New Delhi- 110002 v. Santacruz West

1. Ashoka Marketing Limited, through its authorised representative having registered office at First Floot, Express Building 9-10, Bahadur Shah Zafar Marg, New Delhi – 110002. Arth Udyog Limited, through its 2. authorised representative having its office at 16A, Lajpat Nagar-IV, New Delhi – 110024. V e r s u s

1. Securities and Exchange Board of India, having its headquarters at SEBI Bhavan, Plot No. C4-A, ‘G’ Block, Bandra Kurla Complex, Bandra (E) Mumbai, 400 051. Bharat Nidhi Limited through its 2. authorized representative having registered address at First floor, Express Building, 9-10 Bahadur Shah Zafar Marg, New Delhi – 110002.

3. Matrix Merchandise Limited through its authorized representative having registered office at 101, Pratap Nagar, Mayur Vihar, Phase 1, East Delhi, New Delhi - 110091.

4. Mahavir Finance Limited, through its authorized representative having registered office at 101, Pratap Nagar, Mayur 11th June 2025 SEBI MATTER_.doc Vihar, Phase 1, East Delhi, New Delhi - 110091.

5. TM Investments Limited, through its authorized representative having registered office address at 814, Plot No. 7, Roots Tower, Laxmi Nagar, District Centre, East Delhi, New Delhi - 110092.

6. Sanmati Properties Limited, through its authorized representative having registered office address at 814, Plot No. 7, Roots Tower, Laxmi Nagar, District Centre, East Delhi, New Delhi – 110092.

7. Vineet Jain, 15, Motilal Nehru Marg, New Delhi – 110002.

8. Ashok Dayabhai Shah, Indian Inhabitant, having permanent address at 20, Alli Chambers, 2nd Floor, Tamarind Lane, Fort, Mumbai – 400 023.

9. Rupal Ashok Shah, Indian Inhabitant, having permanent address at 20, Alli Chambers, 2nd Floor, Tamarind Lane, Fort, Mumbai – 400 023.

10. Kuntal Hasmukhlal Shah, Indian Inhabitant, having permanent address at 104, 1st Floor, Panchsheel, Plot No. 53, C Road, P. M. Shukla Marg, Churchgate, Mumbai – 400020. Hasmukhlal Vrijlal Shah, Indian 11. Inhabitant, having permanent address at 104, 1st Floor, Panchsheel, Plot No. 53, C Road, P. M. Shukla Marg, Churchgate, Mumbai – 400020.

12. Shilpa Ajay Shah, Indian Inhabitant, having permanent address at 107/4, Natwar House, V. P. Road, Near Girgaon,P. O. Mumbai 400004. Gautam Kantilal Pandhi,

13. Indian inhabitant, having permanent address at 11th June 2025 SEBI MATTER_.doc Royal Garden, Flat No. 303, 3rd Floor, 203 New Palasia Indore, Madhya Pradesh, Indore-452001.

14. Madan Lal Narula, Indian Inhabitant, having permanent address at 162, Venus Apartment, Cuffe Parade, Near President Hotel, Colaba, Mumbai – 400005.

15. Sneha Anil Whabi, Indian Inhabitant, having permanent address at Krishna Kunj, P. no. 41, Parkland Society, Near Bajaj Finserv Viman Nagar, Pune – 411014.

16. Anil Vithaldas Whabi, Indian Inhabitant, having permanent address at Krishna Kunj, P. no. 41, Parkland Society, Near Bajaj Finserv Viman Nagar, Pune – 411014.

17. Pravin Hiralal Jain, Indian Inhabitant, having permanent address at Flat no. 301, Queens Court Housing Society Ltd., Narangi Baugh Road, Off Boat Club Road, Pune – 411001.

18. Jain Pravin Hiralal HUF, Indian Inhabitant, having permanent address at Flat no. 301, Queens Court Housing Society Ltd., Narangi Baugh Road, Off Boat Club Road, Pune – 411001.

19. Lokesh Pravin Jain, Indian Inhabitant, having permanent address at Flat no. 301, Queens Court Housing Society Ltd., Narangi Baugh Road, Off Boat Club Road, Pune – 411001.

20. Asha Manik, Indian Inhabitant, having permanent address at 12 A II Palazzo Little Gibbs Road, Mumbai 400006.

21. Rohan Manik, Indian Inhabitant, having permanent address at 12 A II, Palazzo Little Gibbs Road, Mumbai 400006.

22. Jayshree Gokal, Indian Inhabitant, 11th June 2025 SEBI MATTER_.doc having permanent address at 12 A II, Palazzo Little Gibbs Road, Mumbai 400006.

23. Prasham Shah, Indian Inhabitant, having permanent address at 10/12, 4th Floor Jolly Center, Tilak Road, Santacruz West, Mumbai – 400054.

24. Gandhi Securities and Investment Pvt. Ltd., Indian Inhabitant, having permanent address at 9, Haji Kasam Building, 66, Tamarind Lane, Fort, Mumbai – 400 001.

25. Pina Pankaj Shah, Indian Inhabitant, residing at Flat 10, 4th Floor, Jolly Center, Tilak Road, Santacruz West, Mumbai 400054.

26. Pankaj Shah, Indian Inhabitant, residing at 10/12, 4th Floor Jolly Centre, Tilak Road, Santacruz West Mumbai – 400054. ... Respondents -------------------- Mr. Venkatesh Dhond, Senior Advocate a/w. Mr. Ameya Gokhale, Mr. Rishabh Jaisani, Ms. Karishma Rao, Mr. Harit Lakhani and Mr. Ansh Kumar i/by. Shardul Amarchand Mangaldas and Co. for the Petitioners in WP No.3977/2024 and for Applicant in IA No.2566/2024. Mr. Janak Dwarkadas, Senior Advocate a/w. Mr. Ameya Gokhale, Mr. Rishabh Jaisani, Mr. Harit Lakhani and Mr. Ansh Kumar i/by. Shardul Amarchand Mangaldas and Co. for the Petitioners in WP No.4828/2024 and for Applicant in IAL No.9433/2024. Mr. Ashish Kamat, Senior Advocate a/w. Mr. Ameya Gokhale, Mr. Rishabh Jaisani, Mr.Harit Lakhani and Mr. Ansh Kumar i/by. Shardul Amarchand Mangaldas and Co. for the Petitioners in WP (L) No.2325/2024 and for Applicant in IAL No.9266/2024. Mr. J. J. Bhatt, Senior Advocate a/w Mr. Vishal Kanade, Mr. Mihir Mody,Shreyans Menkudale i/by. K. Ashar and Co. for Respondent No.1 (SEBI) in WP No.3977/2024, WPL No.2325/2024 and WP No.4828/2024. 11th June 2025 SEBI MATTER_.doc Mr. Gaurav Joshi, Senior Advocate a/w. Mr. Kunal Katariya i/b Garima Mehrotra for Resp nos.26 and 27 in WP 3977/24, for Respondent nos.25 and 26 in WPL 2325/24 and Respondent Nos.22 and 23 in WP No.4828/2024. Mr. Navroze H. Seervai, Senior Advocate a/w Ms. Arti Raghavan, Mr. Pulkit Sukhramani, Ms. Samreen Fatima and Mr. Juan Dsouza i/by. JSA Advocates and Solicitors for Respondent Nos. 9 to 25 in WPL No. 3977/2024, for Respondent Nos. 8 to 24 in WPL No.2325/2024 and for Respondent Nos. 5 to 21 in WP 4828/2024. --------------------------- CORAM: BHARATI DANGRE & MANJUSHA DESHPANDE, JJ. RESERVED ON: 11th March, 2025 PRONOUNCED ON: 11th June, 2025 (THROUGH V.C. ) JUDGMENT (Per Bharati Dangre, J.)

1. Commonality of the three Writ Petitions lies in the fact that all the three, raise a challenge to the order dated 10.11.2023. passed by Securities and Exchange Board of India (SEBI)revoking the settlement order passed by it on 12.09.2022. By the said order, involving the entities, who are the Petitioners in the three Writ Petitions, the decision is taken by SEBI to revoke the Settlement Order dated 12.09.2022, in exercise of the power conferred under Regulation 28 of the SEBI (Settlement Proceedings) Regulations, 2018, for failure to comply with its terms. The impugned order also direct that upon revocation, no amount paid by way of compliance of the monetary terms be refunded and the Board shall restore or initiate 11th June 2025 the proceedings with respect to which the Settlement Order was passed SEBI MATTER_.doc against the Petitioners.

2. To begin with, it would be appropriate to introduce the Contenders in the proceedings, which are placed before us for consideration; on one hand stand the Petitioners, the prime contender amongst them being Bharat Nidhi Limited (“BNL”) the Petitioner in Writ Petition No.3977/2024, an unlisted public limited company incorporated under the provisions of Companies Act, 1930, presently placed on the Dissemination Board (DB) of National Stock Exchange of India Limited (“NSE”) since February 2019, pursuant to the circular issued by SEBI. Whereas, in Writ Petition No.4828/2024 (Stamp No.2326/2024) the Petitioners are the following entities :- 1) Matrix Merchandise Limited, New Delhi; 2) Mahavir Finance Limited, New Delhi; 3) T. N. Investments Limited, New Delhi; 4) Sanmati Properties Limited, New Delhi; 5) Vineet Jain, New Delhi. The Petitioner Nos.1 to 4 are the Companies incorporated under the Companies Act, 1930 having its registered office at the address mentioned in the title clause of the Petition, whereas Petitioners No.5 Vineet Jain is an Indian Inhabitant, a resident of New Delhi. In the third Writ Petition, WP(L) No.2325/2024, the Petitioners are Ashoka Marketing Limited, alongwith Arth Udyog Limited 11th June 2025 Companies registered, which also raise challenge to the impugned SEBI MATTER_.doc order.

