SAHARA INDIA REAL ESTATE CORPORATION LIMITED & ORS. versus SECURITIES AND EXCHANGE BOARD OF INDIA & ANR.

Citation: [2012] 12 S.C.R. 1 · Decided: 31-08-2012 · Supreme Court of India · Bench: K.S. RADHAKRISHNAN · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

(2012] 12 S.C.R. 1 
SAHARA INDIA REAL ESTATE CORPORATION LIMITED 
A 
& ORS. 
v. 
SECURITIES AND EXCHANGE BOARD OF INDIA & ANR. 
(Civil Appeal No. 9813 of 2011) 
AUGUST 31, 2012 
[K.S. RADHAKRISHNAN AND JAGDISH SINGH 
KHEHAR, JJ.] 
B 
Companies Act, 1956 - s. 55A - Allegation of pre- c 
planned attempt to bypass the regulatory (and administrative) 
authority of SEBI - Invitation to subscribe to Optionally Fully 
Convertible Debentures (OFCDs) - Inquiries made by the 
Investigating Authority - Powers of the Securities and 
Exchange Board of India ('SEBI? u/s.55A(b) of the Companies 0 
Act to administer various provisions relating to issue and 
transfer of securities to the public by listed companies or 
companies which intend to get their securities fisted on any 
recognized stock exchange in India - Discussed. 
Companies Act, 1956 - s. 73 r/w s. 60B - Issue as to E 
whether Optionally Fully Convertible Debentures (OFCDs) 
offered by the appellants should have been listed on any 
recognized stock exchange in India, being Public Issue under 
s. 73 r/w s. 60B and allied provisions of the Companies Act -
Discussed. 
F 
Securities and Exchange Board of India (Disclosure and 
Investor Protection) Guidelines, 2000 - Securities and 
Exchange Board of India (Issue of Capital and Disclosure 
Requirements) Regulations, 2009 -
Violation of DIP 
Guidelines and various regulations of the ICDR 2009 - If G 
made out. 
Securities Contracts (Regulation) Act, 1956 - Issue as 
to whether Optionally Fully Convertible Debentures (OFCDs) 
1 
H 
2 
SUPREME COURT REPORTS 
[2012] 12 S.C.R. 
A issued are securities under the SCR Act - Discussed. 
In the instant appeals, questions concerning the 
powers of the Securities and Exchange Board of India 
('SEBI') under Section 55A(b) of the Companies Act, 1956 
to administer various provisions relating to issue and 
8 transfer of securities to the public by listed companies or 
companies which intend to get their securities listed on 
any recognized stock exchange in India and also the 
question whether Optionally Fully Convertible 
Debentures ('OFCDs') offered by the appellants should 
C have been listed on any recognized stock exchange in 
India, being Public Issue under Section 73 read with 
Section 60B and allied provisions of the Companies Act 
and whether they had violated the Securities and 
Exchange Board of India (Disclosure and Investor 
D Protection) Guidelines, 2000 ['DIP Guidelines'] and 
various regulations of the Securities and Exchange 
Board of India (Issue of Capital and Disclosure 
Requirements) Regulations, 2009 ['ICDR 2009'], and also 
whether OFCDs issued are securities under the 
E Securities Contracts (Regulation) Act, 1956 ['SCR Act'], 
were raised. 
Much of the arguments centered round the scope 
and interpretation of various provisions of the Companies 
Act, SEBI Act and the rules and regulations framed 
F thereunder, relating to matters concerning the issue of 
securities, powers of SEBI, Central Government, Ministry 
of Corporate Affairs (MCA), Roe. Powers conferred on 
SEBI, Central Government, (MCA), RoC etc. under the 
Companies Act, SEBI Act also came up for consideration. 
G 
H 
Dismissing the appeals, the Court 
HELD: 
Per Radhakrishnan. J. [With Khehar, J. concurring] 
SAHARA INDIA REAL ESTATE CORP. LTD. v. SECURITIES 
3 
AND EXCH. BOARD OF INDIA 
1. QUESTIONS OF LAW RAISED WITH ANSWERS 
A 
Whether SE81 has jurisdiction or power to administer 
the provisions of Sections 56, 62, 63, 67, 73 and the 
related provisions of the Companies Act, after the 
insertion of Section 55A(b) w.e.f. 13.12.2000, by the 8 
Companies (Amendment) Act, 2000, so far as it relates to 
issue and transfer of securities by listed public 
companies, which intend to get their securities listed on 
a recognized stock exchange and. public companies 
which have issued securities to fifty persons or more 
without listing their securities on a recognized stock C 
exchange. 
Answer: SE81 has the powers to administer the 
provisions referred to in the opening part of Section 55A 
which relates to issue and transfer of securities and non-
D 
payment of dividend by public companies like Saharas, 
which have issued securities to fifty persons or more, 
though not listed on a recognized stock exchange, 
whether they intended to list their securities or not. 
Whether the public companies referred in question 
no. (a) is legally obliged to file the final prospectus under 
Section 608(9) with SE81 and wheth

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