BEFORE THE
SECURITIES APPELLATE TRIBUNAL
MUMBAI
Date of Decision
: 28.02.2019
Misc. Application No. 91 of 2019
And
Appeal No. 73 of 2019
Mr. Mahendra Girdharilal
15, Linking Road,
Opp. Arya Samaj Mandir,
Santacruz West,
Mumbai – 400 052.

…. Appellant
Versus
1. National Stock Exchange of India Limited
Exchange Plaza, Plot No. C/1, G-Block,
Bandra-Kurla Complex, Bandra East,
Mumbai – 400 051.
2. Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G-Block,
Bandra-Kurla Complex, Bandra (East),
Mumbai – 400 051.
3. T. Stanes And Company Limited
8/23-24, Race Course Road,
Coimbatore – 641 018.

…Respondents
Mr. Rakesh Puri, Advocate for the Appellant.
Ms. Shreya Anuwal, Advocate with Ms. Pranjal Krishna,
Advocate i/b Manilal Kher Ambalal & Co. for Respondent
No. 1.
Mr. Santanu Mitra, Advocate i/b Desai & Diwanji for the
Respondent No. 2.
None for Respondent No. 3.

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

The requirement of filing a certified copy of the
impugned order is waived.
Misc. Application No. 91 of 2019:2.

There is a delay of 5 days in filing the appeal. Cause
shown is sufficient. The delay in filing the appeal is
condoned. The application is allowed.
Appeal No. 73 of 2019:3.

The appellant being aggrieved by the order dated July 2,
2018 passed by the National Stock Exchange of India Limited
(‘NSE’ for short), respondent no. 2 allowing T. Stanes And
Company Limited, respondent no. 3 to be removed from the
Dissemination Board has filed the present appeal praying for
the quashing of the order dated July 2, 2018 passed by the
NSE and further praying that a direction should be issued to
bring back the Company, namely, respondent no. 3 on the
Dissemination Board of NSE.
4.

The facts leading to the filing of the present appeal is
that the appellant is a shareholder of respondent no. 3
3
Company. The scrips of respondent no. 3 Company was listed
in the Madras Stock Exchange. The said Stock Exchange
surrendered its recognition due to non-fulfillment of the
criteria stipulated by Securities and Exchange Board of India
(‘SEBI’ for short). As a result, the Company’s share was
placed in the Dissemination Board of the NSE with effect
from December 1, 2014. A circular in this regard was issued
by the Company dated December 2, 2014 to its shareholders
intimating that they can avail the limited facility of buying
and selling their shares on the Dissemination Board of the
NSE.

5.

SEBI issued a circular dated May 30, 2012 issuing
guidelines for exit of De-recognized / Non-operational Stock
Exchanges. Subsequently, SEBI issued a circular dated May
22, 2014 directing the Stock Exchanges to address the issues
faced by the Companies exclusively listed in the Nonoperational Stock Exchanges. Thereafter SEBI issued a
circular dated April 17, 2015 allowing time to exclusively
listed Companies on Dissemination Board to obtain listing
upon compliance with the listing requirements of the nationwide Stock Exchanges. Based on the circular dated October
10, 2016 an offer was made by respondent no. 3 Company to
its shareholders to buy-back their shares by a letter of offer
4
dated April 29, 2016. The buy-back offer was made with the
intention to provide an exit opportunity to the existing
shareholders at a fair price. The buy-back offers were
received and the Company made payments of ` 1,92,41,602/which is reflected in the annual report of the Company for the
financial year 2016-17. Based on the said buy-back offers the
NSE issued the order dated July 2, 2018 removing the
Company, respondent no. 3 from the Dissemination Board in
terms of the SEBI circular dated October 10, 2016 which
provided that where the exclusively listed Companies failed
to get listed on the nation-wide Stock Exchanges it will
provide an exit mechanism to its investors.

6.

The appellant did not accept the letter of offer and chose
not to sell the shares back to the Company. The buy-back
offers were made in the year 2016-17 and after two years the
appellant has now filed the present appeal contending that the
buy-back offer made by the Company was wholly illegal in as
much as the circular dated April 17, 2015 and October 10,
2016 issued by SEBI only permitted the promoters to buyback the shares and did not allow the Company to buy-back
the shares. It was contended that the said exercise made by
respondent no. 3 Company was wholly illegal in gross
violation of SEBI circulars and therefore the same should be
5
set aside and a direction should be issued directing NSE to
bring back the respondent no. 3 Company on the
Dissemination Board.

7.

The contention of the learned counsel for the appellant
is patently misconceived as we find that SEBI issued a
circular dated July 25, 2017 permitting the Company to buyback the shares so as to provide an exit to the public
shareholders. In view of the said circular we do not find any
illegality being made in the buy-back of the shares by the
Company. In any case, we do not find any reason to disturb
the arrangement made two years ago at this belated stage.
8.

In the light of the aforesaid, we do not see any illegality
in the order dated July 2, 2018 removing respondent no. 3
Company from the Dissemination Board.

9.

The appeal fails and is dismissed. In the circumstances
of the case, there shall be no order as to costs.

Sd/Justice Tarun Agarwala
Presiding Officer
Sd/Dr. C.K.G. Nair
Member
28.02.2019
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