Analysis of SAT Judgement in Entegra Ltd. vs. NSE & Ors.

The consequences of delisting to multiple stakeholders are high and taking just a technical view, though within four corners of law, may not be appropriate in concluding every issue of delisting of the securities of a listed company in a purely technical way.

In the present matter we note that the securities have remained suspended for trading only from October 2016. Though this is more than six months but the evidence brought before us appears a genuine interest of the appellant company in rejuvenating their business and therefore continuing with listing may be in the overall interest of the stakeholders.

We have perused the documents produced before us and it is on record that the appellant has been regularly in communication with NSE. It is also evident from records that the dispute / litigation the appellant had with other entities on which certain reliefs have been obtained by the appellant from various fora, including the Apex clearly show the positive intention of the appellant. Therefore, just taking a technical view, though within four corners of law, may not be appropriate in concluding every issue of delisting of the securities of a listed company in a purely technical way. The consequences of delisting to multiple stakeholders are high. It is not only the investors in such securities who are the stakeholders but even the company is also part of the overall interest of the securities market. Therefore, when in a particular case where sufficient evidence is available to show that the company is making serious efforts in compliance and seeking only some extra time the authorities should show some flexibility.

Given these peculiar facts and reasons relating to the appellant company and the fact that except one all other non-compliances have been said to be addressed by the appellant in an affidavit, we are of the view that it will be in the interest of justice to provide one more opportunity to the appellant. Accordingly, we set aside the impugned order communicated to the appellant vide letter dated November 29, 2018 and remand the matter to the Delisting Committee of NSE to look at the facts, including the implications of promoter stake pledge, afresh and after giving an opportunity of hearing to the appellant pass a fresh order on merit and in accordance with law.

Judgement link : http://sat.gov.in/english/pdf/E2019_JO2018482.PDF