IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWENTY NINETH DAY OF FEBRUARY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE P.S.NARAYANA WRIT PETITION NO : 1061 of 2008 Between: M/s.SVPCL Ltd, a Public Ltd Company, rep.by its Managing Director, K.Mallikarjuna Reddy,S/o.Subba Reddy, R/o.206-A,Concourse, II Floor,Greenland Road, Ameerpet,Hyderabad ..... PETITIONER AND 1. Securities and Exchange Board of India, rep.by its Chairman Sebi Bhavan, Bandra East,Mubbai. 2. M/s.BOB Capital Markets Ltd (Wholly Owned Subsidiary of Bank of Borda) rep.by its Managing Director, Meher Chambers,Ground and First Floor, Dr.S.B.Marg Ballard Estate,Mumbai 3. UTI Securities Ltd, Rep,by its President,1 st Floor, Dheeraj Arma,Anant Kanekar Marg, Station Bandra East, Mumbai 4. M/s.Arathi Consultants Private Ltd rep.by its Chief Executive Officer, 1-2-285,Domalguda, Hyderabad 5.Bombay Stock Exchange, Rep.by its Chief Executive Officer, Bandra-Kurla Complex,Mumbai 6.National Stock Exchange, Rep.by its Chief Executive Officer, Bandra-Kurla Complex,Mumbai 7.Union of India, rep.by its Secretary, Ministry of Finance,New Delhi .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a writ of Mandamus or any other appropriate writ declaring that the action of the 5th respondent in rejecting the listing of equity shares of the petitioners in terms of its letter in reference No.DCS/IPO/MT/IPO-TP/1708/2008-8, dt.21-1-2008 without implementing the letter of the first respondent dt.4-1-2008 about the compliance of sections 73 of the companies Act, is arbitrary, illegal and ultra vires the provisions of the said Act is arbitrary, illegal and ultra vires the provisions of the said Act and consequently direct the 5th and 6th respondents to abide by the directions of the 1st respondent contained in its letter dt.28-11-2007 and 4-1-2008 and consequently enable the petitioner company to utilize the Subscription amount and grant such other relief as it deems fit in the circumstance of the case Counsel for the Petitioner:MR.V.VENKATARAMANA Counsel for the Respondent No.: MR.A.RAJASHEKAR REDDY (ASST SOLICITOR GEN) The Court made the following : ORDER: Respondent No.5 filed W.V.M.P.No.192 of 2008; Respondent No.6 filed W.V.M.P.No.334 of 2008 and Respondent No.4 filed counter-affidavit. A reply affidavit also had been filed. At the request of counsel on record, the writ petition was heard finally. 2. Heard Sri E. Manohar, learned senior counsel representing the writ petitioner, Sri S.R. Ashok, learned senior counsel representing R- 5, Sri Padmanabhan, Sri Ramesh Kumar Nayani, Sri Rajasekhara Reddy, Assistant Solicitor General representing respective respondents. 3. The writ petition is filed for a writ of Mandamus declaring that the action of the 5th respondent in rejecting the listing of equity shares of the petitioner in terms of its letter in reference No.DCS/IPO/MT/IPO- TP/1708/2007-08, dated 21.01.2008 without implementing the letter of the first respondent dated 04.01.2008 about the compliance of Section 73 of the Companies Act and consequently direct the 5th and 6th respondents to abide by the directions of the first respondent contained in its letters dated 28.11.2007 and 04.01.2008 and consequently enable the petitioner company to utilize the subscription amount and for such other suitable orders. 4. The facts in detail had been narrated in the affidavit filed in support of the writ petition. R-4 had filed counter-affidavit. A memo had been filed by R-5. Apart from the memo, R-5 filed a counter- affidavit in detail along with W.V.M.P.No.192 of 2008. Likewise, R-6 filed a counter-affidavit in detail along with W.V.M.P.No.334 of 2008. A reply affidavit also had been filed. 5. Sri E. Manohar, learned senior counsel had taken this Court through the relevant dates and the only objection on which the rejection was made and how the same is unsustainable. The learned senior counsel had drawn the attention of this Court to Appendix G (g) of the bye-laws and also Section 73 of the Indian Companies Act, 1956. The learned senior counsel also explained how this objection raised is totally untenable and also further explained how this court can entertain the writ petition. The learned senior counsel would maintain that the major part of cause of action arose within the jurisdiction of this Court and the registered office of the company is at Hyderabad and the initial public offer was at Hyderabad and issue opened and closed at Hyderabad and since the rights of the petitioner are affected, the writ petitioner is entitled to invoke the jurisdiction of this Court. The learned senior counsel had drawn the attention of this Court to the decisions in Union of India and others V. Adani Exports Ltd., and another[1] and M/s. Kusum Ingots and Alloys Ltd., V. Union of India and another[2]. Further while elaborating his submissions the learned senior counsel had drawn the attention of this Court to the decision in Whirlpool Corporation V. Registrar of Trade Marks, Mumbai and others[3]; Yarlagadda Venkateswara Rao and others V. Government of Andhra Pradesh rep. by its Principal Secretary, Panchayat Raj Department and others[4] and also made elaborate submissions in relation to Sections 73 and 55A of the Indian Companies Act, 1956. The learned senior counsel also would maintain that since it is a case of inherent lack of jurisdiction, the question of invoking alternative remedy by way of appeal would not arise even otherwise it is not an effective alternative remedy in the facts and circumstances of the case. The learned senior counsel in all fairness would submit that in the present set of facts no positive relief as such can be granted as against R-6, but as against R-5 suitable directions are to be issued. 