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IN THE SECURITIES APPELLATE TRIBUNAL MUMBAI Appeal
No: 61/2003
In
the matter of
CORAM ��������� Justice
Kumar Rajaratnam, Presiding Officer ��������� Dr.
B. Samal, Member ��������� N.L.
Lakhanpal, Member Per:��� N.L. Lakhanpal, Member 1.
The
appeal is taken up with the consent of parties for final disposal. 2.
The
appeal is against the order dated 3.
It
is common ground that the appellant had advanced a sum of Rs. 2.40 crore to
M/s. Trackparts of India Limited (TPIL) in terms of pledge document dated 4.
During
the hearing of the appeal before us, with the facts not being in dispute, the
only short point for consideration was whether the transfer of shares in the
name of the appellant for realizing its lawful dues amounted to acquisition as
defined in SEBI (SAST) Regulations, 1997. The learned Senior Counsel for the
appellant argued in this context that the transfer of shares took place as a
result of a mutual agreement and that in terms of this agreement, the shares
continued to remain with the appellant as collateral securities despite
transfer of ownership and the voting rights arising from the transfer of these
shares continued to be exercised by Shri K.N. Bhargava and Shri B.N. Bhargava
on the basis of the power of attorney executed in their favour. According to
the learned counsel the transfer of these shares was also a subject matter of
dispute before the Hon�ble Company Law Board and that even if this transfer was
considered as acquisition, such acquisition was not yet complete and final
because of the challenge before the Company Law Board.� On going through the impugned order we find
that the same two grounds had been taken up before the Adjudication and Enquiry
Officer also and these issues have been adequately and correctly considered in
the impugned order. In any case, the fact of the matter is that the shares were
indeed transferred in the name of the appellants and it was the appellant whose
name came to be entered as beneficial owner in the register of members of the
company and under Section 41(3) of the Companies Act, it was the appellant who
was deemed to be a member of the TPIL w.e.f. the date of transfer of
shares.� The voting rights thus vested
with the appellant and the question whether he exercised these voting rights
himself or through Shri K.N. Bhargava and Shri B.N. Bhargava through the power
of attorney does not alter the situation with respect to the acquisition in any
manner whatsoever.� In the light of this
position we do not find anything objectionable in the impugned order. 5.
During
the hearing, the learned Counsel for the appellant seemed to be inclined to
accept this position but was apprehensive that despite this adjudication order
SEBI might nevertheless again direct him to make a public offer or take further
proceedings under Section 11 or Section 24 of the SEBI Act, 1992.� The learned counsel for the respondent fairly
made a statement across the bar that even though SEBI could take additional
actions as apprehended by the appellant, there was no such proposal before SEBI
to initiate any further proceedings. On instructions, the learned Counsel for
SEBI agreed that his statement across the bar be taken on record for allaying
the appellant�s apprehensions on this score. With this view of the matter we dismiss
the appeal and confirm the impugned order.�
There shall be no order as to costs.
Place: Mumbai Date:
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