3. Opposing the Petition, on one hand stands SEBI, the Regulation and on the other hand are the Minority Shareholder Group headed by Ashok Dayabhai Shah (known as ‘Ashok Shah Group’) as well as ‘Pina Pankaj Shah Group’, all of whom being impleaded in WP No. 2326/2024 as Respondent Nos.5 to 23 in terms of the amendment permitted to be carried out by order dated 08/02/2024 and 15/02/2024. The Respondent Nos. 5 to 23 are the minority shareholders in BNL, who had approached this court by filing separate Writ Petitions viz. WP No.447/2023 and WP No.530/2023 respectively challenging the Settlement Order of SEBI and the postal ballot notice issued by it. We will refer with the Petitions and the orders passed therein as and when the occasion arises.

4. The three Writ Petitions, face opposition at the instance of SEBI as well as private respondents, minority shareholders of BNL, who were aggrieved by the Settlement Order passed in favour of the 8 Petitioners and as it is their specific contention that the Settlement Order must fail as it has resulted into breach by the Petitioners and they find justification in SEBI revoking the order of Settlement. 11th June 2025 SEBI MATTER_.doc

5. In support of the Petitioners, we have heard the learned senior counsel Mr. Janak Dwarkadas, representing the Petitioners in WP 4828/2024, Senior Counsel Mr. Ashish Kamat, representing the Petitioners in WP no.2325/2024 and the learned senior counsel Mr. Dhond, representing BNL (WP No.3977/2024). SEBI is represented by the learned Senior Counsel Mr. J. J. Bhatt, whereas the respective minority shareholders are represented by the learned senior counsel Mr. Navroz Seervai and Mr. Gaurav Joshi.

6. Bharat Nidhi Limited (In short, ‘BNL’), the Petitioner, is an unlisted Public Limited Company, which was initially listed on Delhi Stock Exchange and then on Calcutta Stock Exchange prior to its de recognition by SEBI. While it find itself placed on the Dissemination Board (In short, ‘DB’) of National Stock Exchange of India Limited (NSEL) since 12.02.2019 and being subjected to control of SEBI, pursuant to complaints and representations from certain shareholders, primarily alleging violation SEBI’s minimum shareholding norms (NPS norms) and disclosure requirements, common show cause notice bearing reference No.SEBI/HO/IVD/IDI/OW/P/2020 of 18105 dated

20.10.2020 along with the other seven Petitioners, who are the shareholders of BNL. The show cause notice attributed violations to BNL and the other Petitioners, the notice being issued under Section 11(1), 11(4), 11(4A), 11B(1) and 11(2) of the SEBI Act, 1992, read with SEBI (Procedure for 11th June 2025 SEBI MATTER_.doc Holding Enquiry and Imposing Penalties) Rules, 1995 and Section 12A(1)(a) and Section 23E of Securities Contract (Registration) Act,

1956. The notice specifically attributed violation of Regulation 31(1)(b) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (“LODR Regulation”) read with SEBI circular no. CIR/CFD/CMD/13/2015 dated 30 November 2015 read with regulation 2(za) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and Rule 19 A(1) of Securities Contract Regulation Rules, 1957.

7. The show cause notice issued also indicated that since a settlement mechanism is formulated under the SEBI (Settlement Proceedings) Regulation, 2018, the noticee is at liberty to opt for the settlement process in the manner prescribed, in the Regulation though it was clarified that filing of settlement application did not confer any right to settle the proceedings. The aforesaid resulted into filing of Settlement Applications by each of the Petitioners separately, along side the response to the show cause notice, so as to settle the purported allegations in the show cause notice.

8. Neither the show cause notices nor the Applications for settlement or the replies submitted, form part of the Petition as it is the pleaded case of the Petitioners that they are confidential documents under Regulation 29 of the Regulations. It is however worth to note 11th June 2025 SEBI MATTER_.doc that the Settlement Applications preferred on distinct dates were registered under different numbers and they were placed before the Internal Committee (IC), a body of SEBI. Thereafter, meetings were held between IC and the representatives of the Companies on various dates to deliberate on each of the Settlement Application and to discuss and negotiate the terms of settlement. As per Petitioners, during this process, various queries were raised by IC from time to time and the Petitioners responded resulting into filing of revised Settlement Terms, based on the interse deliberations. The IC finalised the terms of settlement in respect of each of the Petitioner and in terms of Regulation 13(3) of the Settlement Regulation, forwarded the same for consideration of the High Powered Advisory Committee (HPAC) which comprise of Judicial member, who has been a Judge of the Supreme court or High court and three external experts having expertise in securities market or in connected matters. The HPAC considered the Settlement Applications and also settlement terms forwarded by the IC. In the wake of pendency of WP (C) No.10756/2019 before the Delhi High Court, Aditya Agrawal and others Versus SEBI alleging violation of SEBI Regulations by BNL, HPAC directed Matrix Merchandise and the co-Petitioners to seek permission from the Delhi High Court to decide and dispose of the settlement applications. 11th June 2025 SEBI MATTER_.doc On a green signal being shown by the Delhi High Court, permitting SEBI to deal with / adjudicate the Settlement Applications on their merits, HPAC approved the Terms of Settlement and forwarded the same to the Panel of Whole Time Members of SEBI (“Panel of WTM’s), the ultimate authority within SEBI for passing of settlement orders as per the Regulation.

9. The Petitioners, vide email were communicated by SEBI that it had in principle agreed to accept the terms of settlement and also advised to pay the respective settlement amounts to SEBI. In compliance of the agreed Terms of Settlement applicable to the Petitioners, each of them remitted the respective settlement amounts, the details of which are contained in the respective Petitions. While the Settlement applications were pending for consideration before SEBI, the Petitioners were also called upon by it for hearing on the show cause notice before the SEBIs WTM, on different dates and on the hearing being concluded, SEBI allowed the Settlement Applications, by passing a common Settlement Order on 21/09/2022. The Settlement Order has a mention of all the 8 entities including BNL with reference to their distinct settlement applications. 11th June 2025 SEBI MATTER_.doc

10. In the backdrop of the applications filed by the Applicants, proposing to settle , without admitting or denying the findings of fact and conclusion of law, in response to the show cause notice received, alleging violation of various provisions and pending enforcement proceedings initiated under SEBI Act read with SEBI (Procedure for Holding Enquiry and Imposing Penalties) Rules, 1995, the Settlement Order clearly noted that the SEBI conducted an investigation in the matter to ascertain whether there had been any misrepresentation of the shareholding of promoters as public shareholding and the possible non compliance with the minimum public shareholding norms. Based on the findings of the investigation, enforcement proceedings were initiated resulted into show cause notice alleging lapses separately against each of the eight Noticee, which came to be settled by a common order.

11. The Settlement order dated 12.09.2022, specifically referred to the meeting of the representative of the Applicants with the IC and that the applications being placed before HPAC, which considered the Settlement Terms proposed by the Applicants and recommended the case for settlement on distinct following terms, formulated against each of the Petitioners and referred to the recommendation of HPAC in its meeting held on 09.06.2022. 11th June 2025 SEBI MATTER_.doc The order of Settlement further stated that upon acceptance of the recommendations by the panel fo WTM in terms of Regulation 15(2) of the Settlement Regulations, notices of demand were issued to the Applicants, on 20.07.2022 and the Applicants informed about the remittance of the respective settlement amounts and SEBI has confirmed crediting of the same. Paragraphs 7 and 8 of the Settlement Order specifically record thus :- “7. The applicants informed about the remittance of the respective settlement amounts between August 10 to August 16, 2022 and SEBI has confirmed the credit of the same. The applicants also provides an undertaking to comply with the non-monetary terms forming part of the settlement terms as mentioned at paragraph no.5.

8. In view of the above, in exercise of the powers conferred under Section 15JB read with Section 19 of the SEBI Act and under Section 23JA of the SCR Act and in terms of Regulation 23 read with Regulation 28 of the Settlement Regulations, it is hereby ordered that the pending enforcement proceedings for the alleged defaults as mentioned at paragraph 1 and 2 are settled qua the applicants on the following terms: i. this Order disposes of the enforcement proceedings initiated by SEBI for the defaults as mentioned earlier in respect of the applicants’ ii. SEBI shall not initiate any other enforcement action against the applicants for the said defaults; and iii. Bharat Nidhi Limited shall submit a report of compliance with the terms of its undertaking given at paragraph 5, within 15 days of the passing of this settlement order, failing which the settlement order shall cease to operate qua all the applicants.”

