Pina Pankaj Shah vs Matrix Merchandise Limited - Interim Applications

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Pina Pankaj Shah And Anr. vs Matrix Merchandise Limited And 8 Ors. on 25 March, 2026

Author: R.I. Chagla

Bench: R.I. Chagla

2026:BHC-OS:7240-DB

                                                RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

             Kavita S.J.

                         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                             ORDINARY ORIGINAL CIVIL JURISDICTION

                           INTERIM APPLICATION (L) NO. 40029 OF 2025
                                              IN
                              WRIT PETITION (L) NO. 39034 OF 2025

             Ashok Dayabhai Shah & Ors.,                           ...Applicants

             In the matter between:

             Bharat Nidhi Limited                                  ....Petitioner

                     Versus

             SEBI & Ors.                                           ...Respondents

                                             WITH
                           INTERIM APPLICATION (L) NO. 40053 OF 2025
                                              IN
                              WRIT PETITION (L) NO. 39034 OF 2025

             Pina Pankaj Shah & Anr.,                              ...Applicants

             In the matter between:

             Bharat Nidhi Ltd.                                     ....Petitioner

                     Versus

             SEBI & Ors.                                           ...Respondents

                                             WITH
                           INTERIM APPLICATION (L) NO. 40000 OF 2025
                                              IN
                              WRIT PETITION (L) NO. 39246 OF 2025

                                             1/49

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Ashok Dayabhai Shah & Ors., ...Applicants

In the matter between:

Ashoka Marketing Limited & Anr., ....Petitioners

  Versus

SEBI & Ors. ...Respondents
WITH
INTERIM APPLICATION (L) NO. 40048 OF 2025
IN
WRIT PETITION (L) NO. 39246 OF 2025

Pina Pankaj Shah & Anr., ...Applicants

In the matter between:

Ashoka Marketing Limited & Anr., ....Petitioners

  Versus

SEBI & Ors. ...Respondents

                                   WITH
      INTERIM APPLICATION (L) NO. 40017 OF 2025
                         IN
         WRIT PETITION (L) NO. 39354 OF 2025

Ashok Dayabhai Shah & Ors., ...Applicants

In the matter between:

Matrix Merchandise Limited & Ors., ....Petitioners

  Versus

SEBI & Ors. ...Respondents

                                    2/49

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                             WITH
           INTERIM APPLICATION (L) NO. 40047 OF 2025
                              IN
              WRIT PETITION (L) NO. 39354 OF 2025

Pina Pankaj Shah & Anr., ...Applicants

In the matter between:

Matrix Merchandise Limited & Ors., ....Petitioners

     Versus

SEBI & Ors. ...Respondents
----------
Mr. Navroz Seervai, Senior Counsel a/w Ms. Arti Raghavan, Mr Pulkit
Sukhramani, Ms. Samreen Fatima and Mr. Juan Dsouza i/b JSA for
Applicant/s in IAL/40029/2025, IAL/40000/2025 and
IAL/40017/2025.

Mr. Gaurav Joshi, Senior Counsel a/w Mr Kunal Katariya i/b Ms
Garima Mehrotra for Applicant/s in IAL/40047/2025,
IAL/40048/2025, and IAL/40053/2025.

Mr. Janak Dwarkadas, Senior Counsel a/w Mr. Ameya Gokhale, Mr.
Rishabh Jaisani, Mr. Harit Lakhani, Mr. Ansh Kumar, Ms. Anushka
Bhardwaj and Ms. Swarupini Srinath i/b. Shardul Amarchand
Mangaldas & Co. for Petitioners in WPL/39354/2025.

Mr. Venkatesh Dhond, Senior Counsel a/w Mr. Ameya Gokhale, Mr.
Rishabh Jaisani, Ms. Karishma Rao, Mr. Harit Lakhani, Mr. Ansh
Kumar, Ms. Anushka Bhardwaj and Ms. Swarupini Srinath i/b
Shardul Amarchand Mangaldas & Co. for Petitioner in
WPL/39034/2025.

Mr. Ashish Kamat, Senior Counsel a/w Mr. Ameya Gokhale, Mr.
Rishabh Jaisani, Mr. Harit Lakhani, Mr. Ansh Kumar, Ms. Anushka

                              3/49

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Bhardwaj and Ms. Swarupini Srinath i/b Shardul Amarchand
Mangaldas & Co. for Petitioners in WPL/39246/2025.

Mr. J.J. Bhatt, Senior Counsel a/w Mr Vishal Kanade, Mr. Mihir Mody
and Mr. Yash Sutaria i/b. K. Ashar & Co. for Respondent - SEBI in
WPL/39034/2025.

Mr. Vishal Kanade a/w Mr. Mihir Mody and Mr. Yash Sutaria i/b K.
Ashar & Co. for Respondent - SEBI in WPL/39354/2025 and
WPL/39246/2025.
----------

                        CORAM : R.I. CHAGLA AND
                                ADVAIT M. SETHNA, JJ.
                RESERVED ON : 26th FEBRUARY, 2026.

           PRONOUNCED ON : 25th MARCH, 2026.

ORDER: (Per R.I. Chagla, J.)

1. By these Interim Applications, the Applicants who are

minority shareholders of the respective Petitioner companies have

sought impleadment as party Respondents in the respective Writ

Petitions.

1. The respective Writ Petitions have impugned Order dated

17th November, 2025 ("Revocation Order" / "Impugned Order")

passed by Securities and Exchange Board of India ("SEBI"), whereby

Order dated 12th September, 2022 ("Settlement Order"), which

settles the allegations against the Petitioners, contained in Show 4/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

Cause Notice ("SCN") dated 28th October, 2020 has been revoked.

1. These Interim Applications filed in the respective

Petitions were heard together as they have been filed by the

Applicants who are minority shareholders of the respective

companies and original Complainants who had instituted

proceedings when the Applicants claimed that SEBI failed to act on

their complaints for over a period of six years.

1. The Applicants state that their complaints led to SEBI

issuing a SCN pursuant to the orders passed by the Securities

Appellate Tribunal ("SAT") and confirmed by the Supreme Court in

proceedings instituted by the Applicants. It is the Applicants' case

that their complaints were borne out from SEBI's SCN, which prima

facie found that the Petitioners were in violation of disclosure

requirements relating to promoters ("Disclosure Requirements") and

minimum public shareholding ("MPS") Norms.

1. The Applicants who were aggrieved by SEBI not

pursuing its SCN, and accepting settlement applications filed by the

Petitioners, had challenged the Settlement Order in Writ Petition

No.530 of 2023 filed before this Court inter alia contending that the 5/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

Settlement Order was illegal, ultra vires the SEBI (Settlement

Proceedings) Regulations, 2018 ("Settlement Regulations") and that

the Settlement Order stood revoked by operation of law on account

of the Petitioner's failure to comply with its terms.

