GNLU SECURITIES AND INVESTMENT LAW MOOT 2016
TEAM CODE: 101
IN THE HON’BLE SUPREME COURT OF INDIA AT NEW DELHI
(FILED UNDER SECTION 15Z OF THE SEBI ACT 1992)
IN THE MATTER OF:
DREAMSELLERS
(APPELLANTS)
V. SEBI
(RESPONDENT)
M!"#$%& '$& " *+%&' "' ,+ A--&&%, A--&&%,
1
GNLU SECURITIES AND INVESTMENT LAW MOOT 2016 TABLE OF CONTENTS
LIST OFABBREVIA OFABBREVIAT TIONS......................................... IONS................................................................ .............................. ....... / INDE OF AUTHORITIES AUTHORITIES ............................................. .................................................................... .......................... ... STAT STATEMENT OF URISDICTION............. URISDICTION.................................... .............................................. ......................... .. 5 STATEMENT OF FACTS............................................................................ 6 ISSUES PRESENTED ................................................................ ................................................................................. ................. 3 SUMMAR4 OF ARGUMENTS........................ ARGUMENTS............................................... ........................................... .................... 9 ARGUMENTS ADVA ADVANCED .............................................. ..................................................................... ......................... 11
THAT THAT THE THE PROVIS PROVISION IONS S OF THE THE NEW TA TAEOVER EOVER CODE CODE COUL COULD D BE APPLIED TO AN OFFER MADE UNDER THE 1997 TAEOVER CODE.
THAT THAT DREAMS DREAMSELL ELLERS ERS HAD HAD ECER ECERSIZ SIZED ED PROPE PROPER R DUE DILI DILIGEN GENCE CE
THAT THAT SEBI HAS HAS VIOLA VIOLAT TED THE THE PRINCIPL PRINCIPLES ES OF NAT NATURAL USTICE USTICE WHILE WHILE PASSING THE PREVIOUS ORDER
THAT THAT REGULA REGULAT TION 27(1)() 27(1)() CANNOT CANNOT BE READ READ EUSDE EUSDEM M GENERIS GENERIS WITH OTHER PROVISIONS OF THE SAID REGULATION
PRA4ER8..................... PRA4ER8............................................ .............................................. .............................................. ............................... ........ 2/
LIST OF ABBREVIATIONS
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GNLU SECURITIES AND INVESTMENT LAW MOOT 2016
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INDEX OF AUTHORITIES
3