12. The Settlement Order clearly stated that passing of the order is without prejudice to the right of SEBI under Regulation 28 of the Settlement Regulations to take enforcement action including 11th June 2025 continuation of the proceeding against the Applicants in the following SEBI MATTER_.doc contingencies :- “a) any representation made by the applicants in the present settlement proceedings is subsequently found to be untrue’ b) the applicants have breached any of the clauses/conditions of Undertaking/Waivers filed during the present settlement proceedings; and c) there was a discrepancy while arriving at the settlement terms.” The Settlement Order passed on 12.09.2022, to the above effect stated that it shall come into force immediately and copy of the order shall be forwarded to the Applicants and also published on the website of SEBI.

13. This Settlement Order, is however revoked by SEBI on

10.11.2023 as regards all the 8 entities, by invoking Regulation 28 of the SEBI (Settlement Proceedings) Regulations, 2018 alleging failure to comply with it. The order dated 10.11.2023 is communicated to each of the Petitioner through separate communication and find annexed to each of the Petition. The communication resulting into revocation of the Settlement Order is signed by one Shri L. KAGIO MAO on behalf of SEBI.

14. The impugned order is assailed in the three Petitions, by setting out distinct grounds, the foremost ground advanced being that no case is made out for revocation of the order under Regulation 28, as it permit revocation of Settlement Order only in the contingencies 11th June 2025 SEBI MATTER_.doc stipulated therein viz. if there is failure to comply with the settlement order or if at any time after the settlement order is passed it comes to the notice of the Board, that the Applicant has not made full and true disclosure or has violated the undertakings or waiver and only upon such happening, the order of settlement shall stand revoked and withdrawn and thereupon the Board shall restore or initiate the proceedings with respect of which the the Settlement Order is passed. It is the case of the Petitioners before us that the order of settlement was withdrawn by SEBI alleging that there is failure to comply with the Settlement Order. The decision is clamped by the Petitioners as arbitrary as it has failed to follow the principles of natural justice and also procedure contemplated under SEBI (Settlement Proceedings) Regulations, 2018, which would have justified revocation of the Settlement Order.

15. We shall briefly refer to the arguments advanced by the senior counsel, representing the Petitioners in the three Petitions. For the sake of convenience we have considered the Petition filed by BNL, (Writ Petition No. 3977 of 2024) as lead Petition. To begin with we would refer to the arguments advanced by Mr. Dwarkadas and Mr. Kamat, representing one set of Petitioners. Mr. Dwarkadas, representing Petitioners in Writ Petition no. 4828 of 2024, Matrix Mercandise Limited, Mahavir Finance Limited, 11th June 2025 SEBI MATTER_.doc T.M. Investment Limited, Sanmati Properties Limited the four companies and one individual Mr. Vineet Jain has taken us through the Securities and Exchange Board of India (Settlement Proceedings) Regulations 2018 as regards power available to SEBI, constituted under the Act of 1992 and the Regulation being framed providing for the terms of settlement and prescribing the procedure of settlement and the matters connected therein. The Regulation having coming into force from 01.01.2019, according to Mr. Dwarkadas, has culled out the scope of settlement in Chapter III and has vested the power in the Board, to take into account various factors while it consider application for settlement and it expect the Board to take into account factors as contemplated under sub-rule (3) of Regulation 5 which include a factor, as to whether the Applicant has provided an exit or purchase option to investors in compliance with securities laws to the satisfaction of the Board. According to him, the board is given discretion not to settle specific proceedings, in case where the Applicant is a willful defaulter, a fugitive economic offender or has defaulted in payment of any fees, dues or penalty imposed under the Securities Laws. The Terms of Settlement according to Mr. Dwarkadas, which are contemplated under Chapter V of the Regulation, cover a Settlement amount and/or non monetary terms which may include the one specified in sub-rule (2) of Regulation 9 including suspension or 11th June 2025 SEBI MATTER_.doc cessation of business activities for a specified period, Exit from Management, Loss of securities, submit to enhanced internal audit and reporting requirements, restraining and accessing the securities market and /or prohibiting from buying, selling or otherwise dealing in securities directly or indirectly and associating with the securities market in any manner, for a specified period. The procedure contemplated for settlement as set out in Chapter V is a three tier system according to Mr. Dwarkadas involving a High Power Advisory Committee (HPAC), Internal Committee(s) (IC) and the panel of Whole Time Members, which ultimately is the authority either to accept or reject the recommendation to settle the specified proceedings.

16. Inviting our attention to the procedure for passing settlement orders, as specified in Regulation 23, the learned Senior Counsel would submit that the WTM, adjudicating officer or the competent officer of the Board before whom the proceedings are pending, shall dispose of the respective proceedings , by an appropriate order on the basis of the approved settlement terms. Focusing his attention on Regulation 28 pertaining to revocation of Settlement order , according to Mr. Dwarkadas, the revocation is permissible only upon the contingencies occurred, stipulated in Sub Rule 1. Further Sub Rule 2 of Regulation 28 categorically set out that whenever any Settlement Order is revoked, no amount paid under the 11th June 2025 SEBI MATTER_.doc Regulations shall be refunded meaning thereby that that the amount paid under the Settlement order shall be forfeited, thereby resulting into civil consequences. In the wake of Regulation 28 specifically setting out the contingencies when the settlement order can be revoked, according to Mr. Dwarkadas, none of the contingencies have occurred in the present case.

17. It is contended on behalf the Petitioners that the sudden U turn by SEBI in revoking the Settlement Order which it had passed after following the appropriate procedure for settlement as set out in the Regulation of 2018, has its roots in the proceedings, instituted by Ashok Shah Group. For this purpose, our attention is invited to the WP No. 530/2023 filed filed by Ashok Shah and Group as well as another WP No.447/2023 instituted by Pina Shah, challenging settlement order of BNL which resulted into an interim order being passed on 17/10/2022 by the High court, restraining BNL from finalising the offers received by it. The Petitions were exhaustively amended, alleging revocation of the settlement order by operation of law by categorically stating that BNL by not following the terms of Settlement have caused its breach and thereby the consequences contemplated under Rule 28 automatically followed, as upon failure to comply with the settlement 11th June 2025 SEBI MATTER_.doc order it stand revoked and withdrawn and the proceedings instituted stand restored, as if no settlement order was ever passed. It is, in these proceedings, according to Mr. Dwarkadas, SEBI adopted a fair stand, as when it filed an Affidavit on 30.03.2023, specifically stating the Settlement Order has been passed by following the appropriate procedure and it contained monetary and non monetary terms and BNL had already paid the settlement amount. It also conceded that in the wake of the order passed by the High Court on 17.10.2022, the buy-back cannot be completed by BNL, but BNL alongwith other entities mentioned in the Settlement Order had furnished an Undertaking to comply with the non monetary terms forming part of the settlement terms . It also assured to the Court by stating that it shall ensure that the terms of the Settlement Order are complied with in letter and spirit by BNL as well as the other Applicants forming part of the settlement order and in case of any breach it shall take enforcement action forming part of the settlement order. Though according to Mr. Dwarkadas, on 05.09.2023, SEBI made a categorical statement before the High Court that since there was a change in its WTM members, it would take an appropriate decision upon revocation of the settlement order.

18. Referring to the order dated 13/09/2023, Mr. Dwarkadas would submit that the Court was called upon to deal with prayer clause (g) of 11th June 2025 SEBI MATTER_.doc the Petition filed by the minority shareholders of BNL who had complained to SEBI, of violation of various provisions of Securities Laws. As before hearing of the Petitions of the Petitioners therein, they insisted for prayer clause (g), in form of a direction to direct SEBI to produce copies of investigation report, show cause notices, minutes of meetings of IC, HPAC and panel of WTMs, order/communication, noting vide which the settlement applications filed by the eight applicants were approved by SEBI. By order dated 23.10.2023, the Division Bench of this Court directed SEBI to furnish the necessary documents, as the Court was of the opinion that all actions taken by SEBI and its various bodies constituted under the Act and the Regulations are required to be in the paramount interest of the investors and there is no reason why the documents shall be not made available to the Petitioners, who were not strangers but minority shareholders of BNL. As SEBI was directed to furnish the copies of the documents within a period of 3 weeks of passing of the order, which rattled SEBI, according to Mr. Dwarkadas and thereafter resulted into revocation of settlement order in an extremely hush up affair.

19. Mr. Dwarkadas has taken us through the sequence of subsequent events, which resulted into filing of SLP by BNL as well as the other Petitioners, which resulted into an order on 06/111/2023, as 11th June 2025 SEBI MATTER_.doc the Apex Court was of the view that the impugned order of the High Court was clearly interlocutory in nature and therefore the SLP was not entertained though parties were granted liberty to pursue their remedies in accordance with law on all count after the final Judgment of the High Court. According to Mr. Dwarkadas SEBI adopted a dubious stand as before the High Court on 08/11/2023, SEBI agreed to supply the documents, but immediately with one day in between, on

10.11.2023, chose to pass the impugned order, withdrawing the settlement order.