1. The Applicants state that in the Writ Petition No.530 of

2023, there was no finding that the Applicants were "strangers" to

the Settlement Order, and that they had no locus standi to assail it.

To the contrary, the Applicants were granted significant interim

reliefs including: (i) a stay on measures taken by the Petitioner -

Bharat Nidhi Limited ("BNL") in pursuance of the Settlement Order;

(ii) the Applicants were in fact found to be entitled to wide-ranging

disclosures of documents (including internal SEBI documents and

files) relating to the settlement applications and the Settlement

Order.

1. The Applicants have further stated that the orders of

disclosure obtained in their Writ Petition No.530 of 2023 were

resoundingly confirmed by the Supreme Court (despite the

Petitioners having appealed against the disclosure order inter alia on

the ground that the Applicants lacked locus standi i.e. 'are strangers 6/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

to the settlement applications'). By a subsequent order of the

Supreme Court, it was clarified that the Applicants were entitled to

use the documents obtained through the disclosure orders (that

relate to the Settlement Order) in inter partes proceedings, further

affirming the Applicants' rights and interests in these proceedings.

1. The Applicants have submitted that as to the issue of

revocation of the Settlement Order on the ground of failure to

comply with its terms, it was the Applicants (during the proceedings

in Writ Petition No.530 of 2023) that first highlighted that BNL had

violated its undertaking in the Settlement Order, and that the order

would stand revoked by operation of law. SEBI in fact had failed to

act on this violation for almost half a year. Even after the Applicants

highlighted the non-compliance, SEBI failed to act, thus displaying

the long standing collusion between the Petitioners and SEBI (and

underscoring the importance of the Applicants' impleadment in these

proceedings). It is the Applicants' submission that SEBI only

eventually revoked the Settlement Order, in an apparent attempt to

avoid complying with the orders of disclosure passed in Writ Petition

No.530 of 2023.

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1. The Applicants state that they have been parties in each

round of proceedings before this Court and the Supreme Court

relating to the Settlement Order i.e. since 2022. They have relied

upon earlier round of proceedings instituted by the Petitioners

(challenging the revocation of the Settlement Order by an earlier

order of SEBI), wherein the Applicants were impleaded without

objections from the Petitioners (or SEBI). The Applicants accordingly

submitted that the Petitioners are estopped from objecting to the

Applicants' impleadment in the present Writ Petitions.

1. The Applicants have submitted that the Petitioners'

strenuous opposition to their impleadment in these proceedings is

thus utterly malafide, in bad faith, and a desperate attempt to shut

out vital issues and documents that are essential for the proper and

complete adjudication of the captioned Petitions.

1. Mr. Navroz Seervai, learned Senior Counsel supported by

Mr. Gaurav Joshi, learned Senior Counsel, has made submissions on

behalf of the Applicants.

1. Mr. Seervai has submitted that the Petitioners' contention

that the Applicants are only concerned with the "merits" of the 8/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

allegations against the Petitioners in the SCN, and with the

Settlement Order or its revocation is utterly misconceived and

untenable. He has submitted that the Applicants as shareholders of

the Petitioners are vitally affected by the outcome of proceedings. He

has submitted that should the captioned Writ Petitions be allowed

(and the Settlement Order restored / revived), the Applicants' rights

and interests as minority shareholders in the respective Petitioner

companies would be vitally and prejudicially affected. He has

submitted that the restoration of the Settlement Order would allow

the Petitioners and its Undisclosed Promoters to continue

perpetuating the violations alleged in the SCN to the detriment of the

rights of the public shareholders of the Petitioners including the

Applicants and evade consequential obligations under law. The public

shareholders of the Petitioners would continue to be deprived of their

legitimate rights (including securing liquidity and price discovery).

Thus, the interests of the Applicants would be directly and vitally

affected if the Revocation Order is set aside and quashed in the

captioned Petitions.

1. Mr. Seervai has placed reliance upon the Judgment of

the Supreme Court in Prabodh Verma and Ors., Vs. State of Uttar 9/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

Pradesh & Ors.,1 at Paragraph 28. The Supreme Court has held that

the High Court ought not to decide a Writ Petition under Article 226 of the Constitution without the persons who would be vitally affected

by its Judgment being before it as Respondents or at least by some of

them being before it as Respondents. The Supreme Court in the facts

of that case held that the Allahabad High Court ought not to have

proceeded to hear and dispose of the Sangh's Writ Petition without

insisting upon the reserve pool teachers being made Respondents to

that Writ Petition, or at least some of them being made Respondents

in a representative capacity, and had the Petitioners refused to do so,

the Court ought to have dismissed that Petition for non-joinder of

necessary parties.

1. Mr. Seervai supported by Mr. Joshi has submitted that

the disclosure orders secured by the Applicants confirm that the

settlement proceedings are not a private issue between SEBI and the

Petitioners, and that minority shareholders such as the Applicants are

directly and vitally concerned and affected by these proceedings, and

are entitled to be impleaded in proceedings concerning the

settlement. He has referred to Writ Petition No.530 of 2023 which

1 (1984) 4 SCC 251 10/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

had been filed by the Applicants seeking disclosure of the

Investigation Report, SCN and all proceedings in connection with the

Settlement Order. The disclosure had been granted by this Court to

the Applicants, notwithstanding the strenuous objections/contentions

as to confidentiality raised by the Petitioners. He has submitted that

if the issue as to the settlement proceedings was purely between the

regulator and the Petitioners (as the Petitioners suggest in their

Replies), the Applicants would not be considered as entitled to these

documents. He has submitted that whilst disclosure of the documents

was strenuously opposed by the Petitioners, there was no objection

on the ground of the Applicants lacking standings, or being strangers

to the settlement. The objection was on the grounds that these

documents were to be treated as confidential in terms of Regulation

29 of the Settlement Regulations. This Court rejected this objection,

inter alia on the grounds that Regulation 29 only protected the

documents from disclosure to the public, and the Applicants, as

minority shareholders of the companies, were ".... integral to the

company, having an inextricable concern and interest in the

functioning and management of the company ." This Court also

emphasized that SEBI is required to act while considering ".... the

paramount interest of investors. " He has submitted that it is for the 11/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

reason that the settlement order between the regulator and the

noticees to the settlement cannot be viewed as a private lis, and must

be examined for its implications on the rights and interests of

minority investors such as the Applicants.

