compared by
RHN