20. According to Mr. Dwarkadas, as far as his clients are concerned, though the Settlement Order bifurcated the terms of settlement qua each of the Applicant, as far as the Petitioners he is representing are concerned, it only contemplated monetary terms as settlement amount, quite distinct from BNL, which in addition to the Settlement amount, was required to submit a voluntary undertaking to provide exit offer to its shareholders for a period of 3 months after the Settlement order is passed, at the same exit price that was offered in the year 2019 and also to refrain from accessing the capital market by issuing prospectus, documents or advertisement soliciting money from public for a period of 24 months from the date of Settlement Order. According to Mr. Dwarkadas, the necessary payments were made towards the settlement amount by the five Petitioners which is clearly recorded in the Settlement Order. 11th June 2025 SEBI MATTER_.doc

21. The learned Counsel would submit that the Settlement order was passed after following the appropriate procedure of processing the Applications through HPAC which recommended its acceptance and therefore, the revocation of the settlement order against the Petitioners according to Mr. Dwarkadas is a gross illegality. It is also his specific contention that assuming for a moment that there was some default on part of BNL, why should the other Applicants suffer, as the terms of settlement clearly contemplate different monetary terms and except for BNL the settlement order did not contemplate any non monetary term. According to him, only when the High Court directed disclosure of certain documents at the instance of Ashok Shah Group, as a knee jerk reaction, SEBI sprung into action and without following the procedure contemplated under the Regulation of 2018, deemed it appropriate to revoke the settlement order despite there being no breach of Undertaking or default to comply with any of the terms stipulated in the Settlement Order by his clients. It is also an arguments advanced by Mr. Dwarkadas that when SEBI filed SLP being aggrieved by the order of 23.11.2023 passed by the High Court which directed it to disclose to the minority shareholders the documents sought in terms of prayer clause (g) of their Petition the SLP do not contain any averment about a process being initiated by SEBI revoking the Settlement Order and according to 11th June 2025 SEBI MATTER_.doc him it was not therefore even on the mind of SEBI to do so. However, all of a sudden 10.11.2023 at 7.52 p.m. by exchanging a communication the settlement order stood revoked.

22. Inviting our attention to the Regulation wherein the procedure is contemplated as to follow a particular route Mr. Dwarkadas allege that did the file was moved from Stage 1 to Stage 2 i.e. from the HPAC to the WTM, with supersonic speed and it is highly an impossibility, as it was a Diwali day, a holiday, which saw flurry of activity. He would also raise a doubt as to whether the communication dated 10/11/2023 is an order or it is a communication and for this purpose he has placed reliance upon two affidavits filed by SEBI, the first filed by Sachin Sonawane, Deputy General Manager, who had referred to the communication dated 10/11/2023 as an ‘order’, where he specifically stated that since the revocation order is passed on 10/11/2023 which is self explanatory nothing survive in Writ Petition NO.530/2023 filed by Ashok Shah and others and the same to be disposed off. However, another affidavit filed by SEBI specifically affirmed by Mr. Mao a stand is adopted that communication dated 10/11/2023 is not an order.

23. Harping upon the contradictory stand adopted by SEBI particularly when it is a Regulatory authority expected to act with responsibility and accountability, Mr. Dwarkadas has called in question the entire approach of SEBI. Another limb of argument of 11th June 2025 SEBI MATTER_.doc Mr. Dwarkadas is that the impugned order/communication dated 10/11/2023 is violative of principles of natural justice and he would place reliance upon two decisions of the Apex Court in case of State Bank of India vs Zha Developers Pvt. Ltd. & Ors 1, as well as decision in case of State Bank of India & Ors. vs. Rajesh Agarwal & ors.2, holding that administrative action having civil consequences must adhere to the principles of natural justice.

24. The learned Senior Counsel Mr. Ashish Kamat representing Ashoka Marketing Limited and Arth Udyog Limited in Writ Petition No.2325 of 2024 has adopted the argument advanced by Mr. Dwarkadas and he would submit that the petitioners had filed separate and independent settlement applications with SEBI in accordance with the Settlement Regulations, pursuant to a show notice being issued on

28.10.2020 alleging non-disclosure of promoter share holding in BNL by the petitioners and resultantly violating the MPS norms as well as the circular providing the manner of achieving MPS as well as the accusations being levelled as per the SEBI (Prevention of Fraudulent and Unfair Trading Practices Regulation 2003). According to Mr. Kamat, applications were filed to settle purported allegations contained in the show notice against the petitioners and it was followed by separate meetings being held between the representatives of the petitioners and the members of the 1 2019 6 SCC 687, 2 (2023) 6 SCC 1 11th June 2025 SEBI MATTER_.doc internal committee of SEBI, which resulted in submission of revised settlement terms based on interse deliberations. According to him, when SEBI informed the petitioners that it had in principle agreed to accept the terms of settlement and calling upon them to pay their respective settlement amounts, the petitioners tendered the respective settlement amounts to SEBI, which was a pre requisite for passing of the settlement order. On the settlement order being passed on 12/09/2022, as far as the petitioners are concerned, which comprise of monetary and non- monetary settlement terms, the petitioners complied with both.

25. Mr. Kamat concurred with Mr. Dwarkadas in bringing to our attention the stand of SEBI, in the affidavit filed, while responding to the Petition filed by minority group. However according to him, when the direction was issued, by the Division Bench of Bombay High Court on 23.10.2023, directing SEBI to furnish the documents enlisted in prayer clause (g) of the Petition, which interalia included internal noting and communications of SEBI and the investigation report, SEBI adopted an adversarial stand from then. On 10.11.2023, the impugned orders were passed, revoking the Settlement Order and the orders have been subjected to challenge by specifically stating that the order has been passed by the Deputy General Manager and not by the panel of WTM’s. Further, it is also urged that SEBI is now contending that it is just a communication and 11th June 2025 SEBI MATTER_.doc not an order and if this is so, SEBI is admitting that there is no order revoking settlement order as on date. Also stating that revocation of the settlement order has entail civil consequences, which necessarily contemplate a reasoned order to be passed after an opportunity of hearing being provided, the impugned order on the aforesaid grounds, which fails to adhere to the well settled norms of principles of natural justice cannot therefore be sustained.

26. According to Mr. Kamat there is no order revoking the settlement order within the meaning and scope of the Regulation of

2018. Assuming that there exist an order, he would submit that SEBI has attempted to support the revocation for extraneous reasons, which in no case can be justified as the revocation of settlement order is nothing but an knee-jerk reaction, when SEBI was directed by the Court to disclose the necessary details to the minority shareholders in the petition filed by Ashok Shah Group. According to Mr. Kamat, in passing the impugned orders, SEBI has skipped various stages and in an hurried manner has taken a decision to revoke the order on 10/11/2013, within a short span of 2-3 days. To support his contention, he would place reliance upon a decision in case of Noida Entrepreneurs Association vs. Noida and ors3. It is also the submission of Mr. Kamat that, at this stage, SEBI cannot renege from its understanding/interpretation of para 8 (iii) of 3 WP (C) No. 150 of 1997 11th June 2025 SEBI MATTER_.doc the Settlement Order, which contemplated filing of an undertaking of complying with the terms of the settlement order, including providing an exit to the public shareholders (within 15 days of passing of the settlement order). According to him BNL had complied with the said direction on 27.09.2022, and therefore, SEBI was quite clear and conscious about the compliance which it intended to have when it considered the application for settlement by BNL. In addition, according to him, the revocation of settlement order can be only on the grounds which are stated in Regulation 28 and in absence of any of the contingency being attracted in the present case, the impugned order can only be stated to be based on extraneous contention and that to at the instance of Ashok Shah Group, the minority shareholders. According to him, the BNL the petitioners and others have complied with the settlement order and merely because the minority shareholding group is of the opinion that there is no compliance as BNL was required to give an exit offer and not a buyback, the different approach adopted by SEBI cannot be justified as the decision taken by SEBI now find its root in the contentions advanced by Ashok Shah Group when it raise challenge to the validity of settlement order, which is completely irrelevant. Apart from this, Mr. Kamat would submit that the settlement order is not composite and is severable qua the petitioners that is his client Ashoka Marketing Limited and Arth Udyog Limited and 11th June 2025 SEBI MATTER_.doc assuming for a moment that there is no compliance of the terms of settlement by BNL, the petitioners cannot be painted by the same brush and cannot be put to prejudice. It is also his specific contention that the revocation of the settlement order in-flagrant violation of principles of natural justice, that is, without any notice, hearing or a reasoned order, do not meet the parameters of an order, which should stand to the judicial scrutiny, particularly when the petitioners have already paid the amounts pursuant to the demand notice and prior to the passing of the settlement order and therefore, there was no question of retrospectively imposing coextensive liability upon the petitioners. Mr. Kamat has also placed reliance upon various authoritative pronouncements, which include the decision in case of Oryx Fisheries Pvt Ltd vs. Union of India & ors4, Dayaram vs Raghunath & ors5 as well as the decision in case of Noida Entrepreneurs and Association vs. Noida and ors6 and also the decision of the Apex Court in case of 63 Moons Technologies Ltd. (formerly known as Financial Technology India Ltd.) & Ors vs. Union of India & Ors7.