1. Mr. Seervai has submitted that in the course of the

proceedings in Writ Petition No.530 of 2023 the Applicants

highlighted the Petitioner's failure to comply with the terms of the

Settlement Order, and contended that the legal consequence of this

failure was that the Settlement Order stood revoked by operation of

law (Regulation 28, Settlement Regulations). This was done by way

of an amendment to the Petition filed by the Applicants in the said

Writ Petition.

1. Mr. Seervai has submitted that the revocation of the

Settlement Order on 10th November, 2023 occurred in the context

and during the course of proceedings instituted by the Applicants and

in fact, the revocation appeared to be prompted by an interlocutory

disclosure order passed by this Court, that both SEBI and the

Petitioners desired to avoid complying with. They relied on the

revocation (unsuccessfully) to contend that nothing survived in the 12/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

said Petition. The impugned Order was passed pursuant to an order

of the Supreme Court dated 6th October, 2025 in Special Leave

Petition filed by the Applicants.

1. Mr. Seervai has relied upon the fact that the Applicants

were admittedly impleaded - without contest from the Petitioners or

SEBI - in the earlier writ proceedings filed by the Petitioners (Writ

Petition No.3977 of 2024 and tagged Petitions) to challenge the

revocation of the Settlement Order in November, 2023. Neither SEBI

nor the Petitioners objected to the Applicants' impleadment. He has

submitted that this agreement of the parties to the impleadment

amount to judicial admissions by the Petitioners and SEBI as to the

right of the Applicants to be impleaded in proceedings that relate to

the Settlement Order, including proceedings in respect of its

revocation.

1. Mr. Seervai has submitted that the Petitioners have failed

to demonstrate how the present proceedings are distinct from the

proceedings in Writ Petition No.3977 of 2024 and tagged Petitions

(which also challenged revocation of the Settlement Order). He has

submitted that if the Petitioners recognized and admitted to the 13/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

Applicants' right to be impleaded in the earlier proceedings, they are

estopped from objecting to the same in the present proceedings.

1. Mr. Seervai has placed reliance upon the Judgment of

the Supreme Court in [Udit Narain Singh Malpaharia Vs. Additional

Member Board of Revenue, Bihar and Anr.](https://indiankanoon.org/doc/1401120/),2 at Paragraphs 9 and 10.

The Supreme Court has determined the concept of "necessary

parties" and "proper parties". The Supreme Court has held that a

successful party is required to be made a party before the Court,

particularly where in a writ of certiorari the defeated party seeks for

the quashing of the order issued by the tribunal in favour of the

successful party. Such party is a necessary party and the Petition filed

for the issue of a writ of certiorari without making him a party or

without impleading him subsequently, if allowed by the Court, would

certainly be incompetent. A party whose interest are directly affected

is therefore, a necessary party. The Supreme Court has also held that

parties who may be described as proper parties i.e. parties whose

presence is not necessary for making an effective order, but whose

presence may facilitate the setting of all the questions that may be

involved in the controversy. The question of making such a person as

2 1962 SCC OnLine SC 130 14/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

a party to a writ proceeding depends upon the judicial discretion of

the High Court in the circumstances of each case. Either one of the

parties to the proceeding may apply for the impleading of such a

party or such a party may suo motu approach the Court for being

impleaded therein.

1. Mr. Seervai has submitted that the Settlement Order

having been revoked would make the Applicants as successful

parties. This in view of their challenge to the Settlement Order

which has resulted in its revocation.

1. Mr. Seervai has submitted that a salient fact that the

Petitioners have suppressed from this Court in the Petitions is that the

term of the Settlement Order that the impugned Order finds had not

been complied with was proposed by the Petitioners itself as a

"voluntary undertaking". The settlement term in question required

that BNL make such an exit offer to all shareholders for a period of 3

months promptly after receiving the Settlement Order, at the

stipulated price. Compliance with this term was to be reported within

15 days of the Settlement Order i.e. by 27 th September, 2022. BNL

proposed this term in correspondence with SEBI over 9 months 15/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

before the Settlement Order was finalized and issued. BNL's exit offer

could only be availed of by 1.067% of its shareholders. It is evident

that at the time of proposing this term BNL was aware of these

statutory restrictions, but voluntarily and consciously proposed a

settlement term that it knew could not be complied with. He has

submitted that BNL had clearly entered into the Settlement Order

with the fraudulent intention. This is a relevant consideration that

ought to be placed before this Court while it exercises its

discretionary jurisdiction under Article 226.

1. Mr. Seervai has submitted that the Applicant's

impleadment will enable this Court to appreciate certain facts and

circumstances that are vital to the adjudication of the subject

Petitions, viz. that the Settlement Order itself is an exemplar of

collusion between the Petitioners and SEBI and the Petitioners'

disingenuous reliance on SEBI's inaction to assail the impugned

Order.

1. Mr. Seervai has submitted that the Petitioners' allegations

as to Applicants' motives have been unsuccessfully raised on multiple

prior occasions. BNL has alleged that the Ashok Shah group have 16/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

approached the Court / Tribunal with unclean hands / trying to

extort higher values of the shares of BNL in the Affidavits /

Submissions in the earlier proceedings.

1. Mr. Seervai has submitted that the Applicants have a

right and interest in these proceeding i.e. independent to that of the

regulator, in particular the provision in the settlement order relating

to the exit offer to public shareholders of BNL. He has referred to the

Settlement Order under which the BNL was to provide an exit offer

on specific terms, failing which the Settlement Order would stand

revoked against all the Petitioners. The exit offer was a "voluntary

undertaking" by BNL. By its plain terms, an exit should be offered to

all public shareholders. BNL's case is that it has no promoters, so

100% of its shareholders are public, and should have made this offer

within 15 days of the Settlement Order. Instead, an offer was only

made to 1.067%. He has submitted that the revocation is on account

of BNL's failure to comply with this very requirement. The Applicants

are directly affected in the adjudication of such an issue. He has

submitted that the contention of the Petitioners' that the Applicants

did not tender their shares in the exit offer made by BNL pursuant to

the Settlement Order is immaterial. Given that the buy-back offer 17/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

was only for 1.067% of the entire shareholding, it would be

meaningless to tender shares. He has submitted that the fact that the

Applicants did not participate in the exit offer made pursuant to the

Settlement Order does not foreclose its right to participate in these

proceedings and seek compliance with the relevant laws, including

Regulation 28 of the Settlement Regulations which provides that

settlement orders shall stand revoked upon non-compliance.