GNLU SECURITIES AND INVESTMENT LAW MOOT 2016 Statutes Referred C"!-%$> A=, 201/ A=, A=, N".1 "' 201/ T+ SEBI A=, 1992 SEBI (S;*>,%,$%& A=;$>$,$" "' S+%#> % T%"#>) T%"#>) R@;&%,$"> 1997 SEBI (S;*>,%,$%& A=;$>$,$" "' S+%#> % T%"#>) T%"#>) R@;&%,$"> 2011 SEBI (S;*>,%,$%& A=;$>$,$" "' S+%#> % T%"#>) T%"#>) (S=" A!!,) R@;&%,$" 2002. T+ C">,$,;,$" "' I$% 199
Cases C!ted R % "' L"" &,. 199/ B.C.C. 66 P"-&> D-%#,!,%& S,"#> C%> C%%% 200 / SCR 61 Chandrakala v Adjudicating Officer UOI . T;&>$#%! P%,& AIR 1935 SC 116 A;,"!%,$ T<# M%;'%=,;##> A>>"=$%,$" . D>$@%, A;,+"#$,< (2011) 2 SCC 253 B%>;" T$%#$ . S$+% %+; U$#>$,< AIR 1933 SC /261 G#%>$! I;>,#$> L, v C"&&=,"# "' C;>,"!> (200) ( 200) SCC 297. M%+%#%>+,#% H%&,+ S#$=> v S;,=+$$>% P#%>%#% M%%& (2010) / SCC 736. A!%# C+%#% C+%#%*"#,< v C"&&=,"# "' E?#=$> (1972) 2 SCC 2. S,%, "' %#%,%% . M%@%&"# U$#>$,< N" T%=+$@ E!-&"<> A>>"=$%,$" (2002) / SCC /02 C%,. B"%# . T%#%!%$ D$ 1992 S;-- 2 SCC 502 H%#$ P%% +% . UOI AIR 1996 SC 1065 S,%, "' U.P . M%+%#%% D+%#!#% P#%>% S$@+ (1939) 2 SCC 505
B""#s Referred M.P. M.P. %$ C">,$,;,$" "' I$% L?$> N?$> 7 ,+ E$,$" 201 D.D. B%>; C"!!,%#< " C">,. "' I$% I $% ;>,$= S.S. S;*#%!%$ V"&. V"&. 2 L?$> N?$> 9 ,+ E$,$" 201 G"# A D%$> P#$=$-&> "' M"# C"!-%< L% 9 ,+ E$,$" 2012
R$$# H #%%!% A%,"!< "' C"#-"#%, L%: A C"!-%#%,$ % F;=,$"%& A--#"%=+ 200
4
GNLU SECURITIES AND INVESTMENT LAW MOOT 2016
D!$t!"%ar!es Referred B&%=> L% D$=,$"%#< T+"!->" R;,#> 9 ,+ E$,$". W*>,#> W *>,#> C"!-#+>$ D$=,$"%#< D&;? E=<=&"-$= E$,$" T<-+"" T<-+"" I,#%,$"%& 200.
STATEMENT OF &URISDICTION
5
GNLU SECURITIES AND INVESTMENT LAW MOOT 2016 I, $> +;!*&< >;*!$,, ,+%, ,+ A--&&%, +%> %--#"%=+ ,+ H"*& S;-#! C";#, "' I$% $"$@ $,> ;#$>$=,$" ;# S=,$" 15Z "' ,+ SEBI A=, 1992.
STATEMENT OF FACTS A#,!$> L,. *"##" % >;! "' 100 C#"# '#"! D#%!>&&#> L,. % -&@ ;$,< >+%#> %> >=;#$,<. T+ *, %> ", #-%$ $,+$ ,+ -#>=#$* ,$!. U-" '%;&, "' 6
GNLU SECURITIES AND INVESTMENT LAW MOOT 2016 -% $" *< ,+ D#%!>&&#> L,. +$=+ ,$,&> ,+! ," 12.5J ;$,< >+%#> $ A#,!$>. A&"@ $,+ ,+ $"=%,$" "' -&@ D#%!>&&#> L,. =$ ," !% !% % "&; "&;, ,%#< %#< "- "- "'' "''## ; ;## R@; R@;&%, &%,$" $" 10 "' ,+ ,+ SEBI SEBI 1997 1997 T%" "# # R@;&%,$"> +$=+ ";& +&- ,+! %=;$# /7.6J ;$,< >+%#> $ A#,!$> ,+$> ";& ,% ;- ,+$# +"&$@ ;-," 50.1J $ A#,!$>.
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
O O=,"*# /02011 D#%!>&&#> L,. #", ,+#";@+ $,> !#=+%, *%#> ," SEBI >$@ ,"- $,+#% ,+ "- "''# A> % %&,#%,$ % $,+";,-#;$= %#@;!, D#%!>&&#> L,. >";@+, ,+%, SEBI >+";& -%>> % "## -#!$,,$@ #-#$=$@ "' ,+ "- "''# -#$= $ $ "' ,+ '%=,> ,+%, +% *="! " +$=+ ,+ !%#, $ ", " %#&$# % *=%;> "' +$=+ ,+ !%#, -#$= +% * !;=+ +$@+# ,+% +%, $, ";& +% * +% ,+ -#$= *="! ".
