G. Anoop v Union of India and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** ## **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **WEDNESDAY, THE 31ST DAY OF MARCH 2021 / 10TH CHAITHRA, 1943** **WA.No.524 OF 2021** **AGAINST THE ORDER/JUDGMENT IN WP(C) 22430/2020(C) OF HIGH COURT OF KERALA** ## **APPELLANT/PETITIONER:** **G.ANOOP AGED 51 YEARS KRISHNA KRIPA, KRISHNA GARDENS, KUTTUR P.O., THRISSUR, KERALA 680 013** **BY ADVS. SRI.SUKUMAR NAINAN OOMMEN SRI.SHERRY SAMUEL OOMMEN SMT.NIDHI JACOB SHRI.NITISH SATHESH SHENOY** ## **RESPONDENTS/RESPONDENTS:** |**1**|**UNION OF INDIA**| |---|---| ||**REP.BY THE SECRETARY, MINISTRY OF CORPORATE AFFAIRS,**| ||**'A' WING, SHASTRI BHAWAN, RAJENDRA PRASAD ROAD, NEW**| ||**DELHI 110 001.**| |**2**|**SECURITIES AND EXCHANGE BOARD OF INDIA**| ||**REP.BY THE CHAIRMAN, PLOT NO.C4-A, 'G' BLOCK, BANDRA**| ||**KURLA COMPLEX, BANDRA EAST MUMBAI - 400 051**| |**3**|**THE DEPUTY GENERAL MANAGER**| ||**SECURITIES AND EXCHANGE BOARD OF INDIA, SOUTHERN**| ||**REGIONAL OFFICE, KOCHI LOCAL OFFICE, 6TH FLOOR,**| ||**FINANCE TOWERS, KALOOR, KOCHI 682 017**| |**4**|**BRD SECURITIES LIMITED.**| ||**REP.BY ITS MANAGING DIRECTOR, XIII/436, A2, 1ST**| ||**FLOOR, BETHANY COMPLEX, KUNNAMKULAM, THRISSUR KERALA**| ||**680 503**| WA.No.524 OF 2021 2 **5 THE REGISTRAR OF COMPANIES ERNAKULAM, COMPANY LAW BHAWAN, BMC ROAD, THRIKKAKARA, KOCHI 682 021** **6 ASSISTANT GENERAL MANAGER SECURITIES AND EXCHANGE BOARD OF INDIA, SOUTHERN REGIONAL OFFICER-KOCHI LOCAL OFFICE, 6TH FLOOR, FINANCE TOWERS, KALOOR, KOCHI 682 017** **SRI.P.VIJAYA KUMAR,ASSISTANT SOLICITOR GENERAL SRI. K.M.JAMALUDHEEN,STANDING COUNSEL** **THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 22-03-2021, THE COURT ON 31-03-2021 DELIVERED THE FOLLOWING:** WA.No.524 OF 2021 3 ## **JUDGMENT** **Dated this the 31st day of March 2021** WA.No.524 OF 2021 4 ## **SHAJI P.CHALY,J** The captioned writ appeal is filed by the petitioner in W.P.(C) No.22430/2020, challenging the judgment of the learned single Judge dated 12.2.2021, whereby the learned single Judge declined to interfere with Exhibit P3 show cause notice issued by the Securities and Exchange Board of India (SEBI) dated 13[th] March, 2020, holding that, since Exhibit P3 is only a show cause notice, the appellant would have the opportunity to establish his case before the Board. Brief material facts for the disposal of the appeal are as follows; 2. Appellant is a fellow member of the Institute of Chartered Accountants of India and he has been appointed as a debenture trustee from 5.1.2007 in respect of certain private placement of non-convertible debenture (NCD) issued by BRD Securities Limited, apparently a company incorporated under the Companies Act, 1956 - the 4[th] respondent. The 4[th] respondent is a non-banking financial company (NBFC), regulated by the Reserve Bank of India (RBI). Exhibit P3 show cause notice was issued by SEBI on the appellant for acting as debenture trustee in respect of amounts collected from 2007 to 2013. The case of the appellant is that the said show cause notice has been issued on the erroneous presumption that the amounts have been collected through public issue of non-convertible debenture, however, the amounts have been collected through private placements. Therefore, according to the appellant, the matters WA.No.524 OF 2021 5 concerning private placement of such debentures are regulated by the RBI through its instructions since SEBI had not issued any instructions under section 67 (3A) of the Companies Act, 1956, hereinafter called, 'Act, 1956'. That apart it is pointed out that the amounts collected through private placements have been refunded to subscribers on maturity. 3. Based on the above factual circumstances the points raised by the appellant before the learned single Judge was that, the SEBI and its officials have no jurisdiction to issue the show cause notice in question since the matter absolutely falls within the domain of the RBI; the show cause notice issued by the Deputy General Manager of SEBI, Southern Regional Office, Kochi, has no statutory sanction since the Act, 1956 was repealed and the Companies Act, 2013 was brought into force; the issues raised in the show cause notice with regard to the non-convertible debenture is of the financial year 2007 – 2013 and therefore, it is hopelessly barred by limitation and apart from the same it was contended that the show cause notice was issued on the basis of information collected behind the back of the appellant. So also it was submitted that the appellant has not been furnished with copies of documents on the basis of which charges against him are proposed to be sustained. 