Calcutta, Aug. 19: A Calcutta High Court division bench today declined to stay a trial bench order dismissing a Rose Valley petition challenging market watchdog Sebi’s power to regulate deposit-mobilising firms.
The division bench of Chief Justice A.K. Mishra and Justice Joymalya Bagchi also declined to impose an interim stay on the trial bench’s order asking Rose Valley Real Estate and Construction Company to pay Rs 10 lakh as the cost of the case.
“This court will hear the appeal moved by Rose Valley against the single-judge bench’s order again on August 21,” the Chief Justice said.
Justice Dipankar Dutta had on July 23 dismissed Rose Valley’s petition after Sebi asked the company to wind up its investment-mobilising business.
Appearing for Rose Valley, advocate Sudipta Sarkar said: “Two sections of the Sebi Act, Sections 11AA and 12, which empowered it to compel a company running collective investment schemes to register, were contrary to the provisions laid down in the Constitution.”
The lawyer pleaded that the division bench should scan the trial bench’s judgment again.
Sebi lawyer Prasanta Dutta urged the court not to entertain the plea.
“The Union government recently gave more power to my client to take action against the companies running businesses under collective investment schemes without registering,” Dutta said.
The division bench then said it would hear the case again on August 21.
Rose Valley had moved the petition before the single-judge bench after Sebi issued a notification accusing the company of flouting norms laid down under the Sebi Act.
The notification also asked the company to stop collecting money as it was not registered with Sebi.
“The present case will decide the fate of many other companies, which have been running their businesses under the collective investment scheme without prior permission from Sebi,” said a senior high court lawyer.