27. Senior Counsel Mr. Venkatesh Dhond, representing Bharat Nidhi Limited in Writ Petition no. 3977 of 2024, has advanced his 4 (2010) 13 SCC 247 5 (2007) 11 SCC 241 6 WP(C) No. 150 of 1997 7 Civil Appeal No. 4476 of 2019 11th June 2025 SEBI MATTER_.doc arguments with reference to the relevant dates leading to the passing of revocation order on 10.11.2023 in exercise of powers under Regulations 28, on the ground that BNL has failed to comply with its settlement order. While raising a challenge to the impugned order, he has focussed his attention upon the analysis of the settlement order, since its revocation is based on the ground of non-compliance and in the words of SEBI, for the reasons of “failure to comply”. According to him, the policy of the law is to facilitate and/or promote settlements and not derail them, particularly for extraneous reasons as, unsettling well considered decisions to settle erodes the confidence of parties, leading to multiplicity of litigation, where settlement was already worked out. According to him, a body which has to decide the matters of settlement must bear in mind the larger picture and/or policy underlying the compounding provisions. He is extremely critical about the revocation order which is a non-speaking and unreasoned order, having been passed without following the principles of natural justice, due process and conduct of necessary inquiries and investigations. In addition, it is also his submission that the revocation order has not been passed by an appropriate authority under law which makes the order without jurisdiction. 11th June 2025 SEBI MATTER_.doc Adopting the arguments advanced by Mr. Dwarkadas as well as Mr. Kamat, for the other two Petitioners, Mr. Dhond has also urged that the timing of the revocation order is full of suspicion and contrary to SEBI’s stand adopted in previous litigation, challenging the settlement order.

28. Mr. Dhond would submit that the settlement order passed by SEBI involving BNL, prescribed that it shall provide an exit offer to its public shareholders for a period of three months, in addition to the monetary terms of which the compliance was already ensured by BNL as early as on 27.09.2022. According to him, the settlement order did not specify the mode of exit to be provided by BNL and in any case BNL was already moved to the dissemination board in February, 2019 and was no longer a listed entity and therefore the SEBI norms/compliances or listed entities, could not be made applicable to it. According to him, in compliance with the settlement order, BNL had taken all necessary steps to ensure the compliance and immediately after passing the settlement order on 12.09.2022, a meeting of the Board of Directors of BNL was convened wherein the Resolution was passed approving the buy-back of 1.067 percent shares of BNL at the price of INR 11,229/- per share (subject to enhancement by Delhi High Court) and also according approval for approaching share holders holding more than one percent in BNL, who had previously in 2019 11th June 2025 SEBI MATTER_.doc expressed their willingness to not exit BNL, to ascertain their willingness to continue to remain share holders of BNL. Pursuant to the Board's approval, postal ballot notices were issued to the share holders seeking their consent for buy-back offer and the voting being kept open. BNL also made a public announcement of the proposed buy-back in two widely circulated newspaper and it also updated SEBI of the steps taken by it.

29. According to Mr. Dhond, BNL intended to provide exit by way of buy-back of shares and it was in the process of writing to certain share holders asking if any public share holder is willing to come forth and provide an exit to the other public shareholders by offering to purchase their shares at the same price at which date buy-back will be undertaken by BNL, after completion of buy-back offer by BNL. It also addressed letters to all share holders holding more than one percent shares and out of them three share holders namely TM Investments Limited, Sanmati Properties Limited and Vineet Jain had expressed their interest to provide exit to other shareholders i.e. to participate in the Proposed Exit Offer. However, in the wake of the two Writ Petitions filed by the Shah Group, BNL was restrained from finalising the buy-back offer by the Bombay High Court by its Order dated

17.10.2022. 11th June 2025 SEBI MATTER_.doc On 03.12.2022, the buy-back offer lapsed and a total of 4.046 percent of shares tendered by the interested share holders were held in escrow accounts.

30. Mr Dhond has invited our attention to heap of correspondence entered with SEBI in order to support his contention that SEBI was kept in loophole throughout the said process when BNL was attempting to comply with the settlement order and according to Mr. Dhond, the exchange of communications placed on record is clearly reflective of the fact that SEBI was conscious of the steps taken by BNL and it never contemplated the compliance in a particular fashion.

31. The submission of Mr. Dhond is that SEBI was aware of the steps taken by BNL to comply the non monetary terms specified in the settlement order, as it had set out the manner of compliances by BNL. BNL also sought in person meeting with SEBI to explain the matter in detail and it addressed a detailed representation on 08.09.2023, requesting for a hearing and this representation, according to Mr. Dhond, categorically amounted to its written submission, as it apprehended that SEBI was likely to take a decision on revocation of settlement order. BNL categorically highlighted, in its representation that the buy-back process for 30 days would be followed by the Proposed Exit Offer by TM Investments Ltd., Sanmati Properties Ltd., and Vineet Jain for a period of 60 days at the same exit price in two steps. It also stated that there was statutory limitation in 11th June 2025 SEBI MATTER_.doc implementation of buy-back, in the wake of the restraint order dated

17.10.2022 and a request was made that SEBI must keep in mind the interest of all the share holders, as Ashok Shah and PINA Shah Groups had obtained a restraint of buy back, thereby jeopardising the exit of willing 4.046 percent share holders as against 1.27 percent holding of the Shah Group.

32. Mr. Dhond has also invited our attention to the steps taken by BNL pursuant to the passing of impugned order which include the application filed by Ashok Shah in the Bombay Petitions seeking revival of the Petitions and also seeking restraint on the public announcement issued by BNL in relation to the buy-back on 11.12.2023, which was not entertained by the Court. According to him, the BNL took all the requisite steps in compliance of the settlement order under the supervision of SEBI but everything was thrown in air, as SEBI was perturbed because it was asked to disclose its internal record and the only way to wriggle out of the whole procedure was to revoke the settlement order. Further, the timing of passing of the impugned order is very crucial as per Mr. Dhond this order has been passed only after SEBI was directed to furnish copies of internal noting and communications with respect to the settlement order to the Ashok Shah Group and, therefore, even in his opinion, the issuance of impugned order is a knee jerk reaction of SEBI, to avoid disclosure despite the fact that on 11th June 2025 SEBI MATTER_.doc

30.09.2023 SEBI itself had made a statement before this Court that after taking instructions from the new panel of WTM's, it did not intend to revoke the Petitioners' settlement order. With no material and information having surfaced, what made SEBI revoke the settlement order is a point to ponder upon according to Mr. Dhond as in a hurried manner the impugned order was passed without affording an opportunity to the Petitioners to defend itself or by adhering to the principles of natural justice as so much was the hurry that the revocation order was a non-speaking and a unreasoned order.

33. In support of his submission, Mr. Dhond has also placed reliance upon catena of decisions. He would rely upon the decisions of the Apex Court in case Standard Chartered Bank & Ors. vs. Directorate of Enforcement & Ors.8, as regards principle of corporate criminal liability. Reliance is also placed on the decision of the Indore Development Authority vs. Manoharlal & Ors.9 to submit that when there is a disability to perform a part of the law, such a charge has to be excused particularly when performance of the formalities prescribed by a statute is rendered impossible by circumstances over the person's concern had no control and in such a case it has to be taken as a valid excuse. In addition he would also place reliance upon the decision in the case of Reliance Industries Limited vs. Securities and Exchange Board of India & ors.10 in support of 8 2005(4) SCC 530 9 2020(8) SCC 129 10 2022 (10) SCC 181 11th June 2025 SEBI MATTER_.doc his submission that SEBI is a regulatory body and is cast with a duty to act fairly while conducting proceedings or initiating any action against the parties and it must act in accordance with the Rules prescribed by law. Further reliance is placed upon the decision of the Bombay High Court in case of Milind Patel vs. Union Bank of India & Ors.11 with reference to the orders of proceedings of the settlement commission. Mr. Dhond has also placed reliance upon the report on the settlement mechanism by the High Level Committee to review the enforcement and settlement mechanism, and it is intended to encourage settlement.

34. Learned Senior Counsel, Mr. Bhatt, representing SEBI, the statutory body, has rebutted the arguments advanced on behalf of the three learned Senior Counsel in favour of the Petitioners and, according to him, the five points which were raised by the Counsel for the Petitioners are devoid of any merit and substance. He would summarise the arguments of the Petitioners on five major counts, namely, (i) violation of principles of natural justice - the order being unreasoned; (ii) because of the orders passed by the Bombay High Court, BNL could not comply with the non-monetary terms of the settlement order; (iii) manner of passing of the impugned order is not in terms of the Regulation of SEBI; (iv) the settlement order reflected individual settlement qua the Petitioners and on failure on part of BNL, it could not have warranted a wholesome withdrawal of the settlement order by taking recourse to Regulation 29; and 11 2020(4) SCC OnLine Bom 745 11th June 2025 SEBI MATTER_.doc (v) SEBI's revocation of the settlement was a knee-jerk reaction as the Bombay High Court ordered disclosures.

35. Mr Bhatt has put before us a compilation of documents which include the various orders passed by the Court and while dealing with the objection that SEBI had passed the order of revocation to defeat the orders of disclosure as prayed in the Writ Petition filed by Ashok Shah Group, and in specific prayer clause (g), he would submit that SEBI never hesitated in making full disclosure before the Court and by inviting our attention to the order dated 05.09.2023, he would submit that SEBI fairly made a statement before the Court that there was a change in the Whole Time Members (WTM) of SEBI and that it would be in a position to take a decision whether the settlement order in question has to revoked and if it stands revoked, in such an event further adjudication of the Petition would not be necessary. To be fair to the Court and to the opponent, Mr. Bhatt would submit that on 19.10.2023, when the Court considered the prayer clause (g) of the Petition, it is the private Respondents who objected to the disclosure of the documents but SEBI had been fair as it placed before the Court the copies of the Show Cause Notice dated 20.10.2020 and also the application for settlement filed by BNL and the Court directed that the documents be placed in a sealed cover.