1. Mr. Seervai has submitted that the Applicants would be

bound by the determination in these proceedings as to whether BNL

has complied with the terms of the Settlement Order to provide an

exit to all public shareholders. He has placed reliance upon Judgment

of the Supreme Court in Aliji Momonji v Lalji Mavji,3 at Paragraph 5

in support of its contention that the Applicants are necessary parties. He has also placed reliance upon the Judgment of the Supreme Court

in Kasturi Vs. Iyyamperumal & Ors,4 at Paragraph 7, which has also

been relied upon by the Petitioners in support of his contention that

even applying the test laid down in the said Judgment, given that the

public shareholders have rights under the Settlement Order, they are

the necessary parties.

3(1996) 5 SCC 379
4(2005) 6 SCC 733 18/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

1. Mr. Seervai has submitted that it is well settled that even

if there is a authority that carries out the objects of a statute, the

principal beneficiaries of the law have a right to be heard. In this

context he has placed reliance upon the Judgment of the Supreme

Court in [Fertilizers & Chemicals Tranvancore Ltd. Vs. Regional

Director, Employees' State Insurance Corporation & Ors.,5](https://indiankanoon.org/doc/1083624/) at

Paragraph 5 - 9. He has also placed reliance upon the Judgment of

the Supreme Court in Prabodh Verma (Supra) where the State of

Uttar Pradesh chose not to challenge a Judgment of the Allahabad

High Court that struck down a law passed by it, the Supreme Court

held that the persons affected (on whose behalf the proceedings were

being contested by the State) ought to have been heard.

1. Mr. Seervai has submitted that the Applicants as minority

shareholders of a company have an independent right to be heard on

the issue of revocation. He has submitted that even under Order 1

Rule 8(3) of the Code of Civil Procedure, 1908 (" CPC ") when a Suit

is instituted or defended by a party in a representative capacity, any

person on whose behalf or for whose benefit the proceedings are

instituted / defended may apply to the Court to be made a party.

5(2009) 9 SCC 485 19/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

1. Mr. Seervai has submitted that the principles under CPC in respect of impleadment of necessary or proper parties, do not

apply strictly to writ proceedings (Section 141 CPC). It is well settled

that Article 226 of the Constitution vests High Courts with

extraordinary powers, and that these proceedings need not adhere

procedurally to the strict requirements of the CPC.

1. Mr. Seervai has submitted that Rule 644 of the Bombay

High Court (OS) Rules (that relates to the issue of writs under [Article

226](https://indiankanoon.org/doc/1712542/) of the Constitution (other than Habeas Corpus)) provides that if

any person who is not a party to the proceeding desires to be heard

on the application and it appears to the Court that he has a

substantial interest in the dispute or the question to be decided

therein and is a proper person to be heard, the Court may allow him

to appear on such terms and conditions as it thinks proper.

1. Mr. Seervai has submitted that the relevant test is

whether the party has a "substantial interest in the dispute or the

question to be decided". The Court is entitled to exercise its

discretion and determine this, and is not bound by whether the

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1. Mr. Seervai has submitted that the Petitioners' reliance

on the fact that the Applicants were not heard before SEBI on the

issue of revocation is irrelevant. This contention amounts to an

impermissible conflation between the principles of natural justice

(which it is well settled may be waived), and the issue of locus

standi. He has submitted that if the Applicants had the right /

standing to press the contention in WP 530 of 2023 that the

Settlement Order stands revoked (by virtue of non-compliance), they

also have the right to be heard in a Petition where the revocation is

being assailed. The Applicants were not parties to or heard in respect

of the settlement applications. However, they were not seen as

lacking locus standi to assail to Settlement Order. He has submitted

that it is only today that the Petitioners have sought to claim that the

Applicants didn't have locus to challenge the Settlement Order. The

Petitioners' contention is contrary to the pleadings filed by them in

the said proceedings.

1. Mr. Seervai has submitted that the Applicants are not

aggrieved by hearing not having been granted by SEBI since the

Settlement Order was revoked. However, the Applicants would be

aggrieved if the present proceedings culminated in the Revocation 21/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

Order being quashed. He has accordingly submitted that the

Applicants are required to be impleaded in the captioned Petitions to

protect their rights and interest.

1. Mr. Janak Dwarkadas, learned Senior Counsel appearing

for the original Petitioners / Respondents in Interim Application (L)

No. 40017 of 2025 has submitted that the Applicants are (i) strangers

to the present proceedings, (ii) have not been heard by SEBI, (iii)

have no interest in the subject matter of the Writ Petition and (iv) are

not even remotely affected by the outcome of the present Writ

Petition.

1. Mr. Dwarkadas has submitted that even if the Petitioners

succeed in the Writ Petition and the Revocation Order is set aside by

this Court, the Applicants will have their remedy to file independent

proceedings to challenge the Settlement Order / agitate their

grievances pertaining to the violations of the SCN, if they wish to do

so. Therefore, the presence of the Applicants is neither necessary nor

desirable in the present proceedings.

1. Mr. Dwarkadas has submitted that the Applicants are

disgruntled shareholders who had approached this Court with 22/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

unclean hands and ulterior motives and cannot claim any equities in

their favour. He has submitted that the Applicants seek to expand the

scope of a limited regulatory challenge into a broader dispute, which

is unsustainable at the stage of testing the legality of the Revocation

Order. The Applicants under the garb of espousing minority

shareholder interest, only seek to extract a higher and unreasonable

value for the shares held by them in the BNL and have also stalled

the exit offers for the other non-litigant shareholders.

1. Mr. Dwarkadas has submitted that the Applicants have

sought to interdict / disrupt BNL's attempt to provide an exit offer to

all shareholders, in 2022 and 2025, including under the Settlement

Order. Importantly, the Applicants themselves did not tender their

shares during the exit process initiated in 2019, 2022 and 2025.

1. Mr. Dwarkadas has submitted that a necessary party is a

person in whose absence no effective order can be passed by the

Court. Whereas a proper party is a person whose presence would

enable the Court to effectively adjudicate the disputes before it. He

has in this context placed reliance upon the Judgment of the

Supreme Court in Mumbai International Airport Private Limited Vs 23/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

Regency Convention Centre and Hotels Private Limited6 at Paragraph

13 -15.

1. Mr. Dwarkadas has submitted that the Applicants do not

meet the threshold as laid down in the said Judgment as they are

neither necessary nor proper parties to the Writ Petition.

1. Mr. Dwarkadas has submitted that the captioned Writ

Petition challenges the Revocation Order passed by SEBI revoking the

Settlement Order. The scope of determination in the Writ Petitions

are narrow and limited to the compliance or non-compliance of the

Settlement Order by the Petitioners. This is a lis between Petitioners

and SEBI and will be decided based on the findings of SEBI in the

Revocation Order. Thus, SEBI is the only proper, competent and sole

Respondent required to defend its decision contained in the

Revocation Order which is impugned in the Petition. There is

therefore no question of joinder of any third party, much less the

Applicants.

