The petitioners challenged the validity of certain regulations under the SEBI (Settlement Proceedings) Regulations, 2018, and the rejection of their settlement application by SEBI. The court dismissed the petition, upholding the validity of the regulations and rejecting claims of arbitrariness and excessive delegation.

Acts and Sections Discussed:

1. Securities and Exchange Board of India Act, 1992 (SEBI Act):

   • Section 15-JB: Settlement of administrative and civil proceedings.
   • Sections 11, 11-B, 11-D, 15-I: Powers related to investigation and adjudication.

2. SEBI (Settlement Proceedings) Regulations, 2018:

   • Regulation 6(1)(f): Imposing conditions precedent for settlement.
   • Regulation 13(2)(ba): Conditions precedent by the Internal Committee (IC).
   • Regulation 8: Stay on final orders during pending settlement applications.

3. Constitution of India:

   • Article 14: Challenge on grounds of arbitrariness.

Para-wise Main Facts and Analysis with Headings:

1. Parties and Proceedings

• [Para 1-4]
  • Petitioners: Abans Enterprises Ltd. (a listed company) and its promoter, Abhishek Bansal.
  • Respondent: Securities and Exchange Board of India (SEBI).
  • Petition: Challenged the validity of SEBI (Settlement Proceedings) Regulations, 2018, and SEBI's rejection of settlement proposals.

2. Allegations Against Petitioners

• [Para 5-6]
  • SEBI issued a show-cause notice alleging market manipulation, misleading trading practices, and non-disclosure under the Substantial Acquisition of Shares and Takeovers (SAST) Regulations.
  • Allegations of acting in concert with other entities to manipulate share prices.

3. Petitioners’ Conduct in Proceedings

• [Para 7-12]
  • Petitioners raised objections, sought adjournments, and declined to provide necessary disclosures.
  • Settlement applications filed but not pursued cooperatively.

4. Legal Framework and Challenge

• [Para 13-19]
  • Petitioners argued that SEBI's regulations were ultra vires and allowed excessive delegation to the Internal Committee (IC).
  • They contended that conditions precedent imposed by SEBI were arbitrary and prejudicial.

5. Respondent’s Submissions

• [Para 20-23]
  • SEBI argued that the settlement process aims to protect public interest, not just accommodate violators.
  • Highlighted petitioners' non-cooperation and delay tactics.

6. Court’s Analysis

• [Para 24-68]
  • Excessive Delegation: Rejected; SEBI Act provides sufficient guidance.
  • Manifest Arbitrariness: Found no irrationality in the regulations.
  • Public Interest: Emphasized SEBI’s role as a regulator protecting investor interests and market integrity.
  • Conditions Precedent: Deemed reasonable to test the seriousness of applicants.

7. Precedents Cited

• [Para 29-34]
  • Binny Limited v. SEBI: Settlement applications should not be used to stall adjudication.
  • Shilpa Stockbroker Pvt. Ltd. v. SEBI: SEBI has discretion to accept or reject settlement proposals based on public interest.

8. Conclusion

• [Para 69-74]
  • The petition was dismissed. Court upheld SEBI’s rejection of the settlement applications and affirmed the validity of the impugned regulations.

Ratio Decidendi:

1. Regulatory Discretion: SEBI has broad discretion to impose conditions in settlement proceedings to uphold public interest.
2. No Vested Right: Applicants cannot insist on settlement acceptance on their terms; SEBI must evaluate based on investor protection and market integrity.
3. Judicial Review: Courts should exercise restraint in interfering with SEBI's regulatory decisions unless there is clear evidence of arbitrariness or illegality.

Subjects:

Securities Law, Settlement Regulations, Market Manipulation.

SEBI, Settlement Proceedings, Stock Market Regulation, Investor Protection, Judicial Review.