SEBI >,%, ,+%, %=;$##> >+";& =";=, ,+$# ; $&$@= *'"# =$$@ " +,+# ," !% !% % "- "- "''# "''# % $@"# $@"# ,+ #-#$= #-#$=$@ $@ -#"-">$,$ -#"-">$,$". ". SEBI SEBI %&>" %&>" >,%, >,%, ,+%, ,+%, R@;&%,$" 2/ "' ,+ N T%"# R@;&%,$"> ";& ", * %--&$=%*& %, %&& >$= ,+ "- "''# +% * !% ;# ,+ -#"$>$"> "' ,+ 1997 T%"# R@;&%,$">. T+ S=; S=;#$, #$,$ $>> % % E?=+ E?=+% %@ @ B"%# B"%# "' I$ I$%% (S;* (S;*>, >,% %,$% ,$%&& A=;$ =;$>$ >$,$" ,$" "' S+%# S+%#>> % % T%" T%"# #>) >) R@;&% R@;&%,$" ,$"> > 2011 2011 (N (N T%" %"# # R@;&% R@;&%,$" ,$"> >)) +% * * ",$'$ ",$'$ " S-,!*# 2/ 2011 % ,+ >%! =%! $," '"#= $,+ ''=, '#"! O=,"*# 22 2011.
A@@#$ *< ,+ SEBI O## D#%!>&&#> L,. '$& % %--%& *'"# ,+ S=;#$,$>
7
GNLU SECURITIES AND INVESTMENT LAW MOOT 2016 A--&&%, T#$*;%& (SAT) ;# S=,$" 15T "' ,+ SEBI A=, 1992 =+%&&@$@ ,+ >%!. T+ SAT %',# +%#$@ ,+ -%#,$> -%>> % "## $>!$>>$@ ,+ %--%& '$& *< D#%!>&&#> L,.. B$@ %@@#$ *< ,+ O## "' ,+ SAT D#%!>&&#> L,. '$& % %--%& *'"# ,+ H"*& S;-#! C";#, ;# S=,$" 15Z "' ,+ SEBI A=, 1992.
ISSUES PRESENTED
8
GNLU SECURITIES AND INVESTMENT LAW MOOT 2016 1. WHETHER THE THE PROVISIONS PROVISION S OF REGULATION REGULATION 2/ OF THE NEW TAEOVER TAEOVER REGULATIONS REGULATIONS RELATING RELATING TO WITHDRAW WITHD RAWAL AL OF OPEN OFFER COULD BE APPLIED TO AN OPEN OFFER MADE UNDER THE 1997 TAEOVER REGULATIONS 2. WHETHER DREAMSELLERS DREAMSELLE RS HAD FAILED FAILED TO ECERSISE DUE DILIGENCE AND THE FACTS RELATING TO FRAUD WERE NOWN OR COULD HAVE BEEN NOWN IF THE4 ECERCISED PROPER DUE DILIGENCE /. WHETHER SEBI HAS VIOLATED VIOLATED THE PRINCIPLES PRINCIP LES OF NATURAL NATURAL USTICE IN THE PRESENT CASE WHILE PASSING ITS ORDER WITHOUT HEARING DREAMSELLERS . WHETHER REGULATION REGULATION 27(1)() OF THE 1997 CODE IS TO BE GIVEN AN INTERPRETATION WHEREB4 THE WORDS >;=+ =$#=;!>,%=> %> $ ,+ "-$$" "' ,+ B"%# !#$, $,+#%%& ARE TO BE READ EUSDEM GENERIS WITH THE OTHER PROVISIONS OF REGULATION 27(1)() OF THE SAID CODE
SUMMAR' OF AR(UMENTS 1.WHETHER 1.WHETHER THE PROVISION PROVISIONS S OF REGULA REGULATION 2/ OF THE NEW TAEOV TAEOVER ER REGU REGULA LAT TIONS IONS RELA RELAT TING ING TO WI WITH THDR DRA AWAL OF OPEN OPEN OFFE OFFER R COUL COULD D BE APPLIED
TO
AN
OPEN
OFFER
MADE
UNDER
THE
1997
TAEOVER
REGULATIONS
9
GNLU SECURITIES AND INVESTMENT LAW MOOT 2016
I, $> +;!*&< >;*!$,, ,+%, % "- "''# %> !% *< ,+ A--&&%,> ;# R@;&%,$" 10 "' ,+ 1997 T%"# R@;&%,$"> ," %=;$# /7.6J "' A#,!$> L,. B%> " ,+ %;$, #-"#, $, +%> ="! ," ",$= ,+%, % %!";, ," ,+ ,; "' /00 C#"# %> >$-+" % !*KK& *< ,+ $#=,"#> "' A#,!$>. D; ," >;=+ ?,#%"#$%#< '%=,> ="!$@ ," &$@+, ,+ A--&&%,> =+"> ," $,+#% ,+$# "- "''#. A> ,+< +% " "-,$" *;, ," $,+#% $, ;# R@;&%,$" 2/ "' ,+ N T%"# T%"# R@;&%,$"> 2011 %> ,+ 1997 C" "> ", +% -#"$>$"> #&%,$@ ,"
,+
>%!.
