VISHAL TIWARI versus UNION OF INDIA & ORS

Citation: [2023] 2 S.C.R. 951 · Decided: 02-03-2023 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Directions issued

cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
951
VISHAL TIWARI
v.
UNION OF INDIA & ORS.
(Writ Petition (C) No. 162 of 2023)
MARCH 02, 2023
[DR DHANANJAYA Y CHANDRACHUD, CJI,
PAMIDIGHANTAM SRI NARASIMHA AND
J. B. PARDIWALA, JJ.]
Securities Contracts (Regulation) Rules, 1957 – r. 19A – Loss
of the investor wealth in securities market – The Hidenburg Report
– Investigation – The batch of petition in the instant case are
regarding the loss of investor wealth in the securities market because
of the steep decline in the share of the Adani Group of Companies
because of the report published by one Hidenburg Reasearch in
which it was alleged that the Adani Group of Companies has
manipulated its share prices and also has failed to disclose the
transaction with related parties in contravention of the regulations
framed by SEBI – The report alleges that company has violated
other provision of securities laws – Hindenburg Research has taken
a short position in the Adani Group companies through US traded
bonds and non-Indian traded derivative instruments – SEBI had
started the investigation, the Court directed it to extend the scope
of its investigation which should include investigation as to any
violation of r. 19A, and also that whether there has been any failure
to disclose transaction with related parties along with other relevant
information and also that whether there was any manipulation of
stock prices in contravention of existing laws – Further, the Court
ordered the appointment of an Expert Committee for the assessment
of the extant of regulatory framework and for the recommendation
to strengthen and also to suggest the measures to strengthen investor
awareness – Also, for effective working of Expert Committee, the
Court directed SEBI to provide requisite information relevant for
the purpose and also directed other agencies of the Union
Government to cooperate with the committee.
ORIGINAL CIVIL/CRIMINAL JURISDICTION: Writ Petition
(C) No. 162 of 2023.
[2023] 2 S.C.R. 951
951
A
B
C
D
E
F
G
H
952
SUPREME COURT REPORTS
[2023] 2 S.C.R.
Under Article 32 of The Constitution of India.
With
Writ Petition (Crl.) No. 39 of 2023, Writ Petition (C) No. 201 of
2023 and Writ Petition (Crl.) No. 57 of 2023.
Prashant Bhushan, Ms. Neha Rathi, Ramesh Kumar Mishra,
Kamal Kishore, V.V. Gotam, Varun Thakur, Varinder Kumar Sharma,
Advs. for the Petitioner.
Tushar Mehta, SG, Jaideep Gupta, Sr. Adv., Akhil Abraham Roy,
Ms. Surekha Raman, Abhishek Anand, M/s KJ John & Co., Kanu
Agarwal, Rajat Nair, Arvind Kumar Sharma, Ramesh Babu MR, Ms.
Manisha Singh, Ms. Nisha Sharma, Ms. Jagriti Bharti, Ms. Tanya
Chowdhary, Rohan Srivastava, Advs. for the Respondents.
Vishal Tiwari, Manohar Lal Sharma, Petitioner-in-Person.
The following Order of the Court was passed:
O R D E R
1. Notice.
2. The present batch of petitions concerns the loss of investor
wealth in the securities market over the last few weeks because of a
steep decline in the share price of the Adani Group of companies. The
decline in the share price was precipitated by a report published by
Hindenburg Research on 24 January 2023. This report inter alia alleges
that the Adani Group of companies has manipulated its share prices;
failed to disclose transactions with related parties and other relevant
information concerning related parties in contravention of the regulations
framed by SEBI; and violated other provisions of securities laws. The
report also states that Hindenburg Research has taken a short position
in the Adani Group companies through US traded bonds and non-Indian
traded derivative instruments. It is in this background that the present
batch of petitions came to be filed.
3. A brief overview of the petitions follows:
a.
WP(C) No. 162 of 2023 states that public money amounting
to thousands of crores is at risk because public institutions
like the State Bank of India1 and the Life Insurance
1 “SBI”
A
B
C
D
E
F
G
H
953
Corporation of India2 are exposed to the Adani Group. It
inter alia seeks the issuance of directions to the Union of
India and the Union Ministry of Home Affairs to constitute
a committee headed by a retired judge of the Supreme Court
to investigate the contents of the report published by
Hindenburg Research;
b.
WP(Crl) No. 39 of 2023 is for the issuance of directions to
the Union Ministry of Home Affairs to register an FIR
against Mr. Nathan Anderson (founder of Hindenburg
Research) and his associates for short selling, and for
directions to recover the profits yielded by the short selling
to com

Excerpt shown. Read the full judgment & AI analysis in Lexace.