4. The learned single Judge after taking into account the facts and figures projected by the appellant and taking note of the relevant provisions of the SEBI Act, 1992 and the SEBI (Debenture Trustees) Regulations, 1993, have concluded WA.No.524 OF 2021 6 that the contentions so advanced by the appellant cannot be sustained and the appellant is entitled to take up all contentions before SEBI by filing suitable reply and participate in the proceedings initiated by SEBI. 5. The paramount contentions advanced by the appellant in the appeal is that the learned single Judge has failed to take note of the fact that the issue raised was in relation to the jurisdiction of SEBI to issue the show cause notice, relegating the appellant to participate in the proceedings so initiated, and therefore, cannot be sustained under law; that the learned single Judge has not taken note of the fact that the Deputy General Manager, SEBI, has issued the show cause notice on the presumption that the SEBI has supervisory powers under sections 55A, 117B and 67(3A) of the Companies Act, 1956; that the SEBI has apparently assumed its jurisdiction under section 55A of the Act, 1956, which delineates the powers of SEBI in relation to certain provisions of Act, 1956, however, section 55A does not include in its ambit sections 117B or 67(3A) of the Act, 1956; that section 117B(1) mandates the appointment of debenture trustee, which includes an individual, where the company intends to issue a prospectus or a letter of offer to the public as opposed to private placement which does not require issue of a prospectus. Therefore, it is contended that section 117B has to be interpreted in conjunction with SEBI (Issue and vesting of Debt Securities) Regulations, 2008, wherein the terms 'private placement' and 'public issue' have been defined under regulations 2(1)(h) and 2(1)(i), however, WA.No.524 OF 2021 7 regulation (3 ) provides that the said regulation extends only to public issue. 6. That apart a predominant contention is raised that the Deputy General Manager of SEBI has invented the phrase, “Deemed Public Issue” in order to bring it under the category of public issue and therefore, according to the appellant, the issues raised in the show cause notice cannot be sustained under law and the learned single Judge ought to have exercised the discretionary power conferred under Article 226 of the Constitution of India and quashed the proceedings. In fact various other contentions are also raised in the writ appeal relying upon the principles of law laid down by the Hon'ble Apex Court in its various judgments and relying upon the provisions of the Reserve Bank of India Act, 1934 and other allied statutes. The appellant has also contended that since the Act, 1956 was repealed, the reliance placed by SEBI at the provisions of the said Act cannot be sustained under law and the said aspect was overlooked by the learned single Judge while dismissing the writ petition and relegating the appellant to the authority of SEBI. According to us, these aspects were in fact considered by the learned single Judge and has found that a debenture trustee is a trustee under trust deed, appointed for securing any issues of debentures of a body corporate and when a debenture trust deed is executed, a security is created by mortgaging property of the incorporated company in favour of debenture trustee for the debenture holders. Other facets and the nature of function to be discharged by a debenture trustee were also discussed in the WA.No.524 OF 2021 8 judgment of the learned single Judge so as to arrive at the conclusions and ultimately it was held that no debenture trustee can deal in securities except under and in accordance with the conditions of registration obtained from the SEBI in accordance with the SEBI (Debenture Trustees) Regulations, 1993. 7. Relying upon regulation 7 of Regulations, 1993, it was held that no person shall be entitled to act as a debenture trustee unless; (a) he is either a scheduled bank carrying on commercial activity; or (b) a public financial institution within the meaning of section 4A of the Companies Act, 1956 ; or (c) an insurance company; or (d) a body corporate. Accordingly, it was found that the appellant, who was acting as a debenture trustee, has no case that he is holding registration to act so. Therefore, it is prima facie violation of section 12(1) of the SEBI Act, 1992. The contention advanced by the appellant that the company being a non-banking financial company is regulated by the Companies Act, the RBI Act, and Regulations thereto only and is not amenable to the jurisdictional authority of SEBI and therefore, Exhibit P2 show cause notice is ultravirus, was found to be unacceptable for the reason that though the company is a non-banking financial company, as far as regulation of issue of debentures and non-current bonds is concerned, it is the bounden duty of SEBI to protect the interest of investors in securities. It was also found that as long as the non-banking financial companies are not specifically excluded from the purview of SEBI Act, 1992, the Board will have jurisdiction over the securities WA.No.524 OF 2021 9 transaction of the non-banking financial company including the debenture trustees. The contentions so raised are stoutly opposed by learned senior counsel appeared for SEBI . 