Delhi High Court rejects plea against SEBI nod to NSE IPO

The Delhi High Court recently dismissed a plea challenging the regulatory approval granted to the long-pending initial public offering (IPO) of the National Stock Exchange (NSE). 

In an order passed on February 16, Justice Jasmeet Singh rejected a writ petition filed by one KC Aggarwal against the Securities and Exchange Board of India (SEBI) and NSE. 

The Court said that both SEBI and NSE are in Mumbai, the no-objection for the IPO has been granted in Mumbai and therefore, a petition against them is not maintainable in Delhi. 

If Aggarwal is aggrieved by any inaction by SEBI, he can approach the Securities Appellate Tribunal (SAT), the Court added.

“If the petitioner is aggrieved by any inaction on the part of respondent No 1 [SEBI], the efficacious remedy is to the Securities Appellate Tribunal under Section 15T of SEBI Act, 1992 and Section 23L of Securities Contract (Regulation) Act, 1956. Thus, any person being aggrieved by the NOC granted by respondent No. 1 is entitled to approach the Securities Appellate Tribunal. Additionally, the respondents Nos. 1 and 2  [SEBI and NSE] are both at Mumbai, the NOC has been granted in Mumbai and hence the petition in this Court shall not lie. Thus, this Court is also devoid of territorial jurisdiction to entertain and try the petition,” the Court ruled. 

Aggarwal had approached the High Court seeking directions to restrain SEBI from giving effect to any IPO approval granted to NSE and requested a probe into the alleged misuse of corporate action adjustment mechanisms.

Aggarwal argued that SEBI had failed to discharge its statutory duties under Sections 11, 11A and 11C of the SEBI Act, 1992 and had not adequately examined alleged unlawful debits and transactions carried out on NSE’s platform. He also sought disclosure of the regulatory examination undertaken before granting a No Objection Certificate (NOC) for the exchange’s IPO.

Senior Advocate Pratap Venugopal along with advocates Abhishek Baid, Mohit Kumar Bafna, Praneet Das and Ravinder Kumar appeared for SEBI. 

Senior Advocate Neeraj Malhotra with advocates 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 represented NSE. 

[Read Order]