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Appeal in delisting matters can be filed under section 23L of SCRA

Finsec Law Advisors

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In its February 25, 2019, order in Synergy Cosmetics Ltd. v. BSE, the Securities Appellate Tribunal (“SAT”) delved into the interpretation of two provisions of the Securities Contract Regulation Act, 1956 (“SCRA”), namely Section 21A and Section 23L, under which appeals can be filed before SAT.

Section 21A(2) is a specific provision which provides for appeal against a decision of a stock exchange delisting the securities of a company. This is required to be filed within fifteen (15) days from the date of such decision. Under this section, SAT has a limited power to condone a delay of only up to one month. On the other hand, Section 23L is a general provision for appeal before SAT against a decision of SEBI or stock exchanges. The appeal has to be filed within forty-five (45) days, and SAT’s power to condone the delay herein is not bound by a pre-specified time-frame.

In the instant matter, BSE delisted the securities of Synergy Cosmetics (“Synergy”). Synergy filed an appeal challenging this decision of BSE before SAT under Section 23L, with a delay of 73 days. It was contended by BSE that since Section 21A specifically provides for appeal against a delisting decision, the appeal is required to be filed under Section 21A. Further, as delay of 73 days cannot be condoned by SAT under S.21A, it was argued that the appeal was liable to be dismissed.

Rejecting this contention, SAT held that when two provisions dealing with remedies are available, it is open to an appellant to elect either of them. Consequently, an appeal against delisting could be filed under Section 23L by Synergy.

It is an established position in law that where two remedies are available, the aggrieved party may opt for either of them. In such a situation, a specific provision does not exclude a generic provision. Therefore, SAT has rightly applied the doctrine of election in the current matter to hold that an appeal can be filed under either of the provisions.