6. Sri V. Padmanabhan, representing R-6 had taken this Court through the relevant portions of the counter-affidavit of R-6 and would maintain that there is no cause of action as against R-6. 7. Sri Ramesh Nayani and Assistant Solicitor General also advanced submissions. Sri S.R. Ashok, the learned senior counsel had explained the prospectus and also further explained Appendix G and further laid emphasis on the Securities Contracts (Regulations) Act, 1956 in general, Rule 19 in particular and would maintain that discretion is given to Bombay Stock Exchange and in the light of the legal duties and obligations cast on R-5, the impugned rejection had been made. The learned senior counsel also explained the duties and obligations of the lead managers and after due consideration the said decision had been taken. While making elaborate submissions the learned senior counsel would submit that this is just an administrative order and hence it cannot be said that the action to be judged only on the strength of the reasons which had been recorded, but other general reasons in the light of the statutory provisions and rules also may have to be looked into. At any rate, the learned senior counsel would contend that in the light of the view expressed by the Apex Court in the decision Union of India and others V. Adani Exports Ltd., and another (1 supra) the writ petition cannot be maintained before this Court. The learned senior counsel also would maintain that even otherwise it would be only a futile writ. The petitioner is having an effective alternative remedy and this aspect was not pleaded at all in the affidavit filed in support of the writ petition. But the same was pleaded in the reply affidavit. The learned senior counsel also explained how this Court cannot entertain the present writ petition and further explained the decisions in M/s. Kusum Ingots and Alloys Ltd., V. Union of India and another (2 supra), Union of India and others V. Adani Exports Ltd., and another (1 supra) and also relied upon the decision in Raymond Synthetics Ltd. and others V. Union of India and others[5]. 8. Heard the counsel on record. 9. Several of the facts had been narrated in the affidavit filed in support of the writ petition and in the counter-affidavit of R-4 after narrating several facts it had been averred that paras 3, 4 and 5 deal with the facts and circumstances and are correct and they do not need any reply. In the counter-affidavit filed by R-5 the ground of territorial jurisdiction and the ground of alternative remedy had been specifically raised in para 4. No doubt, several other facts had been narrated further in detail. In the counter-affidavit of R-6 the facts had been narrated in detail. A reply affidavit also was filed. 10. On careful analysis of the respective pleadings of the parties it is not a case where the impugned action is said to be one totally without jurisdiction. May be the said jurisdiction was not exercised in accordance with law or the rejection made may be on an untenable ground. The general powers and discretion of the 5th respondent as conferred by the Rules had been argued in elaboration. When it is not a case of inherent lack of jurisdiction even if it is otherwise an irregular order or an order liable to be interfered with in the light of the respective stands taken by the parties and also in the light of the different provisions of the Indian Companies Act, 1956, this Court is of the considered opinion that these questions can be properly and effectively gone into by the Appellate Tribunal under Section 22-A of the Securities Contracts (Regulation) Act, 1956. 11. Hence, without expressing any further opinion relating to the other merits and demerits, liberty is given to the writ petitioner to urge all the grounds raised in the affidavit filed in support of the writ petition and also reply affidavit by filing an appeal before the appropriate Appellate Tribunal as specified supra within a period of two weeks from the date of receipt of this order. 12. Accordingly, the writ petition is disposed of. No order as to costs. ___________________ (P.S. NARAYANA, J) Date: February 29, 2008. BSB Note: Issue copy by 03.3.2008 //B.O.// RNS. ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{BMR} [1] (2002) 1 Supreme Court Cases 567 [2] AIR 2004 SUPREME COURT 2321 [3] (1998) 8 Supreme Court Cases 1 [4] 2007 (2) ALT 65 [5] (1992) 2 Supreme Court Cases 255