1. Mr. Dwarkadas has submitted that the Applicants'

presence is neither necessary nor proper to explain, supplement or

6 2017 7 SCC 417 24/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

supplant SEBI's reasons, which are contained in the Revocation

Order. He has placed reliance upon the Judgment of the Supreme

Court in [Mohinder Singh Gill Vs. Chief Election Commissioner New

Delhi7](https://indiankanoon.org/doc/1831036/), at Paragraph 8 in this context.

1. Mr. Dwarkadas has submitted that importantly, the

Applicants were never part of the deliberations/hearing leading up to

passing of the (i) Settlement Order or (ii) the Revocation Order

(which is under challenge in the Writ Petition). The Order dated 6th

October 2025 passed by the Supreme Court also recognised SEBI's

primacy and independence in deciding and defending its orders and

did not pass any directions qua grant of hearing to the Applicants,

which underscores that the present contest in the Writ Petition is

squarely between the Petitioners and SEBI. He has also referred to

the Letter dated 17th October, 2025 addressed by the Applicants to

SEBI requesting a hearing in respect of the revocation of the

Settlement Order. However, admittedly, no such hearing was granted

to the Applicants by SEBI. He has submitted that the Applicants did

not challenge this refusal by SEBI, despite their claim of having vital

interest in the proceedings, and neither did they approach the Courts

7(1978) 1 SCC 405 25/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

to seek an opportunity of hearing by SEBI. This demonstrates that the

Applicants have no role to play with respect to the revocation of the

Settlement Order/passing of the Revocation Order, which is the

subject matter of the Writ Petition.

1. Mr. Dwarkadas has submitted that if the Applicants are

aggrieved by any act of SEBI, it is open for the Applicants to

challenge such action. However, they cannot claim to have a vested

right to implead themselves in proceedings which are purely between

the Petitioners and the regulator, SEBI.

1. Mr. Dwarkadas has submitted that by the Order dated 1 st

December 2023 passed by this Court in the prior Applicants' Writ

Petition, whilst disposing of the Writ Petition had expressly kept open

rights of the Applicants with respect to their grievances qua (i) the

violations alleged in the SCN as well as (ii) the Settlement Order to

be agitated at the appropriate time in appropriate proceeding. He

has submitted that clearly the Applicants' right to agitate any issue is

not taken away and has been expressly kept open by this Court.

Further, the issue of whether the Settlement Order was valid or could

have been passed by SEBI is not in question in the present Writ 26/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

Petition, and can be agitated by the Applicants, if the need arises. He

has submitted that the cause of action of the prior Applicants' Writ

Petitions and present Writ Petition are completely different.

Therefore, the Applicants are not vitally interested in the present Writ

Petition and their right to agitate their grievances, including qua the

Settlement Order, would not be foreclosed by any orders passed in

the present Writ Petition (including if the Petitioners were to succeed

in their challenge to the Revocation Order).

1. Mr. Dwarkadas has submitted that the disclosure of

documents granted by Order dated 23 rd October, 2023 was related to

the subject matter of the prior Applicants Writ Petitions i.e. challenge

to the validity of the Settlement Order. The entitlement of the

Applicants to certain documents in proceedings instituted by them

(wherein the scope of the proceeding was distinct) is an irrelevant

factor and cannot be construed to mean that the Applicants have

locus in the present Writ Petition.

1. Mr. Dwarkadas has submitted that the Applicants are

accordingly neither necessary nor proper parties to the present Writ

Petition and ought not to be impleaded or else allowing the 27/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

Applicants to implead themselves in the present proceedings would

protract the litigation and expand the scope of the Writ Petition.

1. Mr. Dwarkadas has submitted that the reliance placed by

the Applicants on their impleadment in the previous Writ Petitions

challenging the previous Revocation Order is erroneous. The Order

dated 25th January, 2024 which impleaded the Applicants in the

previous Writ Petitions was based on the consent/concession of the

Petitioners. Such an order, which is based on a party's consent is not

a precedent and has no binding force.

1. Mr. Dwarkadas has submitted that there is a fundamental

distinction between the previous Writ Petitions and the present Writ

Petitions. It was the Petitioners' case that the previous Revocation

Order (which was challenged by the Previous Writ Petition) was a

knee jerk reaction by SEBI in order to evade compliance of the

disclosures directed under the Order dated 23rd October 2023. This

has also been acknowledged by the Applicants in their submissions.

1. Mr. Dwarkadas has submitted that as a contrast, the

present Writ Petition challenges the Revocation Order which is a

detailed order that has been passed after hearing the Petitioners. The 28/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

Revocation Order has nothing to do with the Order dated 23rd

October 2023 passed in the Prior Applicant Writ Petitions. The

Revocation Order will be tested on the basis of the reasons contained

therein and the Applicants certainly have no role play in the present

Writ Petition.

1. Mr. Dwarkadas has submitted that the ealier

impleadment by consent in a distinct proceeding (Previous Writ

Petition), based on distinct grounds of challenge, does not create a

precedent or entitlement in favour of the Applicants to be joined in

every subsequent proceeding, including the present Writ Petition.

1. Mr. Dwarkadas has distinguished the Judgments cited by

the Applicants viz. Prabodh Verma (Supra) and Udit Narain (Supra)

on the ground that these decisions dealt with instances where the

order/decision under challenge had been passed in favour of certain

parties such as reserve pool teachers and licensees. In essence, the

subject matter of those cases was a lis between the Petitioners therein

and the successful parties such as reserve pool teachers and licensees.

Therefore, the Supreme Court in the said cases held that such parties

who were successful (since orders/decisions had been taken in their 29/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

favour) and necessary, would need to be joined since the

order/decision under challenge directly affected them.

1. Mr. Dwarkadas has submitted that in the present case, (i)

the Applicants are not successful parties in whose favour a decision

has been taken, (ii) the Applicants are neither necessary nor

desirable for the adjudication of the Writ Petition, (iii) there is no lis

between the Petitioners and the Applicants which is the subject

matter of the Writ Petition, and (iv) any order passed in the Writ

Petition will not in any manner affect the rights of the Applicants.