36. It is on 23.10.2023, the Division Bench by a detailed order granted prayer clause (g) of the Petition and though in the said order, an observation of the Court is to the effect that SEBI had resorted to all 11th June 2025 SEBI MATTER_.doc possible efforts not to comply with the order of 23.10.2023 and to the effect some more observations to paragraph 29, it is a specific contention of Mr. Bhatt that SEBI never objected to furnishing of the documents, as when the said order was passed, SEBI put its firm stand that principal prayer clauses of the Petition i.e. prayer clauses (a) and (b) do not survive for adjudication as the settlement order itself was revoked by SEBI. This argument according to him was supported by the Counsel representing Respondent Nos. 2, 7, 8 and 9 as they unanimously contended that the settlement order dated 12.09.2022 stood revoked and therefore the show cause notice issued to Respondent nos. 2 to 9 are now required to be taken forward and decided on merits.

37. It is in the wake of these peculiar circumstances, the Learned Senior Counsel would vehemently submit that SEBI never adopted a stand of confidentiality of the documents and in fact it was always ready and willing to place all the relevant documents involving the settlement proceedings before the Court. Mr. Bhatt would also submit that even SEBI filed a Special Leave Petition before the High Court but this Petition was restricted to the interpretation of Regulation 29 of the SEBI (Settlement Proceedings) Regulation 2018, framed under Section 50 (j)(b) read with Section 30 of the Securities and Exchange Board of India Act, 1992. Mr. Bhatt would also place before us the copy of the Special Leave Petition, which 11th June 2025 SEBI MATTER_.doc has formulated the question of law in specific as to whether SEBI holding the documents relating to the settlement proceedings in a statutory fiduciary capacity under Regulation 29 of the SEBI Regulations, 2018 can be directed contrary to the Regulations, to disclose details of settlement applications, etc. In short, it is the submission of Mr. Bhatt that SEBI never dithered from supplying the necessary documents in terms of prayer clause (g). Thus, the contention of Mr. Dwarkadas that the passing of the impugned order by SEBI was a knee-jerk reaction to the High Court's order dated 23.10.2023 is a misconstrued argument and in any case, he would submit that finally the Special Leave Petitions before the Apex Court were disposed off and SEBI never hesitated in disclosing the documents to the Court.

38. Coming to the second point as regards the common settlement order being passed against the six entities but the non-compliance being only attributed to BNL, the other entities/the Petitioners did not put to disadvantage, according to Mr. Bhatt, the show cause notice dated 28.10.2020 which he has placed before us clearly establish the connect of the entities with one another and the settlement order had categorically mentioned that any non-compliance of the same would result into consequences of its revocation without making any distinction as to on whose failure to abide by the settlement order would stand revoked. 11th June 2025 SEBI MATTER_.doc Coming to his prominent submission, rebutting the argument of Mr. Dhond representing BNL that the compliance of the settlement order became an impossibility, he would invite our attention to the settlement order dated 12.09.2022 and submit that because show cause notices being issued alleging that the Petitioners were the promoters and who filed settlement applications proposing to settle, through a settlement order, without admitting or denying the findings and conclusions of law, in pursuance to the enforcement proceedings being initiated against them and the settlement was accepted, after following a procedure, by obtaining inputs from the IC as well as the HPAC, which considered the settlement terms proposed by the applicants and recommended the case for settlement. According to Mr Bhatt, the order of settlement made it clear that the exit offer shall be given to its shareholders within a period of 15 days and it would be kept open for a period of three months. The order made it very clear that if there is no compliance, SEBI reserved its rights under Regulation No. 28. He has also placed before us a compilation of documents which is comprise of the communications exchanged between SEBI and BNL. According to him, there were two options open, either to buy-back or provide an exit offer to buy-back the equity shares of the company and, according to him, BNL passed a resolution to be compliant with the SEBI settlement order, thereby resolving to buy-back of up to 30,958 11th June 2025 SEBI MATTER_.doc fully paid up equity shares of Rs.10/- each of the Company, representing 1.06 percent paid up of equity shares of the Company (exit offer) at a price of Rs.11,229/- per equity share, being the same exit price at which an exit offer was given in 2019, payable in cash for an aggregate amount of up to Rs.34,76,27,382/- equivalent to the maximum permissible buy-back amount, in accordance with the limit of aggregate of 25% of the fully paid-up equity share capital and free reserve of the company, as per the Unaudited and Limited Reviewed Financial Statement of the Company for the period ending on

3.08.2022. Inviting our attention to the circular of SEBI, dated 10.10.2016, which was the guideline which BNL ought to have been followed, according to Mr Bhatt, it failed to comply with the said guideline. He would submit that on 27.09.2022, the BNL wrote to the Settlement Department, Enforcement Division-II, as a compliance of the non- monetary terms of settlement to provide an exit offer to its public shareholders for a period of three months, after the order and referred to the resolution passed by the company. However, it is the specific contention of Mr Bhatt that they followed it to buy-back only to the extent of 1.067%, but leaving 21.33% still not being offered for buy- back. As far as the remaining shareholders are concerned, it was communicated that the company had received letters/confirmations 11th June 2025 SEBI MATTER_.doc from shareholders holding an aggregate of 77.83% of the total paid-up share capital of the company, stating their willingness to continue to remain as shareholders of the company and not to participate in the upcoming exit offer of the company, thus leaving 21.33% of the total equity shares outstanding even after the buy-back offer. Thus, according to Mr Bhatt, BNL restricted the buy-back offer only to

1.067% of the shareholders.

39. Mr. Bhatt has placed before us the correspondence exchanged with BNL, to indicate that BNL did nothing to ensure compliance of the non-monetary terms of the settlement order. He would invite our attention to the communication addressed by SEBI, to BNL, right from 03.03.2023, when it sought compliance status with respect to the settlement (1:24) order in the matter of BNL Limited, and sought to know about the status of the buy-back offer, as well as the compliance with respect to the settlement order. By communication dated 10.03.2023, Bharat Nidhi submitted its response, submitting that the company had approached certain public shareholders, asking if they are willing to come forth and provide an exit offer to other public shareholders of the company, for a period of two months following the buy-back, (referred to as the 'Proposed Exit Offer'). However, it also informed that since the buy-back offer has been kept on hold in the Bombay High Court by the interim order, it is posing a difficulty in taking any further steps with respect to the 11th June 2025 SEBI MATTER_.doc Proposed Exit Offer. The statutory body was therefore informed that the company is unable to complete the buy-back offer and the Proposed Exit Offer in the wake of the interim orders issued by the Bombay High Court.

40. According to Mr. Bhatt, when SEBI querried with BNL, with specific reference to its public announcement, as it proposed to buy- back up to Rs.1.067 of the paid-up equity capital through buy-back offer and, with reference to the three public shareholders who had indicated their willingness to provide an exit offer to the remaining shareholders for a period of two months following the buy-back offer. However, it was clearly indicated that the said shareholders had put up a maximum ceiling on the amount that can be deployed towards the purchase of the shares, and this amounted to Rs. 105 crores. First of all, according to Mr. Bhatt, computing on the basis of the said disclosure, SEBI indicated that the aforesaid three shareholders can purchase maximum of 3.22% paid-up capital of BNL, and therefore BNL shall provide the status of exit opportunity provided to the remaining shareholders holding of 17.87% of paid-up capital of BNL in terms of the settlement order. It also requested BNL to provide total number of shares of the company as on 31.03.2019 and 30.09.2022, with any deviation, if any. SEBI, however was of the view that BNL however remained as evasive as possible, as it communicated through its Company Secretary, 11th June 2025 SEBI MATTER_.doc but the compliance of the settlement order was not in foresight, as could be reflected from the entire correspondence placed before us. Secondly, on 24.05.2023, SEBI addressed a communication to BNL, stating that the complete exit process for the remaining shareholders, i.e. 22.17% shareholding has not been submitted and BNL was therefore advised to submit the process undertaken to provide exit to the remaining 22.17% shareholders as per the conditions mentioned in the settlement order dated 12.09.2022, and also submit a copy of the consent provided by the remaining shareholders. This received a response from BNL, by stating that the company is willing and has in fact given an offer to all its shareholders to participate in the buy-back offer, and all the remaining shareholders holding an aggregate of 22.17% were free to apply and participate in the buy-back offer at their option. Ultimately, it categorically informed SEBI that the company's obligation is limited to providing an exit offer for a period of 90 days to its public shareholders. However, the shareholders retain their rights to choose to not avail/participate in the exit opportunity offered to them, if they so wish, as no shareholder is legally bound to provide an express undertaking that they have chosen to remain as a shareholder in the company, but they may simply choose to not tender their shares as a part of the exit offer, by conveying their intention to continue the company as a shareholder. 11th June 2025 SEBI MATTER_.doc

41. According to Mr. Bhatt, BNL attempted to offer a stepwise plan which, according to him, is their gateway to escape and ultimately, BNL informed SEBI that their ability to complete the exit offer has been restrained and complicated on account of the litigation by the minority shareholders, who had asked for implementation of the exit offer and sought injunction. According to Mr. Bhatt, the pendency of the legal proceedings was put up as a shield for BNL not complying with the terms of settlement. SEBI continued with its stand when on

26.05.2023, it sought a list of shareholders who had tendered their shares in the buy-back offer announced by BNL, vide public announcement dated 2.09.2022 in the format which was also furnished. It also sought compliance in respect of remaining 6,11,868 shares as BNL was required to provide exit offer in respect of 29,00,132 shares (100%), whereas BNL received undertaking to continue as shareholders in respect of 22,57,307 shares.

