The High Courts of Andhra Pradesh and Bombay, in 2011, approved the scheme of arrangement and amalgamation between Nagarjuna Fertilizers & Chemicals Limited and certain other entities, and the company was granted ‘in-principle approval’ by the stock exchanges for listing of its shares. However, before the company could proceed with the listing, it required waiver/ relaxation of the conditions set out under Rule 19 (2) of Securities Contracts (Regulation) Rules, 1957, and it made an application to SEBI, through the stock exchanges, seeking such relaxation. Instead of passing any order in this regard, SEBI filed an application before the High Court of Bombay seeking review of the order approving the Scheme on the grounds that the company deliberately and wilfully suppressed vital and material facts while obtaining the High Court’s approval.

Aggrieved by this, the company filed an appeal before SAT under Section 15T of the SEBI Act. However, SAT was inclined to keep the matter pending until the High Court came to a conclusion. The High Court finally passed an order dismissing SEBI’s application holding that the company had not suppressed any information and that SEBI had no locus to intervene in a petition filed for a scheme of arrangement. The company approached SAT again, armed with the order of the High Court, requesting them to direct SEBI to pass appropriate orders. Before SAT, SEBI submitted that the appeal is not maintainable as they had not passed any order that would warrant an appeal. SEBI further submitted that it had filed an appeal before the Division Bench of the High Court and that SEBI cannot be compelled to pass an order until the appeal was disposed of.

On considering the rival submissions, SAT concluded that, once the court which sanctioned the Scheme has rejected SEBI’s contentions, SEBI cannot again refuse to pass an order on the applications submitted by the company merely because it has filed an appeal before the Division Bench. In regard to maintainability of the appeal, SAT held that section 15T allows any person who is aggrieved by an action or inaction on the part of SEBI to file an appeal before SAT. It observed that acceding to SEBI’s contentions would leave persons aggrieved by SEBI’s inaction remediless. Through this order dated October 30, 2015, SAT directed SEBI to pass an order on the application seeking relaxation submitted by the company within the stipulated time. This is a landmark decision by SAT which has shed some clarity on the scope of Section 15T of the SEBI Act.