2.WHETHER DREAMSELLERS HAD FAILED TO ECERSISE DUE DILIGENCE AND THE THE FACTS CTS RELA RELAT TING ING TO FRAU FRAUD D WERE WERE NOW NOWN N OR COUL COULD D HAV HAVE BEEN BEEN NOWN IF THE4 ECERCISED PROPER DUE DILIGENCE
I, $> +;!*&< >;*!$,, ,+%, %--&&%,> +% ?#=$> ; $&$@= %> ,+< +% ", !#&< #&$ " ,+ $'"#!%,$" +$=+ %> %%$&%*& ," ,+! ,+# %> #&$%= " ,+ $'"#!%,$" +$=+ %> %%$&%*& ," ,+! "&< %',# ,+"#";@+ $>,$@%,$". T+ >="- "' ; $&$@= $> &$!$, ," ,+ ?,, "' % #%>"%*& $$$;%& % ", -#'=,>> %--&&%,> $ ,+ -#>, =%> +% ?#=$> #%>"%*& % $'"#! =$>$". T+ >="- "' ; $&$@= $> &$!$, $ =%> "' &$>, ="!-%$> ; ," >,#$=,# "#!> +$=+ ,+< +% ," %+# "' SEBI. I' ,+ %--&&%,> +% ?#=$> ; $&$@= *<" ,+ $'"#!%,$" +$=+ %> %%$&%*& $ -;*&$= #%&! ,+< ";& * $ $"&%,$" "' $>$# ,#%$@ #@;&%,$" %> $, ";& #>;&, $ -">>>>$@ ;-;*&$>+ -#$= >>$,$ $'"#!%,$".
/.WHETHER SEBI HAS VIOLATED THE PRINCIPLES OF NATURAL USTICE IN THE PRESENT
CASE
WHILE
PASSING
ITS
ORDER
WITHOUT
HEARING
DREAMSELLERS
I, $> +;!*&< >;*!$,, ,+%, ,+ "## -%>> *< SEBI @"> %@%$>, ,+ -#$=$-&> "' %,;#%& ;>,$=. N" "' ,+ $@#$,> "' -#$=$-&> "' %,;#%& ;>,$= +% * '"&&" $ ,+ -#>, =%> #%@$@ '#"! "--"#,;$,< "' *$@ +%# ", @#%, " ="!-&$%= "' '%$# % ; -#"=;# *< SEBI " >-%$@ "##>: -#;$= =%;> ," -%#,$> ; ," " ?#=$> "' %;$ %&,#%! -%#,! " ="!!;$=%,$" "' #%>">.
