In the matter of

G. Sagarmal Bihani                                                Appellant

Vs.

Bombay Stock Exchange                                        Respondent no.1
Securities and Exchange Board of India              Respondent no.2
 
 

APPEARANCE

Shri S. S. Rai
Advocate

Shri Girdhari S. Bihani
Authorised Representative                                 For Appellant

Shri Sagar Divekar
Advocate
I/b. Wadia Ghandy & Company                         For Respondent no.1

Shri S.V. Krishna Mohan
Division Chief, SEBI

Shri Vijayakrishnan
Legal Officer, SEBI                                             For Respondent no.2
 
 

In the present appeal the Appellant has challenged the order dated 19^th June, 1999 made by the Chairman, Securities and Exchange Board of India, whereby the Appellant's claim for Rs. 3, 96, 400 relating to transactions in the shares of Adeshwar Cotton Industries Ltd., was rejected.
 

The background leading to the issuance of the impugned order, as could be seen from the facts available from the pleadings, is as follows. On receipt of several complaints about market manipulation in the share prices of Adeshwar Cotton Industries Ltd (the company), Respondent no.2 ordered an investigation into the Circumstances leading to the unusual and abnormal fluctuations in the company's share price, which was found to have gone up from Rs. 35 to Rs. 220 during August 2, 1995 to September 18, 1995. Investigation revealed price rigging as the reason for such abnormal price movements. However, as an investor protection measure, Respondent 2, on receiving information about the unusual fluctuations in the price and volume of the shares of the said company, directed the stock exchange to freeze the proceeds which were received by the exchange from auctions/close out of the transactions and withhold the proceeds as an interim measure, pending the investigation. On completion of the investigation and in the light of the finding that the market was manipulated by the interested parties to their advantage, Respondent 2 decided that the difference between the close out and the standard transactions rate should not be given to the buyers but the same be impounded and credited to the Investors Protection Fund of the exchange. However, those persons aggrieved by the said decision were given opportunity to represent to the Respondent providing a fair opportunity to explain their view point, so as to enable the Respondent to reconsider the cases to avoid hardship to the genuine buyers. The Appellant claiming to be aggrieved by the said decision of the Respondent availed of the opportunity and represented. After considering the representation, Respondent 2 passed an order on 19.6.1999, where in the claim of the Appellant was rejected. According to the Appellant even though the order was made on 19.6.1999, the same was communicated to it vide letter dated 16.10.2000 which reached the Appellant on 18.10.2000 and as a result the appeal could not be filed early. The present appeal was filed on 15.12.2000 with a prayer to condone the delay involved in filing the appeal.
 

On receipt of the appeal in the Registry of the Tribunal on 15.12.2000, a copy of the same was forwarded to both the Respondents. They have already filed replies in the matter. The appeal was, therefore, listed for disposal on 2.3.2001. As the Counsel for the Appellant sought an adjournment on the said date, the matter was adjourned to 20.3.2001. However, on 19.3.2001, the Appellant filed an application seeking Tribunal's direction to the Respondents to provide inspection of certain documents mentioned therein to enable it to file a rejoinder.
 

When the appeal was taken up on 20.3.2001, Shri S.S. Rai, learned Counsel appearing for the Appellant referred to his application dated 19.3.2001 and pressed for an order. At that juncture the Tribunal drew the attention of the learned Counsel to item 3 of the appeal, wherein the Appellant had "declared that the matter of appeal falls within the jurisdiction of this Tribunal". His attention was also drawn to the submission made by Respondent 2 in para 3 of its reply wherein it has been stated that the Tribunal has no jurisdiction to decide the appeal, as the impugned order relates a date prior to the notification of Securities Laws (Second Amendment) Act, 1999.
 

Since the very authority of the Tribunal to decide the appeal has been challenged, it was felt that the jurisdictional issue need be settled first before proceeding with the merits of the appeal. Therefore, the learned counsel was requested to address the issue first. From Shri Rai's submission, it is clear that the Appellant had not considered the provisions of section 20 of the SEBI Act, but focussed on section 15W of the Act relating to the applicability of the provisions of the Limitation Act, 1963 to the appeal.
 

I have taken into consideration the submissions of the parties on the issue of jurisdiction.
 

Section 20 (1) of the Securities and Exchange Board of India Act, 1992 clearly states that "any person aggrieved by an order of the Board made before the commencement of the Securities Laws (Second Amendment) Act, 1999, under this Act, or the rules or regulations made thereunder may prefer an appeal to the Central Government within such time as may be prescribed "(emphasis supplied). It is on record that the Securities Laws (Second Amendment) Act, 1999 was brought into force with effect from16.12.1999. The impugned order is dated 19.6.1999 i.e. before the Act was brought into force. It is clear from the wording of section 20 that the jurisdiction of the Tribunal to decide the appeal against the Board's orders is relatable to the date of the order and not to the date of receipt of the order as stated by the learned Counsel. Since the order relates to a date earlier to the commencement of the Securities Laws (Second Amendment) Act, 1999 this Tribunal has no jurisdiction and cannot decide the same. Appropriate appellate forum in the instant case is Central Government.
 

Learned Counsel further submitted that even if this Tribunal has no jurisdiction to decide the Appeal, it can still, in the interest of justice direct the Respondents to provide inspection of records sought for by the Appellant in the application dated 19.3.2001 so as to enable it to prepare its appeal to be filed before the Central Government. To me this submission appears very strange. Having held that the Tribunal has no jurisdiction to decide the appeal itself, it cannot direct the Respondents in the appeal to provide inspection of the records to the Appellant. Such a direction would be without authority.
 

Shri Rai submitted that in case the Tribunal has no jurisdiction to decide the appeal, the appeal fee paid by the Appellant be returned to the Appellant. As stated above, the appeal was processed and numbered on the basis of the declaration made by the Appellant that the matter of appeal falls within the jurisdiction of the Tribunal. In the light of such an affirmative statement, it was not possible for the Tribunal to decide the question of jurisdiction without hearing the parties. The Respondents have already filed their replies. The pleadings have been closed. The question of jurisdiction has been heard and decided. Having travelled this far, I do not see any justification to return the filing fee at this point of time. Request rejected.
 

It is made clear that the Tribunal has not decided the appeal for want of jurisdiction and the Appellant is at liberty to seek appellate remedy before the appropriate forum, if it so desires, in accordance with the provisions of law.
 

The appeal stands disposed of accordingly.