42. On 08.09.2023, BNL once again addressed a communication to SEBI in form of a representation regarding compliance of the settlement order dated 12.09.2022 since SEBI had made a statement before the High Court in the pending Writ Petitions in its order dated

05.09.2023, to the effect that since there was a change in the Whole Time Members of SEBI, SEBI would now be in a position to take a decision as to whether settlement order in question has stood revoked, and if it has, in that case, adjudication of the proceedings is not called 11th June 2025 SEBI MATTER_.doc for. In this communication, which has been projected as a stand as BNL, where a huge cloud has been raised about the proposed decision to revoke the settlement order, or whether the settlement order stood revoked in the wake of the deeming provision, BNL accused SEBI of not following principles of natural justice.

43. According to Mr Bhatt, in the present case, the Petitioners cannot try to project non-compliance of principles of natural justice, as it is a peculiar case where consent order of settlement has been passed, but when the question came of its compliance, the Petitioners are dragging their feet and claimed an opportunity of hearing. According to him, the Petitioners need not be heard personally, as the settlement order made the terms and conditions of compliance very clear, and the Petitioners, including BNL, had rightly understood the context of the order, but still committed its breach. According to Mr Bhatt, this is not a case of impossibility of performance, and rather, by inviting our attention to the correspondence that is placed on record, is a specific contention that BNL had no plan as to how they were going to ensure compliance of the order of settlement, but all the while, they attempted to shield themselves by taking recourse to the interim order passed by the High Court in the Petition filed by Shah Group. Knowing very well that they were in breach of the order, according to Mr Bhatt, BNL filed a detailed representation on 08.09.2023, praying for an opportunity of hearing, which has been rightly rejected. 11th June 2025 SEBI MATTER_.doc

44. Mr Bhatt has distinguished the decision cited on behalf of the Counsel for Petitioners in case of Rajesh Agarwal (supra), and he would submit that the civil consequences in the said case were so grave that no decision could have been taken by hearing. He would rely upon the decision of the Apex Court in case of State of U.P. vs. Sudhir Kumar Singh12, to support his submission that before a party alleges violation of principles of natural justice, rendering a decision to be void, it is necessary for it to establish prejudice and the Court would look into this aspect as to whether prejudice is more than an apprehension or even a reasonable suspicion of a litigant, as the prejudice should be a matter of fact or be based upon a definite inference of likelihood of prejudice flowing from non-observance of natural justice. To elaborate his submission, Mr Bhatt would submit that in the present case, there has been no prejudice caused to the Petitioners because they were not afforded an opportunity of hearing before the decision to revoke has been taken as all the facts involved are admitted and not denied, as it is admitted that a settlement order was passed which was subject to ensuring certain compliances and there has been no compliance of the non-monetary terms by BNL. Further, according to Mr Bhatt, BNL is not in a position to comply and nor did they ever offer a plausible explanation or a road map to SEBI as to how they would ensure compliance of the settlement 12 (2021) 19 SCC 706 11th June 2025 SEBI MATTER_.doc order. At the end of the entire correspondence, ultimately BNL raised its hand and categorically stated that it is not possible for it to comply with the order and therefore, according to Mr Bhatt, there is no question of violation of principles of natural justice as the Petitioners are now harping upon the sacrosanct principle of non-observance of principles of natural justice and therefore the decision having been rendered void, which is a non-acceptable argument.

45. Another limb of argument of Mr Bhatt is the statutory provisions and the Regulations formulated thereunder. He has invited our attention to Section 19 of the SEBI Act 1992, which is a provision as regards the delegation and permit the Board, by general or special order in writing, to delegate to any member, officer of the Board or any other person, as may be specified in the order, such of its powers and functions under this Act as it may deem necessary, subject to such conditions. He would then proceed to invite our attention to Regulation 28 of the Securities and Exchange Board of India (Settlement Proceedings) Regulations 2018, when he would submit that if the power which is to be exercised by the Board under Section 28, this provision has to be read along with Section 19 where delegation of power is permitted. Therefore, according to him, the panel of Whole Time Members (WTM), are entitled to act as delegatee and the revocation of settlement orders, the authority has been delegated under the new regime of 2019 on the members of the WTM 11th June 2025 and therefore there is no illegality when the order is passed by the SEBI MATTER_.doc delegate. In short, it is the submission of SEBI that the objections raised on behalf of the Petitioners in raising a challenge to the impugned order has no merit and substance and therefore the revocation order passed by SEBI falls within the four corners of the Regulation of 2018 and in absence of any prejudice being shown, on not affording an opportunity before the impugned order has been passed, deserves to be upheld and the petitions are liable to be dismissed.

46. Learned Senior Counsel Mr. Navroze Seervai and Mr. Gaurav Joshi, representing Respondent nos. 9 to 25 and Respondent nos. 26 and 27 in Writ Petition No. 3997 of 2024 referred to as 'Ashok Shah Group' and ‘PINA Shah Group’, the minority public shareholders of Bharat Nidhi Limited, which have also supported the stand of SEBI. Mr. Seervai has submitted before us that BNL is the single largest shareholder in Bennett Coleman and Company Limited as it holds 24.41% of shareholding and also in its wholly owned subsidiary Bennett Property Holdings Company Limited into (BPHCL) are unlisted companies. According to him, based on publicly available details of investments of the two companies the valuation exercise carried out by a category one merchant banker has valued BCCL at approximately 79,000 crores and BPHCL at 3226 crores and BNL's 11th June 2025 SEBI MATTER_.doc direct holding in BCCL is valued at approximately 20,000 crores and indirect holdings approximately at 40,500 crores. According to Mr. Seervai it is for this reason that BNL's share presented a lucrative investment opportunity for the Respondents (the minority shareholders) and they invested in BNL. He would unfurl before us the true nature of control over BCCL's holding companies as he would submit that it is owned and controlled by certain companies in which Mr. Vineet Jain, Mr. Sameer Jain and their immediate family members have direct and indirect holding. According to him, Vineet Jain group along with BNL Arth Udyog Limited TM Investment Limited and Sanmati Properties Limited, has 50% shareholding in BCCL whereas Mr. Sameer Jain along with Vineet Jain and four other limited companies have 50% shareholding in BCCL. The entities in Vineet Jain Group and Sameer Jain Group are owned and controlled through a complex web of cross-holding and once this is eliminated the ultimate beneficiaries are Vineet Jain and Sameer Jain and he would accuse that despite the fact that BNL is owned and controlled by Vineet Jain, it has falsely represented itself as a promoter-free company and the company sans any promoters has only public shareholders, which claim is absolutely false. According to Mr. Seervai the minority shareholders have consistently sought disclosure/compliance from BNL, as it had failed to disclose the real identity of its promoters by making false and 11th June 2025 SEBI MATTER_.doc misleading claims in violation of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015, as well as SEBI (Substantial Acquisition of Shares and Takeovers) Regulation 2011 and SEBI (Prohibition of Insider Trading) Regulations, 2015 and as BNL declared itself to be a promoter free company. In addition according to him, BNL has failed to comply with applicable securities law that mandated all listed companies to have minimum public shareholding of 25% (Minimum Public Shareholding Norms). According to Mr. Seervai, if SEBI had enforced the applicable securities law, BNL would have required to reduce its promoter shareholding percent in accordance with the NPS norms and this would have allowed BNL to be listed as a company on the Nationwide Stock Exchange, and provided ready marketability and liquidity to the script, ensure proper supervision and control over dealings in the script market driven valuation as well as prestige and brand value.

47. The Respondents, according to Mr Seervai, since 2013 filed multiple complaints with SEBI regarding violation of NPS norms and disclosure requirements inter alia by BNL along with connected entities under the control of Mr. Vineet Jain and Mr. Samir Jain along with other members of Jain family, however SEBI chose to turn blind eye towards the issues which were highlighted and did not take any action. According to Mr. Seervai, the action of the Shah Group was always directed towards achieving liquidity and fair price discovery in 11th June 2025 SEBI MATTER_.doc respect of their investments, in accordance with law. The complainant therefore sought that SEBI should identify the true extent of the promoter holding in BNL and ensure that it is compliant with NPS norms as well as SEBI's exit circulars in respect of ELCs by having BNL listed on a Nationwide Stock Exchange, which would ensure a more dispersed public shareholding, promoting liquidity and price discovery. In addition to the minority share holders i.e. the Shah Group, various other groups had addressed numerous correspondence to SEBI alleging violations by BNL and other connected entities which had resulted into institution of proceedings before Delhi High Court including the case of Mr. Aditya Agrawal & Ors. vs. SEBI13 .