1. Mr. Dwarkadas has submitted that the Applicants'

contention that they are successful parties is a red herring and an

attempt to self-credit themselves and is completely bogus. The fact

that the Applicants are not successful is evident from the fact that the

prior Applicant's Writ Petitions were disposed of without any

adjudication on merits. Further, the Applicants' contention that prior

Applicants' Writ Petitions were amended to contend that the

Settlement Order stands automatically revoked is completely

irrelevant and a red herring. As per the Applicants themselves SEBI

revoked the Settlement by the Previous Revocation Order, as a knee- 30/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 :::

RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

jerk reaction to the Order dated 23rd October 2023. Therefore, the

revocation of the Settlement Order had nothing to do with the

Applicants' amendment to the prior Applicants' Writ Petitions

contending automatic revocation.

1. Mr. Dwarkadas has submitted that the Applicants are

attempting to conflate two distinct proceedings and cause of actions.

The present Revocation Order is an independent order that has been

passed by SEBI for the reasons contained therein and has no

connection with the Applicants. Pertinently, there is no adjudication

that the Revocation Order is a result of the Applicants' efforts.

1. Mr. Dwarkadas has submitted that in the event, the

Revocation Order is set aside in the present Writ Petition, the legal

consequence would be that the Settlement Order stands revived. At

that stage, it would be open to the Applicants to take appropriate

actions to agitate their grievances qua the Settlement Order, in terms

of the Order dated 1st December 2023 (or even independently

dehors the liberty granted by the said order).

1. Mr. Dwarkadas has distinguished the Judgment relied

upon by the Applicants viz. Aliji Momonji (Supra) as wholly 31/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

inapplicable in the present case. In the said case, it was held that

since a landlord has a substantial and direct interest in the building,

the demolition of the same would materially affect the right, title and

interest of the landlord and bind the landlord. In the present case,

the Applicants have no substantial or direct interest in the Writ

Petition and can avail its independent remedy, if the need arises.

1. Mr. Dwarkadas has submitted that SEBI, under a

statutory mandate (in all cases), acts in the interest of the minority

shareholders/investors. The Applicants' interests would therefore be

sufficiently represented through SEBI. In the present Writ Petition,

SEBI will defend the Revocation Order passed by it. He has [placed

reliance upon](https://indiankanoon.org/doc/907884/) the statement and objects of the SEBI Act. In this

context he has submitted that to permit the Applicants' intervention

will be to place some element of doubt on the integrity of the

regulator and the ability of this Court to arrive at a fair determination

on whether there is compliance of the Settlement Order or not, in the

absence of third parties.

1. Mr. Dwarkadas has distinguished the Judgment relied

upon by the Petitioners viz. Fertilizers & Chemicals (Supra) on facts 32/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

and he has submitted that this Judgment is wholly inapplicable in the

present case. In that case, this Court held that the ESI Court ought to

have determined whether certain persons were employees or not to

whom benefit by ESIC could be extended. It is in this context the

Court held that the persons/employees ought to have been

impleaded. The ESIC is merely an agency to implement and has

nothing to lose if the decision is given against the employees. This

certainly cannot be equated with SEBI which in addition to

regulating the securities market, acts in the interest of the investors.

1. Mr. Dwarkadas has submitted that in so far as Rule 644

of the OS Rules which has been relied upon by the Applicants, this

Rule does not come to the aid of the Applicants as they neither have

any substantial interest nor are proper parties to be heard. In fact,

clearly, the OS Rules enshrine the principles of proper and necessary

party enshrined in the CPC. Therefore, the reliance on OS Rules is to

the benefit of the Petitioners.

1. Mr. Dwarkadas has submitted that in [Public Service

Commission, Uttaranchal v. Mamta Bisht and Others8](https://indiankanoon.org/doc/518824/) at Paragraph 9-

10, after considering Prabodh Verma (Supra) and Udit Narain

8(2010) 12 SCC 204 33/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

(Supra), the Supreme Court has held that the principles enshrined in CPC are applicable to the Writ Petitions.

1. Mr. Venkatesh Dhond, learned Senior Counsel appearing

for the Respondents in Interim Application (L) No.40029 of 2025 in

Writ Petition (L) No.39034 of 2025 has supported the submissions of

Mr. Dwarkadas. He has submitted that the Applicants cannot claim

credit for the actions or measures taken by SEBI. He has submitted

that the present proceedings filed by the Petitioners challenging the

decision of SEBI to revoke the Settlement Order by way of the

impugned order / Revocation Order is not on the basis of the

complaint made by the Applicants, but on a decision taken by SEBI to

revoke the settlement order. The Applicants have no role whatsoever

on the revocation of the Settlement Order.

1. Mr. Dhond has submitted that the decision of SEBI to

revoke the Settlement Order is for reasons / identified grounds stated

in the decision i.e. the impugned Order / Revocation Order, itself.

The stated decision is that BNL did not comply with the Settlement

Order. The correctness of the decision of revocation has to, therefore,

be tested on the basis of the reasons given in the impugned Order / 34/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

Revocation Order itself. He has also placed reliance upon [Mohinder

Singh Gill](https://indiankanoon.org/doc/1831036/) (Supra) in this context.

1. Mr. Dhond has submitted that the only enquiry that this

Court, therefore has to do so is to determine whether there is non

compliance by BNL of the conditions imposed in the Settlement

Order or not. This is an enquiry which needs only two participants

viz. (i) BNL, which asserts that the finding of non-compliance is

incorrect and (ii) SEBI, which asserts that the finding of non-

compliance is correct.

1. Mr. Dhond has submitted that the Applicants are neither

required nor necessary nor even desirable for determining whether

there is a compliance or non-compliance with the order of SEBI (i.e.

the Settlement Order).

1. Mr. Dhond has submitted that the tests to determine a

necessary party are (i) there must be a right to some relief in relation

to the subject matter of the proceedings; (ii) no effective decree can

be passed in the absence of such parties. He has placed reliance on

Kasturi Vs. Iyyamperumal (Supra) in this context. 35/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 :::

RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

1. Mr. Dhond has submitted that the Applicants are not

necessary parties since they neither have a right to any reliefs in the

present proceedings (and no reliefs are being sought against the

Applicants) nor it is the case that in their absence, the challenge to

the Revocation Order passed by SEBI cannot be adjudicated upon.

1. Mr. Dhond has submitted that the Applicants are neither

a proper party i.e. a party in whose presence it would be necessary to

enable the Court to completely adjudicate upon the issues / questions

raised in the proceedings. There is absolutely no legal impediment in

proceeding with the present Writ Petition in the absence of the

Applicants.

1. Mr. Dhond has submitted that the Applicants were not

parties to the proceedings before SEBI. Naturally, therefore, the

Applicants have no vested right to interfere with respect to a

regulator's decision to settle the complaint and / or revoke the same.

1. Mr. Dhond has drawn a parallel with the limited role of

SEBI under Section 24-A of the SEBI Act. Section 24-A of the SEBI

Act gives the SAT or the relevant Court the power to compound 36/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

certain offences. He has placed reliance upon [Prakash Gupta Vs.