8. We have heard Sri.Sukumar Ninan Oommen for the appellant, Sri P. Vijayakumar ASGI for the Union of India and learned Senior Counsel Sri.Raju Joseph, assisted by Adv.K.M.Jamaludheen for the SEBI and perused the pleadings and materials on record. 9. The basic issue raised by the learned Counsel for the appellant revolves around the provisions of the SEBI Act, 1992, the Regulations thereto, the Reserve Bank of India Act, 1934, the Companies Act, 1956 and the Companies Act, 2013. The SEBI Act, 1992 is an Act introduced to provide for the establishment of a Board to protect the interest of the investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto. Section 11 of the said Act deals with the functions of the Board constituted under section 3 of the Act and sub-section (1) thereto specifies that subject to the provisions of the Act, it shall be the duty of the Board to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, by such measures as it thinks fit. 10. It is only appropriate to point out that 'securities' is defined under section 2(i) of the SEBI Act, 1992 to mean, the meaning assigned to it in section WA.No.524 OF 2021 10 2 of the Securities Contracts (Regulation) Act, 1956. Sub-section (2) of section 2 makes it clear that the words and expression used and not defined in the SEBI Act, 1992 but defined in the Securities Contracts (Regulation) Act, 1956 or the Depositories Act, 1996 shall have the meanings respectively assigned to them in that Act. Therefore, bearing in mind the powers and functions of the Board so created, we are proceeding to consider the rest of the functions of the Board constituted under section 11(2) without causing prejudice to the provisions of section 11(1) of the Act, 1992, which reads thus: 1. **Functions of Board** .(1) x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x (2) Without prejudice to the generality of the foregoing provisions, the measures referred to therein may provide for— (a) regulating the business in stock exchanges and any other securities markets; (b) registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner; [(ba) registering and regulating the working of the [depositories, participants, custodians] of securities, foreign institutional investors, credit rating agencies and such other intermediaries as the Board may, by notification specify in this behalf;] (c) x x x x x x x x x x x x x x x x x (d) x x x x x x x x x x x x x x x x x - (e) prohibiting fraudulent and unfair trade practices relating to securities - markets; (f) x x x x x x x x x x x x x x x x **==> picture [398 x 12] intentionally omitted <==** WA.No.524 OF 2021 11 (h) x x x x x x x x x x x x x x x x (i) calling for information from, undertaking inspection, conducting inquiries and audits of the 4[stock exchanges, mutual funds, other persons associated with the securities market] intermediaries and selfregulatory organisations in the securities market; 5[(ia) calling for information and record from any bank or any other authority or board or corporation established or constituted by or under any Central, State or Provincial Act in respect of any transaction in securities which is under investigation or inquiry by the Board;]” 11. Therefore, on a reading of the said provisions it is clear that the specific powers constituted under section 11(2) is without causing any manner of prejudice to the general powers conferred under section 11(1). That apart section 11(4) provides that without prejudice to the provisions contained in sub-sections (1),(2),(2A) and (3) and section 11B, the Board may, by an order, for reasons to be recorded in writing in the interests of investors or securities market, take any of the measures delineated thereunder, either pending investigation or inquiry or on completion of such investigation or inquiry viz., direct any intermediary or any person associated with the securities market in any manner not to dispose of or alienate an asset forming part of any transaction which is under investigation. “ 12. That apart section 11A enables the Board to regulate or prohibit issue of prospectus, offer document or advertisement soliciting money for issue of securities and sub-section (1) thereto clearly specifies that without prejudice to the provisions of the Companies Act, 1956, the Board may, for the protection of WA.No.524 OF 2021 12 investors specify by a regulation (i) the matters relating to issue of capital, transfer of securities and other matters incidental thereto and (ii) the manner in which such matters shall be disclosed by the companies apart from the power to make regulations in regard to other aspects. 