In the matter of:

Goldstone Teleservices Ltd.                                    Appellant

Vs.

The National Stock Exchange of India Ltd.        Respondent No.1
&
Securities & Exchange Board of India                  Respondent No.2
 

APPEARANCE: -

Shri V. S. Raju
Advocate

Shri J. A. Rao
Director, GTL                                                           for Appellant

Shri R. M. Bathula
Assistant Manager, NSE

Shri T. R. Biju
Assistant Manager, NSE                                       for Respondent No.1

Shri Santosh Shukla
Asst. Legal Adviser, SEBI                                    for Respondent No. 2
 

This is an appeal under section 22 A of the Securities Contracts (Regulation) Act, 1956 directed against the 1^st Respondent�s decision dated 10.7.2001 refusing listing of the Appellant�s equity shares on the exchange. The Appellant had sought permission vide letter dated 13.3.2001 for listing its 1, 08, 38, 400 equity shares allotted on 22.5.2001 consequential to the scheme of arrangement entered into between the Appellant and GoldStone Technologies Ltd.

The present Appeal was filed belatedly. The Appellant has filed Application No. 31/2001 seeking condonation of the delay of 121 days involved in filing the appeal. Shri V. S. Raju, learned Counsel, appearing for the Appellant explained the circumstances leading to the delayed filing of the appeal and submitted that the delay was not due to any laxity on the part of the Appellant. According to him the Appellant was hopefully expecting permission from the 1^st Respondent for listing, in the light of the further clarifications/explanations given by the Appellant and further that the Appellant was actively pursuing the matter with the 1^st Respondent. He referred to the correspondence and several remainders issued to the said Respondent in this regard. The reason put forth by the Appellant being convincing, the delay is condoned, and the appeal is taken on record.

Shri Raju explained in detail the back ground of the appeal and in particular the requirements of the scheme of arrangement between the Appellant and Goldstone Technologies Ltd and the order of the Honourable High Court of Andhra Pradesh approving the scheme. He submitted that consequent on the confirmation of the scheme of arrangement by the Hon�ble High Court, the Appellant pursuant to the decision taken in the Board meeting on 22.5.2001 allotted 1, 08, 38,400 equity shares of Rs. 4/- each to all the shareholders of M/s. Goldstone Technologies Limited, that soon after the Board meeting the Appellant informed the Stock Exchanges about the allotment of shares in the ratio as proposed in the scheme of arrangement and also the fact of giving credit to the Electronic Accounts of the individual shareholders for the demat account, that the physical share certificates were dispatched to those shareholders not having electronic accounts.

Learned Counsel further submitted that the Appellant had applied to all the Stock Exchanges wherever the existing shares of Goldstone Technologies Limited are listed, seeking permission for listing of the shares allotted on 22.5.2001 that the 2^nd Respondent was also approached through the Regional Stock Exchange namely Hyderabad Stock Exchange for relaxation of Rule 19 (2) (b) of the Securities Contracts (Regulation) Rules 1957 and that the 2^nd Respondent granted the relaxation vide its letter dt. 25.6.2001. He submitted that the 2nd Respondent had also directed Hyderabad Stock Exchange to list the shares and that it had made clear in the said letter that the "listing shall be done on all the Stock Exchanges wherever M/s. Goldstone Technologies Limited is listed."

Shri Raju submitted that except the 1st Respondent, all the Stock Exchanges to whom application was sent have already issued listing permission. He further submitted that the Appellant had written several letters to the Ist Respondent requesting to send the listing application for listing the equity shares of the Appellant at the earliest, that the Ist Respondent by its letter dt.10.7.2001 stated that it is not in a position to consider the request of the Appellant to issue the application form for listing as the Appellant does not satisfy the criteria specified by the Exchange.

Learned Counsel submitted that inspite of bringing to the notice of the 1^st Respondent the order of relaxation granted by the 2^nd Respondent under Rule 19 (2) (b) and the Honourable High Court�s order approving the scheme, 1^st Respondent has not issued any application for listing of the shares, that non-issuance of listing application and consequential non listing has caused great financial loss to the shareholders of the Appellant since the shares are not in a position to be traded in the National Stock Exchange. Shri Raju submitted that as a result of the 1^st Respondent�s decision, investors are put to suffer and prayed that pending disposal of the appeal, the said Respondent be directed to list the shares, by an interim order.

Learned Representative of the 1^st Respondent submitted that the Respondent has reconsidered the parameters for listing and the Appellant�s shares have become now eligible for listing. He stated that the Respondent will be sending the listing application to the Appellant in 2 or 3 days and on receipt of the formal application from the Appellant, the matter will be placed before the competent authority and suitable orders will be issued based on the decision of the authority.

Shri Santhosh Shukla, Representative of the 2^nd Respondent produced a letter dated 28.8.2001 addressed to the 1^st Respondent wherein it has been stated that "in view of the orders of the Honourable High Court of Andhra Pradesh, the shares need to be listed." and stated that the Respondent holds the same view.

Since the 1^st Respondent�s Representative has stated that the Appellant�s share is now eligible to be listed in the light of the revised parameters adopted by the Exchange and that necessary action will be taken in this regard, I do not consider it necessary to go into the various legal submissions made by Shri Raju. The 1^st Respondent is directed to provide the Listing Application to the Appellant without any further delay and on receipt of the duly filled in Application, consider the request for listing taking into consideration all the relevant aspects including the scheme of arrangement as approved by the Hon�ble High Court and the direction given by the 2^nd Respondent in its letter dated 28.8.2001, and communicate its decision to the Appellant without undue delay.

Appeal is disposed of in the above lines.