SEBI9](https://indiankanoon.org/doc/97242241/) at Paragraph 2, 90, 93, wherein the Supreme Court has held

that SEBI's consent is not required for the Court to pass an order of

compounding. Similarly, in the present case, when SEBI, as the

authority takes a decision to compound or settle any proceedings,

certainly, the consent / concurrence of private persons, who might be

complainants (such as the Applicants) is not required.

1. Mr. Dhond has submitted that no prejudice will be

caused to the Applicants since by way of Order dated 1 st December,

2023 (while disposing of the Applicants' Writ Petitions), the

Applicants were granted liberty to pursue their grievances, including

in relation to the Settlement Order, in appropriate proceedings before

this Court. Therefore, clearly the Applicants' right to agitate any

issue is not taken away.

1. Mr. Dhond has submitted that with respect to the

allegations of past collusion with SEBI and that SEBI went slow and /

or did not take any action against BNL, unless it was compelled to do

so, is entirely irrelevant in this proceeding. It is not the case of the

Applicants that SEBI is today in active collusion with BNL. If that be

9 (2021) 17 SCC 451 37/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

the case, there is neither any warrant nor is it desirable that a third

party should be allowed to participate in proceedings beween a

regulator and a regulated entity. To permit this will be to place some

element of doubt on the integrity of the regulator and the ability of

this Court to arrive at a fair determination on whether there is

compliance of the Settlement Order or not. Permitting the

participation of the Applicants in such proceedings will also send a

wrong message that for determining the validity of the regulator's

decision, third parties' involvement or participation is required.

1. Mr. Dhond has submitted that the Applicants having

been previously allowed to intervene in the First BNL Writ Petition

had raised frivolous and irrelavant contentions beyond the subject

matter before this Court in an attempt to expand the scope of the

proceedings and thereafter contended before the Supreme Court that

such contentions were not considered by this Court.

1. Mr. Dhond has drawn a fundamental distinction between

the proceedings (First BNL Writ Petition) in which BNL agreed to join

the Applicants. He has submitted that unlike the earlier round / First

BNL Writ Petition which had impuged the non-speaking previous 38/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

Revocation Order dated 10th November 2023, there is now a speaking

order of revocation i.e. Revocation Order / Impugned Order dated

17th November, 2025 which has revoked the Settlement Order by

specifically giving reasons. Either these reasons in the Revocation

Order / Impugned Order are right or these reasons are wrong.

Therefore, the only enquiry is compliance or non-compliance of the

Settlement Order for which the Applicants are not necessary.

1. Mr. Dhond has submitted that during the course of

arguments, it was the contention of the Applicants that the

information in the present proceeding will assist the Applicants in

pursuing their appeals before the SAT. The fallacy of this reason is

evident in the reason itself. Joinder of persons in the Writ Petition is

not to be done because the joinder will generate some information

which can even be used for collateral proceedings. In any event, the

proceedings before this Court are relating to the Settlement Order

and its revocation, whereas the SAT proceedings are proceedings

relating to a separate issue of alleged violations of the exit circular,

and hence are distinct and cannot be conflated.

1. Mr. Dhond has submitted that the Applicants have 39/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

suppressed the fact that an earlier attempt to interlink these distinct

proceedings was rejected by SAT by its Order dated 17 th December,

2024 and this was carried to the Supreme Court unsuccessfully

where the Special Leave Petition was disposed of with liberty to file a

Review Application before SAT. The Review Application, thereafter

filed, itself has been dismissed by the SAT by an Order dated 5 th

December, 2025.

1. Mr. Dhond has accordingly submitted that for the

aforesaid reasons, it would set a wholly incorrect precedent to allow

participation by the Applicants in the present proceedings. He has

accordingly sought for the present Applications be dismissed with

costs.

1. Mr. Ashish Kamat, learned Senior Counsel appearing for

the Respondents in Interim Application (L) No.40048 of 2025 in Writ

Petition (L) No.39246 of 2025, has supported the submissions of Mr.

Dwarkadas and Mr. Dhond. He has placed reliance upon the

Judgment of the Supreme Court in [Municipal Corporation of Delhi

Vs. Gurnam Kaur10](https://indiankanoon.org/doc/327169/) at Paragraph 10. This is in support of his

submission that when the order was made by consent of the parties,

10 (1989) 1 SCC 101 40/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

viz. Order dated 25th January, 2024 which impleaded the Applicants,

the Court did not adjudicate upon the rights of the parties nor did it

lay down any principle. He has accordingly submitted that the

impleadment of the Applicants in prior proceedings by consent

cannot be relied upon in the present proceedings, as a precedent. He

has also sought for the setting aside of the impleadment Applications

with costs.

1. Having considered the submissions, the Applicants who

are admittedly the Shareholders of the Petitioners are not strangers

to the settlement proceedings (including Settlement Orders passed

and the subsequent revocation(s)). The Applicants have a vital and

direct interest in the outcome of these proceedings as it directly

affects their rights as minority Shareholders. In the event, the Writ

Petitions are allowed, the Applicants' rights and interest as minority

Shareholders would be vitally and prejudicially affected. The

restoration of the Settlement Order for which the Applicants have

opposed in prior proceedings including by filing Writ Petitions in this

Court would be to the detriment of the Applicants. It is the

Applicants contention that upon the restoration of the Settlement

Order it would allow the Petitioners and their Undisclosed Promoters 41/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

to act in detriment of the rights of the public shareholders of

Petitioners including the Applicants' rights.

1. The Applicants have been parties in earlier round of

proceedings before this Court and the Supreme Court relating to the

Settlement Order since 2022. It is pertinent to note that the

Applicants had challenged the legality of the Settlement Order

through Writ Petitions filed in this Court and during the course of

proceedings in Writ Petition No.530 of 2023, the Applicants had

brought to the notice of this Court the alleged failure on the part of

the BNL to comply with the terms of the Settlement Order including

making exit offer to all Shareholders for a period of three months

promptly after receiving the Settlement Order at stipulated price.

The compliance with these terms was to be reported within 15 days

of the Settlement Order i.e. by 27th September, 2022. BNL proposed

these terms in correspondence with SEBI over 9 months before the

Settlement Order was finalized and issued. It is pertinent to note

that BNL's exit offer could only be availed of by 1.067% of its

Shareholders. The Applicants have submitted that this is a relevant

consideration that ought to be placed before this Court whilst

exercising its discretionary jurisdiction under Article 226 of the 42/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:00 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

Constitution of India.

