Writ petition against SEBI dismissed for being  premature  and considered beyond the writ jurisdiction – Madras high court

W.P.(MD)No.96619BEFORE THE MADURAI BENCH OF MADRAS HIGH COURTDATED: 23.06.2021CORAM :THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMANDTHE HONOURABLE MRS.JUSTICE S.ANANTHIW.P.(MD) No.96619andWMP(MD).No.111219T.Palpandi.. Petitioner Vs1.The Securities and Exchange Board of India Plot No.C4 A G Block Near Bank of India Bandra Kurla Complex Bandra East Mumbai Maharashtra 400 051. 2.Ms.Madhabi Puri Buch Whole time Member Securities and Exchange Board of India SEBI Bhavan C 4 A G Block Bandra Kurla Complex BandraMumbai 400 051.... RespondentsPRAYER: Petition under Article 226 of the Constitution of India seeking issuance of a writ of Mandamus directing the first respondent SEBI by virtue of exercise of its powers to take necessary actions on the promoter __________https: www.mhc.tn.gov.in judis W.P.(MD)No.96619directors and key managerial personnel of the relevant time of the Commodity Broking Companies which have been declared Not fit and Proper and also consequentially declare the Securities Broking Company and other Companies regulated by SEBI as Not fit and Proper Person in the interest of the market participants pursuant to the representation dated 26.03.2019.For Petitioner :Mr.Nithesh NatarajFor respondents :Mr.C.Prasannavinothfor R2No appearance for R1ORDER as Not fit and Proper Person in the interest of the market participants pursuant to the representation dated 26.03.2019.2. This is the second time the petitioner is before this Court by way of Public Interest Litigation. The earlier Writ Petition WP(MD)No.49418 filed by the petitioner seeking for a direction upon the Ministry of Corporate Affairs and SEBI to take necessary action against the delinquent brokers as mentioned in the Grant Thornton Report dated 21.09.2013 by considering their representation. The matter was heard by the Division Bench and by order dated 13.03.2019 the same was disposed of.3. It appears that a report was placed before the Court in a sealed cover and the Court has perused the report and thereafter disposed of the Writ Petition observing that there is no further adjudication required in the matter at the instance of the petitioner. __________https: www.mhc.tn.gov.in judis W.P.(MD)No.966194. Now the petitioner has named certain persons who according to the petitioner are errant brokers and alleges that SEBI has been selective in taking action and therefore seeks for appropriate direction to consider the representation. A counter affidavit has been filed by SEBI wherein apart from pointing out the factual aspects has mentioned about the investigation that has been done at various levels and regarding the pendency of the appeal before the Appellate Board. The petitioner has filed an elaborate re joinder with regard to the factual averments set out by the SEBI in the counter affidavit. 5. In our considered view SEBI is a Regulatory Authority and they are the organization which is functioning under the provisions of the Securities and Exchange Board of India Act 1992. The powers of the various Authorities under the Act have been clearly circumscribed. This Court exercising jurisdiction under Article 226 of the Constitution of India cannot issue any direction to interdict the investigation or enquiry process __________https: www.mhc.tn.gov.in judis W.P.(MD)No.96619which according to SEBI have already been commenced and certain orders have been passed. Aggrieved individuals are before the Appellate Board. 6. That apart though the petitioner has named five persons to be errant brokers and those five persons are said to be still involved in certain other entities those five persons are not before us as respondents. 7. Be that as it may if those five persons are involved in any other organizations and those are separate legal entities the question would be as to whether a Writ of Mandamus can be issued to SEBI to take action against those individuals with whom those five persons are associated. All these areas are well beyond the scope of Writ jurisdiction of this Court. So the petitioner has to necessarily await the decision of the Appellate Board before whom the proceedings are pending and also await the investigation which has been commenced at very high levels. __________https: www.mhc.tn.gov.in judis W.P.(MD)No.966198. Therefore we are of the view that the present Writ Petition is premature. Hence leaving all issues open the Writ Petition stands closed. No costs. Consequently the connected Miscellaneous Petition is closed.(T.S.S. J.) No.9661923.06.2021__________

Summary: Writ petition against SEBI dismissed for being  premature  and considered beyond the writ jurisdiction – Madras high court A petition for issuance of a writ of Mandamus was filed under article 226 of the constitution of India to direct SEBI to exercise its powers for necessary action against the promoter was heard by a two-judge bench of THE HONOURABLE MR. JUSTICE T.S.SIVAGNANAM AND THE HONOURABLE MRS.JUSTICE S.ANANTHI in the case of T.Palpandi versus The Securities and Exchange Board of India and Ors W.P.(MD) No.9667 of 2019 and WMP(MD). No.11129 of 2019 The petitioner has filed to direct the SEBI to use its powers and take necessary actions on the personnel of Commodity Broking Companies, which have been declared ‘Not fit and Proper’ and to declare other companies regulated under SEBI as ‘Not fit and Proper Person’ in the interest of the market participants. this was the second petition in the same matter the earlier writ petition WP(MD)No.4947 of 2018 was disposed of. In this petition, the petitioner has named certain persons who according to the petitioner are errant brokers and alleges that SEBI has been selective in acting and therefore, seeks for appropriate direction to consider the representation. The SEBI has filed a counter-affidavit and mentioned various levels of investigation. The court decides that SEBI is a Regulatory Authority and is functioning under the provisions of the Securities and Exchange Board of India Act, 1992  the powers of authority is clearly defined hence this court cannot issue any direction or any order which is investigated by the authority and appellants are under the appellate board. Therefore the main question is whether a Writ of Mandamus can be issued to SEBI to take action against the five individuals in the matter.   The court is of the view that these areas are well beyond the scope of writ jurisdiction of this Court. So, the petitioner has to necessarily wait for the decision of the Appellate Board before whom the investigation is going on. this court decides the writ petition as premature and the petition stands closed.