13. Section 11B of Act, 1992 deals with powers to issue directions subject to section 11, if the Board is satisfied that it is necessary.-- (i) in the interest of investors, or orderly development of securities market etc. The Board is also conferred with power to issue such directions to any persons or class of persons referred to in section 12 or associated with the securities market. Section 12 of the Act, 1992 deals with registration of stock-brokers, sub-brokers, share transfer agents etc. and sub-section (1) thereto specifies that no stock-broker, sub-broker, share transfer agent, banker to an issue, trustee of trust deed, registrar to an issue etc. and such other intermediaries, who may be associated with securities market, shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained from the Board in accordance with the regulations made under the Act, 1992. Other prohibitions are also created under the said provision to the functionaries dealing with the stock and share market. Therefore, taking into account the above provisions of Act, 1992, it is clear that certain definite powers are conferred on the authorities under the Act in order to deal with and regulate the stock and share market. The contention advanced by the appellant is that a non-banking WA.No.524 OF 2021 13 financial company is absolutely guided by the provisions of the Reserve Bank of India Act, 1934 and therefore, the SEBI has no power under the Act, 1992. Learned counsel for appellant in that regard has invited our attention to certain provisions of the Reserve Bank of India Act, 1934. Chapter III B of the Act deals with non-banking institutions receiving deposits and financial institutions. Section 45-H specifies that the provisions of Chapter III shall not apply to the State Bank or a banking company as defined in section 5 of the Banking Regulation Act, 1949 or a corresponding new bank as defined in clause (da) of section 5 of the Act or a subsidiary bank as defined in State Bank of India (Subsidiary Banks) Act, 1959 or a Regional Rural Bank or a Co-operative Bank or a Primary Agricultural Credit Society or a Primary Credit Society. Section 45-I(bb) defines deposit which includes and shall be deemed always to have include any receipt of money by way of deposit or loan or any other form but does not include certain amounts raised by way of share capital etc. Section 45-I(a) defines “business of a non-banking financial institution” to mean, carrying on the business of a financial institution referred to in clause (c) of section 45-I and includes business of a non-banking financial company referred to in clause (f) of section 45-I. Clause (c) defines “financial institutions” to mean, any non-banking institution which carries on as its business or part of its business any of the activities prescribed thereunder which includes, (i) the financing, whether by way of making loans or advances or otherwise, of any activity other than its own; (ii) WA.No.524 OF 2021 14 the acquisition of shares, stock, bonds, debentures, or securities issued by a Government or local authority or other marketable securities of a like nature, inter alia among others. Clause (f) thereto defines “non-banking financial company” means, (i) a financial institution which is a company; (ii) a nonbanking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner or lending in any manner etc. Sections 58-B and 58-G of the Act was referred to by learned counsel which deals with the power of the bank to impose penalties and fine respectively for violation of the provision of the Act, 1934. 