1. The Applicants have in their Writ Petitions filed before

this Court, in particular Writ Petition No.530 of 2023, had amended

their Petition to seek revocation of the Settlement Order on the

ground that BNL had failed to comply with the terms of the

Settlement Order and by virtue of which it stood revoked by

operation of law. It is during this Writ Petition filed by the Applicants

that the Settlement Order was revoked by SEBI on 10 th November,

2023.

1. It is further pertinent to note that the Applicants were

impleaded in the Writ Petitions filed by the Petitioners challenging

the revocation of the Settlement Order in November, 2023.

Although, it is the Petitioners' contention that the impleadment of the

Applicants was by consent, this impleadment was preceded by

observations made by this Court in Writ Petitions filed by the

Applicants that the Applicants, as minority shareholders of the

companies, were "....integral to the company, having an inextricable

concern and interest in the functioning and management of the

company." Further, this Court had emphasized that SEBI is required 43/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:01 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

to act while considering "....the paramount interest of investors." It

is for this reason that this Court had considered the settlement order

between the regulator and the noticees to the settlement not to be

viewed as a private lis, and must be examined for its implications on

the rights and interests of minority investors such as the Applicants.

1. The Petitioners have contended that the present

proceedings are restricted to judicial review of the impugned order

passed by SEBI and any attempt to assail the validity of the

Settlement Order is beyond the scope of the present proceeding. This

contention overlooks the scope and ambit of the present Writ Petition

under Article 226 viz. to consider, whether the Settlement Order is to

be revived and for which the participation of the Applicants cannot

be foreclosed. The impleadment of the Applicants in our view would

be necessary as it would enable this Court to effectively adjudicate

the disputes before it.

1. Although, by the Order dated 1st December 2023, the

Applicants' Writ Petitions were disposed of by expressly keeping open

the rights of the Applicants with respect to the grievance qua (i) the

violations alleged in the SCN as well as (ii) the Settlement Order to 44/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:01 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

be agitated at the appropriate time in appropriate proceeding, the

Applicants would nevertheless be bound by the determination in

these proceedings on the issue of whether the Petitioners had

complied with the terms of the Settlement Order. Further, we cannot

overlook the fact of the Applicants also raising the issue of non

compliance of the settlement terms in their Writ Petitions. Hence,

upholding or quashing of Revocation Order would have a direct

bearing on the Applicants' interest.

1. The Petitioners have contended that only SEBI needs to

defend its Revocation Order. SEBI acting as a regulator would take

care of interest of the Shareholders in a representative capacity. This

contention in our view is misconceived, particularly considering that

the Applicants as minority shareholders would be vitally affected by

the outcome of these proceedings. The Judgments relied upon by the

Applicants viz. Fertilizers and Chemicals Tranvancore Ltd. (Supra)

and Prabodh Verma (Supra) have considered similar contentions as

raised by the Petitioners herein. The Supreme Court has recognized

that persons affected on whose behalf the proceedings have been

instituted by the Authority ought to be heard. In the present case,

SEBI is Statutory Body tasked with protecting interest of Investors in 45/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:01 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

the Securities market, but the Applicants as minority Shareholders of

the Petitioners have an independent right to be heard on the issue of

revocation. The Judgment relied upon by the Petitioners viz. [Prakash

Gupta](https://indiankanoon.org/doc/97242241/) (Supra) has no bearing on the issue of whether Investors are

entitled to be heard as parties if they are affected by the subject

matter of the proceedings.

1. We find much merit in this submission on behalf of the

Applicants that a Court in determining impleadment of a party in

writ proceedings, would have to consider whether the party whose

impleadment is sought will be vitally affected by the outcome of the

proceedings. The Judgments relied upon by the Applicants viz.

Prabodh Verma (Supra); Udit Naraian Singh (Supra) are apposite.

Further, Rule 644 of the Bombay High Court (OS) Rules which relates

to the issue of writs under Article 226 of the Constitution provides

that where it appears to the Court that the person has a substantial

interest in the dispute or the question to be decided therein and is a

proper person to be heard, the Court may allow him to appear on

such terms and conditions as it thinks proper. The Court is entitled to

exercise its discretion and determine this. The Court is not bound by

whether the Petitioners' consent to the impleadment of the said 46/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:01 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

person.

1. The Petitioners' reliance on the fact that the Applicants

were not heard before SEBI on the issue of revocation is irrelevant.

We are determining here the issue of locus standi and not the

principles of natural justice. The Applicants in the earlier round were

not seen to be lacking in locus standi to assail the Settlement Order

and it appears to be only now that the Petitioners claim that the

Applicants don't have locus to challenge the Settlement Order.

1. We do not find merit in the distinction drawn by the

Petitioners on the Judgments relied upon by the Applicants viz.on the

ground that the decisions were on the facts of those cases.

1. We also do not find merit in the contentions of the

Petitioners that since the decision of SEBI to revoke the Settlement

Order is for the reasons / identified grounds stated in the decision i.e.

impugned Order / Revocation Order itself, the correctness of the

decision of the revocation has to be decided on the basis of the

reasons given in the Revocation Order itself and hence, the

Applicants are not required to be heard. Although, it is settled law as laid down by the Supreme Court in Mohinder Singh Gill (Supra) that 47/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:01 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

the correctness of the decision is to be tested on the reasons given in

that decision itself, the Applicants would require to be impleaded in

these proceedings in view of their being vitally affected by the

outcome of the proceedings and given the fact that they had raised

the issue of revocation in their prior Writ Petitions pursuant to which

the Settlement Order was eventually revoked by SEBI. Upholding or

quashing of Revocation Order would thus have a direct bearing on

the Applicants' interest.

1. The Petitioners have sought to draw a parallel with the

limited role of SEBI under Section 24-A of the SEBI Act and reliance

has been placed on Prakash Gupta Vs. SEBI (Supra) which has held

that SEBI's consent is not required for the Court to pass an order of

compounding. This decision is not relevant as the present case is one

of impugning the revocation of Settlement Order and that the

Applicants would be vitally affected by the outcome of these

proceedings.

1. We accordingly find much merit in the impleadment

Applications. The Interim Applications are allowed and the

Applicants are permitted to be impleaded as proper and necessary 48/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:01 ::: RO-IAL 40029.25, IAL 40053.25 in WPL 39034.25 with Ors.doc

party Respondents in the above Writ Petitions.

1. The Interim Applications are accordingly disposed of in

the above terms. There shall be no orders as to costs.

[ADVAIT M. SETHNA, J.] [R.I. CHAGLA, J.] 49/49::: Uploaded on - 25/03/2026 ::: Downloaded on - 25/03/2026 22:19:01 :::