10
GNLU SECURITIES AND INVESTMENT LAW MOOT 2016
.WH .WHET ETHE HER R REGU REGULA LAT TION ION 27(1 27(1)( )()) OF THE THE 1997 1997 CODE CODE IS TO BE GIVE GIVEN N AN INTERPRETATION WHEREB4 THE WORDS >;=+ =$#=;!>,%=> %> $ ,+ "-$$" "' ,+ B"%# !#$, $,+#%%& ARE TO BE READ EUSDEM GENERIS WITH THE OTHER PROVISIONS OF REGULATION 27(1)() OF THE SAID CODE
I, $> +;!*&< >;*!$,, ,+%, R@;&%,$" 27(1)() "' ,+ 1997 T%"# C" =%", * #% E;>! G#$> $,+ ",+# -#"$>$"> "' ,+ >%$ #@;&%,$" %> ,+ >;* =&%;>> " ", *&"@ ," ,+ >%! @;>. T+ SAT SAT $,+";, $,+";, =">$#$@ ,+ &@$>&%,$ +$>,"#< "' ,+ #@;&%,$" ## $ ="=&;$@ ,+%, ,+ #;& ";& * %--&$=%*&. A--&<$@ A--&<$@ ,+ #;& ," C&%;> () % ="'$$@ ,+ $>=#,$" @$ ," SEBI ," ,+ #%&! "' $!-">>$*$&$,< ," -#'"#! ,+ "- "''# ";& +% %#> ''=,> % ";& '%, ,+ -;#-"> "' ,+ T%"# T%"# C".
AR(UMENTS ADVANCED ADVANCED
1.WHETHER 1.WHETHER THE PROVISION PROVISIONS S OF REGULA REGULATION 2/ OF THE NEW TAEOV TAEOVER ER REGU REGULA LAT TIONS IONS RELA RELAT TING ING TO WI WITH THDR DRA AWAL OF OPEN OPEN OFFE OFFER R COUL COULD D BE APPLIED
TO
AN
OPEN
OFFER
MADE
UNDER
THE
1997
TAEOVER
11
GNLU SECURITIES AND INVESTMENT LAW MOOT 2016 REGULATIONS
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12
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2.WHETHER DREAMSELLERS HAD FAILED TO ECERSISE DUE DILIGENCE AND THE THE FACTS CTS RELA RELAT TING ING TO FRAU FRAUD D WERE WERE NOW NOWN N OR COUL COULD D HAV HAVE BEEN BEEN NOWN IF THE4 ECERCISED PROPER DUE DILIGENCE
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GNLU SECURITIES AND INVESTMENT LAW MOOT 2016 /.WHETHER SEBI HAS VIOLATED THE PRINCIPLES OF NATURAL USTICE IN THE PRESENT
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.WH .WHET ETHE HER R REGU REGULA LAT TION ION 27(1 27(1)( )()) OF THE THE 1997 1997 CODE CODE IS TO BE GIVE GIVEN N AN INTERPRETATION WHEREB4 THE WORDS >;=+ =$#=;!>,%=> %> $ ,+ "-$$" "' ,+ B"%# !#$, $,+#%%& ARE TO BE READ EUSDEM GENERIS WITH THE OTHER PROVISIONS OF REGULATION 27(1)() OF THE SAID CODE 34 S,%, "' %#%,%% . M%@%&"# M%@%&"# U$#>$,< N" T%=+$@ E!-&"<> A>>"=$%,$" A>>"=$%,$" (2002) / SCC /02 /1/ (P%#% 11) 35 CATA S%&> C""- S"=$,< . A.P. G", AIR 1977 SC 2/1/ 36 AIR 1976 SC /7 37 S G;-,% . H"&!> 2002 ECWA (C$$&) 110
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GNLU SECURITIES AND INVESTMENT LAW MOOT 2016
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38 (2009) 10 SCC 755. 39 SEBI (S;*>,%,$%& A=;$>$,$" "' S+%#> % T%"#>) T%"#>) R@;&%,$"> 1997.
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42 See M%+%#%>+,#% H%&,+ S#$=> v S;,=+$$>% P#%>%#% M%%& (2010) / SCC 736. See also, A!%# C+%#% C+%#%*"#,< v C"&&=,"# "' E?#=$> (1972) 2 SCC 2.
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GNLU SECURITIES AND INVESTMENT LAW MOOT 2016 All of !hich is %ost hu%&l' (ra'ed Counsel Counsel for the Appellants Appellants.
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