14. Therefore, the attempt of the learned counsel was to impress upon us that so far as a non-banking financial company is concerned, it is guided by the provisions of the Reserve Bank of India Act, 1934 and therefore, the provisions of the SEBI Act, 1992 cannot be invoked for dealing with a transaction like the one at hand. 15. In order to understand the objectives of the Reserve Bank of India Act 1934, we resort to the objects and reasons of Act, 1934. It was an Act made to constitute a Reserve Bank of India to regulate the issue of Bank Notes and the keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage and it was brought in at a time when disorganisation of the monetary WA.No.524 OF 2021 15 systems of the world was prevalent and it was not possible to determine what will be suitable as a permanent basis for the Indian Monetary System and for other related factors. Therefore, the objectives and intention behind the Reserve Bank of India Act, 1934 is clear, to regulate the issue of Bank Notes, keeping of reserves with a view to secure monetary stability in India and generally to operate the currency and credit system of the country to its advantage. It may be true in the matter of regulation of the monetary transaction and other allied activities the Act, 1934 may be dealing with the business carried on by a nonbanking financial company, but that doesn't mean that the provisions of the said Act is in derogation of the powers conferred on SEBI under the SEBI Act, 1992. 16. On a comparison of the objects and reasons of both the statutes, it is clear that both operates on different fields. To put it otherwise when the SEBI Act, 1992 deals with enabling provisions to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto, the Reserve Bank Act, 1934 regulates the issue of Bank Notes, currency, credit system etc. of the country. Which thus means merely because for the violation of the Act, 1934 the authority thereunder is enabled with powers to impose fine for violation of the provisions of the said Act, that will not in any way interfere with the powers enjoyed by SEBI to protect the interests of the investors in securities market and the matters connected therewith or incidental thereto. WA.No.524 OF 2021 16 17. Learned counsel for appellant could not bring to our notice any provision under the Act, 1934 though it has undergone amendment successively upto 2014 and even subsequently to our knowledge, prohibiting the SEBI to carry out its function under the provisions of the SEBI Act, 1992. Moreover, the SEBI Act is a subsequent Act to the Reserve Bank of India Act, and both being Central Acts, if the Parliament in its wisdom thought that the provisions of the SEBI Act to be made subject to the provisions of the Act, 1934 or to be made subservient to it, it would have been clearly done by incorporating a specific provision thereunder. Moreover, the SEBI Act, 1992 was brought out with the legitimate purpose of protecting the interests of the investors in stocks and securities at a time when unprecedented activities were taking place in the stock and share transactions. Therefore, the picture is clear and vivid that the provisions of the Reserve Bank of India will not in any manner curb the powers conferred on the authorities under the SEBI Act, 1992. 18. Anyhow learned counsel for the appellant has invited our attention to the judgments of the Apex Court in **Union of India v. Hindalco Industries** [(2003)5 SCC 194], **Carona Limited v. Parvathy Swamynathan & Sons** [(2007) 8 SCC 559] and **Siemens Limited v. State of Maharashtra and Others** [(2006)12 SCC 33]. The judgment in **Hindalco Industries** supra was in respect of interference in tax matters under Articles 226 and 136 wherein it was held that normally in taxation matters High Court should not interfere at the WA.No.524 OF 2021 17 stage of show cause notice, but it is a self-imposed limitation and where the authority lacked jurisdiction to issue the notice and High Court preferred to entertain the writ petition under Article 226 and decided the issue on merits, Supreme Court would not interfere with the impugned order of the High Court on the technical ground that High Court should not interfere at the stage of show cause notice. In our considered opinion, the proposition of law laid down in the said judgment has no bearing at all to the issue at hand because the learned single Judge has dismissed the writ petition in limine and we are called upon in the appeal only to judge whether there was any jurisdictional error on the part of the learned single Judge in the matter of exercise of the discretionary jurisdiction. True, if the show cause notice is lacking jurisdiction absolutely on account of any prohibition created under a statute, the action so taken may become arbitrary and illegal and thus, enabling a writ court to interfere with the same. The discussion and deliberations made above would make it clear that such an eventuality is not existing in the case at hand. In **Carona Limited** supra the Apex Court was considering an issue in respect of a jurisdictional aspect vis-a-vis exemption from the operation of a Rent Act, wherein the Apex Court has drawn a distinction by and between a “jurisdictional fact and adjudicatory fact” and it was held that if it is an adjudicatory fact which is a fact in issue, it can be determined by a court, or authority on merits. The relevant portion of the said judgment is extracted hereunder: **29.