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CS Professional · Drafting, Pleadings and Appearances · Adjudications and Appeals under SEBI Laws

Ravi Textiles Ltd's promoter files a civil suit in a district court seeking to restrain an adjudicating officer, appointed under the SEBI Act, from continuing an inquiry into a disclosure default. The inquiry is within the officer's powers under the Act. How will the court deal with the suit?

The civil court has no jurisdiction. Section 15Y of the SEBI Act bars civil courts from entertaining suits on matters an adjudication officer or the Securities Appellate Tribunal can determine, and also bars injunctions against actions taken or proposed under the Act.

  1. AIt may grant an interim injunction because the promoter has no other remedy
  2. BIt has no jurisdiction to entertain the suit, and no injunction can be granted in respect of action taken or to be taken under the ActCorrect
  3. CIt may hear the suit but only after the Securities Appellate Tribunal permits it
  4. DIt may decide the suit if the claim is below a prescribed monetary limit

Explanation

Section 15Y bars civil courts from entertaining any suit or proceeding on a matter that an adjudication officer or the Securities Appellate Tribunal is empowered to determine. It also bars any injunction against action taken or to be taken under the Act. The option allowing an interim injunction contradicts this bar.

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