48. Alleging violation of NPS norms and disclosure requirement inter alia by BNL and other connected entities under the control of Mr. Vineet Jani along with other members of the Jain family he would submit that Delhi Stock Exchange de-recognized BNL pursuant to SEBI circulars in the year 2014 and BNL obtained listing on Calcutta Stock Exchange. However, in 2015, BNL came to be placed on dissemination board of Bombay Stock Exchange, which provided a platform where transaction could take place between the buyer and seller on trade for trade basis. The placement of BNL on dissemination board resulted in self operating disadvantages, but BNL preferred to remain so and ultimately, in the year 2019, BNL was moved to dissemination board of NSE. In the year 2019, it issued a postal ballot notice seeking 13 Writ Petition (C) 105 of 2019 11th June 2025 SEBI MATTER_.doc shareholder approval for buy-back up to 21,791 equity shares and this prompted the minority shareholders to file a complaint on SEBI SCORES portal whereby issues relating to non-disclosure of promoter shareholdings of DNL and violation of minimum public shareholding requirement were raised. This complaint was however summarily closed by SEBI which emboldened BNL to continue with its illegality. The minority shareholders approached the Securities Appellate Tribunal by filing an appeal and certain harsh words were used by the Tribunal reminding SEBI that it has a role to play as a regulator but it has failed to perform its duties and had kept the complaint pending for more than six years which speaks volumes and directed to decide the representation within a period of six weeks. He preferred an appeal against this order before the Supreme Court which confirmed the directions of the Appellate Tribunal and directed SEBI to pass appropriate orders. This extensive exercise ultimately resulted in issuance of show- cause notice to the Petitioners in the year 2020, pursuant to which the settlement applications came to be filed separately by the Petitioners and the settlement order came to be passed on 28.09.2021. The minority group had filed a Writ Petition raising a challenge to the settlement proceedings but was allowed to withdraw it with a liberty to approach the Court upon an appropriate order being passed by SEBI. 11th June 2025 SEBI MATTER_.doc

49. According to Mr Seervai, when the settlement order was passed pursuant to the show cause notices being issued by SEBI, the order clearly recorded that upon the settlement application being preferred, the settlement is granted “without admitting or denying”, specific allegations in the show cause notice. His first contention is that SEBI in stipulating so in the order of settlement had acted in violation of its own Regulations and SEBI should have not allowed such a settlement at all. According to him, even assuming that the settlement order was passed, the settlement was based on voluntary undertaking given by BNL and its promoters, by giving the exit offer to all public shareholders on certain terms, it ought to have been given after considering its effect, when this was voluntarily undertaken to be complied with, that there is no question of they wriggling out of it on the ground that it is not possible for them to ensure compliance. According to him the argument advanced on behalf of the Petitioners is a fanciful dishonest argument when they talk of 'buy- back', and they offer it only to one percent of the shareholders. It is his specific contention that the use of the word 'exit' was coined as an afterthought after the settlement order was passed. Mr. Seervai is critical of the lackadaisical approach of SEBI as it did not initiate any action against BNL, he accused SEBI that the Petitioners are turning deaf ear in complaints filed by the minority share holders from time to time. He would submit before us that SEBI 11th June 2025 SEBI MATTER_.doc initiated action for violation of its Regulations after thirteen years and despite this, permitted a settlement, thereby condoning serious lapses of the Petitioners.

50. Having unconditionally accepting the terms and conditions set out in the order of settlement which were routed through the IC as well as the HPAC of SEBI, according to Mr. Seervai, there is no question of going back on the order of settlement. According to him, the buy-back was made only to 1.044% of the shareholders, which was clearly in breach of the stipulations in the settlement order as the buy-back was intended for all shareholders and not for a miniscule percentage. It is his specific contention that the offer was being kept open for three months and the BNL kept it open only for one month and therefore the consequences are res ipsa loquitur as there was a breach in stipulations of the settlement. Mr. Seervai has invited our attention to Regulation 28, which has been invoked while revoking the settlement order on 10.11.2023 and, according to him, the Regulations itself is operating and once there is a failure to ensure compliance with the stipulations in the settlement order, whether any order is passed or not by SEBI, the consequences follow. According to him, once this self operating clause kicks in, the subsequent events are irrelevant. On expiry of fifteen days, according to him, stipulations in the settlement order being failed, the proceedings did revive. 11th June 2025 SEBI MATTER_.doc

51. Further, Mr. Seervai has placed before us the sequence of events to submit that BNL, pursuant to the settlement order being passed, issued a postal ballot notice seeking shareholder approval for buy-back of 30,958 shares, which only amounts to 1.067% and the voting on the buy-back offer was kept open from 27.09.2022 to 26.10.2022. It is his specific contention that the postal ballot notice demonstrate that the exit offer was only to 1.06% of his shareholders, which was not in compliance with the terms of the settlement order, which contemplated providing an exit to all public shareholders, i.e., 100% shareholders of BNL. Further, the explanatory statement to the postal ballot notice declared that there are no promoters in the company, which is contrary to the terms of the settlement order. In addition, it is his specific submission that the postal ballot notice failed to make any mention of the purported exit opportunity offered by the public shareholders, the same being represented to be part of the exit offer in compliance with the settlement order. In addition, BNL also failed to disclose that there was a possibility of buyback offer price being announced by Delhi High Court and therefore, according to Mr. Seervai, BNL acted deceptively right from the beginning. According to Mr. Seervai, the compliance report clearly establish that BNL has failed to comply with requirement of paragraph 8(iii) of the settlement order and therefore the settlement order, which is a 11th June 2025 SEBI MATTER_.doc composite order had ceased to operate against all the Petitioners from that date. He would submit that BNL cannot now contend that after issuance of the settlement order, its Board of Directors recognised purported legal difficulties in complying with the stipulations therein, as BNL was always aware of the consequences of undertaking to ensure compliance and in fact, BNL had previously done buy-backs and therefore it was aware of regulatory limitations posed by buy-back. Thus, according to Mr. Seervai, BNL adopted a half-hearted approach and when it addressed communications to the three entities, Sanmati Properties, TM Investments and Vineet Jain taking their expression of interest to provide exit to the shareholders, they replied indicating their willingness, for a period of two months, after closure of BNL's buy-back offer at the exit price of Rs. 11.229 per equity share for aggregating amount of Rs.50 crores and Rs. 10 crores respectively. Thereafter, when the Writ Petition No. 447 and 530 of 2023 was filed before the Bombay High Court by his client, an ad-interim order was passed on 17.10.2022 directing BNL to proceed with the buy-back by inviting offers but not to finalise the same. Once again, on

02.11.2022, BNL issued a public announcement informing that the buyback would be kept open from 04.11.2022 to 03.12.2022 and a public announcement was also issued in Financial Express and Jan Satta informing inability to finalise the buy-back offer on 18.12.2022. On 19.12.2022, BNL informed SEBI that it cannot take any further 11th June 2025 steps with respect to the Proposed Exit Offer due to the interim order SEBI MATTER_.doc passed by the High Court. According to him, BNL had demonstrably failed to comply with the settlement order on the ground that the High Court's interim order prevented it from doing so, however, according to Mr. Seervai, it is a false cover as for whatsoever reason, since the Petitioners had unconditionally accepted the settlement order and defended it in the proceedings instituted by his client, they are estopped from disputing or disowning any terms of the settlement order. Mr. Seervai is very harsh in submitting that if they have derived the benefit of the settlement order, as a result of which the charges against them have been dropped, they ought to have been conscious and meticulous in complying with the terms and conditions subject to which the settlement order was passed.

52. It is a specific contention of Mr. Seervai that there is a distinction between an exit and the buy-back as the settlement order did not require that exit was to be provided by way of a buy-back offer and, therefore, any purported statutory restraints arising as a result of electing to offer an exit through a buy-back shares, is a problem created by BNL itself and it cannot be cited as a 'statutory restraint'. It is a specific contention that BNL had ample opportunity to consider the feasibility of complying which in itself had put in if the HPAC were accepted and therefore now it is not open for it to wriggle it out once 11th June 2025 SEBI MATTER_.doc the settlement order is passed, it cannot be modified and that too by an unilateral interpretation/application of its terms by the applicants, i.e. BNL and other entities. Mr. Seervai has also insisted in submitting that revocation of the settlement order upon non-compliance in terms of Regulation 28 is automatic and is an operation by law, which cannot be stalled. According to him, providing BNL and the entities with an opportunity of notice of hearing in the event of an apprehended violation of terms of settlement order is wholly unnecessary and rather it would defeat the purpose of having brought the litigation to a quietus and in fact, it would impart to revisit or relocate the settlement terms through an adjury criteria process relating to revocation. He would also submit that Regulation 28 does not contemplate an opportunity of hearing and failure to provide a hearing would not render an action illegal or illegal as no prejudice is caused to the parties who have abjectly failed to comply and abide by the settlement order. According to him, natural justice does not necessarily or invariably contemplate a personal hearing and in cases where facts are undisputable/admitted, it is the duty of the Court to determine if prejudice has been caused on account of a party not being afforded a personal hearing. He has placed reliance upon K. K. Chari v. R. M. Seshadri14, as also decision in case of S. L. Kapoor v. Jagmohan & Ors15, in support of his contention. He