** But there is a distinction between “jurisdictional fact” and “adjudicatory WA.No.524 OF 2021 18 fact” which cannot be ignored. An “adjudicatory fact” is a “fact in issue” and can be determined by a court, tribunal or authority on “merits”, on the basis of evidence adduced by the parties. It is no doubt true that it is very difficult to distinguish “jurisdictional fact” and “fact in issue” or “adjudicatory fact”. Nonetheless the difference between the two cannot be overlooked. **30.** In Halsbury's Laws of England (4th Edn.), Vol. 1, Para 55, p. 61; Reissue, Vol. 1(1), Para 68, pp. 114-15, it is stated: “There is often great difficulty in determining whether a matter is collateral to the merits or goes to the merits. The distinction may still be important; for an erroneous decision on the merits of the case will be unimpeachable unless an error of law is apparent on the face of the record of the determination or unless a right of appeal lies to a court in respect of the matter alleged to have been erroneously determined. An error of law or fact on an issue collateral to the merits may be impugned on an application for an order of certiorari to quash the decision or in any other appropriate form of proceedings, including indirect or collateral proceedings. Affidavit evidence is admissible on a disputed issue of jurisdictional fact, although the superior courts are reluctant to make an independent determination of an issue of fact on which there was a conflict of evidence before the inferior tribunal or which has been found by an inspector after a local inquiry.” **31.** In R. v. Fulham, Hammersmith and Kensington Rent Tribunal, ex p Philippe [(1950) 2 All ER 211 (DC)] it was held that the question whether premium for renewal of tenancy was or was not paid was a jurisdictional fact and, therefore, was held to be a condition precedent for the lawful exercise of jurisdiction by a Rent Tribunal. In Brittain v. Kinnaird [(1819) 1 B&B 432 : (1814-23) All ER Rep 593] however, the factum as to possession of a “boat” with gunpowder on board was held to be a part of the offence charged and thus a finding of fact or adjudicatory fact. It was stated: “The logical basis for discriminating between these cases and other falling on opposite sides of the line, is not easily discernible.” (emphasis supplied) WA.No.524 OF 2021 19 **32.** Likewise, the fact whether the petitioner was an “adult” in adoption proceedings was not held to be a “jurisdictional fact” (Eversole v. Smith [159 SW 2nd 35] ). **33.** In Chaube Jagdish Prasad v. Ganga Prasad Chaturvedi [AIR 1959 SC 492 : 1959 Supp (1) SCR 733] , the question was whether the landlord was entitled to enhancement of rent. Under the Act, he was not entitled to such rent unless a “new construction” had been made after 30-6-1946. It was held by this Court that the question whether construction was new or not was a “jurisdictional fact” and if the court wrongly decided the said fact and thereby conferred jurisdiction not vested in it, the High Court could interfere with the order. The Court stated (at AIR p. 498, para 21) that “once it had the power it could determine whether the question of the date of construction was rightly or wrongly decided”. (See also Arun Kumar v. Union of India [(2007) 1 SCC 732] . **34.** But, in Roshan Lal Mehra v. Ishwar Dass [AIR 1962 SC 646 : (1962) 2 SCR 947] this Court held that the Rent Controller had jurisdiction to fix standard rent for new construction made after 24-3-1947. The question was as to when the construction was made. The Rent Controller recorded a finding of fact that the construction was put up after 24-3-1947. The finding was confirmed by the District Judge. But the High Court interfered in revision. **35.** Setting aside the decision of the High Court, this Court stated: (Roshan Lal Mehra case [AIR 1962 SC 646 : (1962) 2 SCR 947] , AIR p. 659, para 17) “17. … It is clear from the orders of the Rent Controller and of the District Judge in appeal that the question whether the second floor was newly constructed or not was really a question of fact, though undoubtedly a jurisdictional fact on which depended the power of the Rent Controller to take action under Section 7-A. If the Rent Controller had wrongly decided the fact and assumed jurisdiction where he had none, the matter would be open to reconsideration in revision. The High Court did not, however, go into the evidence, nor did it say that WA.No.524 OF 2021 20 the finding was not justified by the evidence on record. The High Court referred merely to certain submissions made on behalf of the landlord and then expressed the opinion that what was done to the second floor was mere improvement and not a new construction. We think that the High Court was in error in interfering with the finding of fact by the Rent Controller and the District Judge, in support of which finding there was clear and abundant evidence which had been carefully considered and accepted by both the Rent Controller and the District Judge.” (emphasis supplied) **36.** It is thus clear that for assumption of jurisdiction by a court or a tribunal, existence of jurisdictional fact is a condition precedent. But once such jurisdictional fact is found to exist, the court or tribunal has power to decide adjudicatory facts or facts in issue. " 19. Therefore,it is clear that the proposition laid down thereunder would apply only when an intricate jurisdictional issue is identified by a writ court, which in our considered opinion is not existing in the case at hand. In **Siemens Limited** supra, the Apex Court considered the same question as it considered in **Hindalco Industries** supra i.e., as to whether there is any limitation in entertaining a writ petition challenging a notice, wherein it was held that when a notice is issued with pre-meditation, a writ petition would be maintainable. However, on going through Exhibit P3 show cause notice issued by the Deputy General manager of SEBI dated 13[th] March, 2020, we could not locate any such eventuality, apart from the same being explanatory in nature, enabling an aggrieved person to identify the exact violations raised against him and submit a reply understanding the gamut of the issues. Therefore , taking into account the WA.No.524 OF 2021 21 said aspects of law and facts we are of the clear opinion and view that the learned single Judge has rightly dismissed the writ petition holding that SEBI has power to initiate action against the appellant for violation of the provisions of the SEBI Act, 1992. We are also of the opinion that the minute intricacies of the issues raised in regard to the power of the Deputy General Manager of SEBI, the question of limitation etc. are all aspects to be considered by the statutory authority in terms of the provisions of Act, 1992 and the regulations thereto discussed above. That said, the issues raised by the appellant in respect of the power of the authority under the Companies Act, 1956 vis-a-vis the Companies Act, 2013 are all matters, which can be raised before the statutory authority. This we say because, from the show cause notice it is clear that the violations are relating to the years 2007-2013 during which period the Companies Act,1956 was in force. 20. Yet another point raised by learned counsel for the appellant is that the learned single Judge has entered into certain definite findings in respect of the role of the debenture trustee which may stand in the way of contesting the proceedings on the basis of Exhibit P3 show cause notice. There, we are of the view that it may be a finding rendered in view of the questions raised by the appellant and it will not have any bearing while contesting the proceedings in Exhibit P3 show cause notice. This we say because while dismissing the writ petition, it is clearly specified in the judgment that the appellant has the WA.No.524 OF 2021 22 opportunity to establish his case before the Board. We are also conscious of the fact that when the functions of an authority are regulated and controlled by clear statutory provisions and without any inhibitions created, we have no reason to think that the said authority would not adjudicate the issues in terms of law. Therefore, needless to say, the appellant is left with the liberty to take up all contentions before the statutory authority. In view of the contention raised, that copies of the documents are not served on the appellant and therefore the action is violative of the principles of natural justice, we direct SEBI to serve all copies of the documents relied upon by it to the appellant if not already served. Upshot of the above discussion is that the appellant has not made out any case to interfere with the judgment of the learned single Judge in an intra court appeal filed under section 5 of the Kerala High Court Act, 1958, there being no jurisdictional error or legal infirmities justifying us to do so, and accordingly the appeal is dismissed . Sd/- ## **S.MANIKUMAR CHIEF JUSTICE** Sd/- smv **SHAJI P.CHALY JUDGE**