1. By these two applications the Applicants are seeking permission to intevene in the present appeal and also to be heard before any order is made.
2. The Applicant in Application No.63/2002 ( IGF) has described itself as a "public charitable trust, and also registered with the Respondent SEBI (SEBI) as a duly recognised Investors Association" with 800 members. It is stated to be "espousing the cause of small investors all over India" The object of filing the present Application by IGF has been stated in its Application as follows: "By this Application, the intervener is seeking leave of this Hon'ble Tribunal to intervene in the present appeal and support investigations by the Respondent in as much as from what is stated herein it will be apparent that the Appellants appear to have played a big fraud on small shareholders of Larsen and Toubro Ltd.," According to the Applicant " If the present Intervention Application is granted, no prejudice would be caused to the Appellants. On the other hand, if the present Application is not granted, substantial prejudice will be caused to the investors who have virtually no protection owing to the huge disparity between what is payable by the Appellants and what the Appellants are deeming it fit to pay".
3. The Applicant in Application No.64/2002 ( GIWA) has described itself "as a registered association with SEBI & recognised by Government of India, whose objectives inter alia include protection of investors...." The object of filing the present Application by GIWA has been stated in its Application as follows: "There are several other issues which are required to be brought to the notice of this Hon'ble Tribunal from the point of view of the investors and in view thereof the interveners respectfully pray that this Hon'ble Tribunal may be pleased to grant leave to intervene to the Interveners and the Interveners be heard before any further orders be passed by this Hon'ble Tribunal in the present appeal." It has been further stated therein that "if the present Intervention Application is granted, no prejudice would be caused to the Appellants, whereas, "if the present Intervention Application is not granted, substantial aprejudice will be caused to the investors who are represented by the investors. Therefore also it is in the interest of justice that the Intervener's present application be granted as prayed for." 4. The factual background of filing the present Applications briefly is as follows: The context is acquisition of shares of Larsen & Toubro Ltd., (the target company) by the Appellants. The target company is a public limited company. It has considerable interest in the area of engineering, construction, cement etc. Its shares are listed on the major stock exchanges in India. Grasim Industries Ltd., is a public limited company. Its key business activity is manufacturing and dealing in viscose staple fibre, cement etc. Its shares are also listed on the major stock exchanges in India. Samruddhi Swastik Trading and Investments Ltd. is a wholly owned subsidiary of Grasim Industries Ltd. It is engaged in investment activities. Grasim Industries Ltd. and Samruddhi Swastik Trading and Investments Ltd., (Appellants) are stated to be part of the Aditya Brila Group.
5. JM Morgan Stanley Private Ltd.,(the merchant banker) on behalf of the Appellants issued a public announcement in terms of regulation 10 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (the 1997 Regulations). The public announcement was addressed to the shareholders of the target company offering to purchase 497,32,070 fully paid up equity shares, representing upto 20% of the paid up capital of the target company. The offer price was quoted at Rs.190/- per share. The public announcement was made on 14.10.2002. The background of the offer has been explained in the draft offer letter. The first Appellant sometime in November 2001 had acquired 2,50,00,000 equity shares, aggregating 10.05% of the voting share capital of the target company at a price of Rs.306.60 per share. Thereafter the Appellants further acquired 1,11,21,540 equity shares aggregating 4.48% of the voting capital of the target company, through open market purchases at an average price of Rs.176.75 per share. It has been stated in the draft letter of offer that the Board of Directors of the first Appellant decided to augment its shareholding in the target company beyond 15% and the public offer was made in the said context.
6. The 1997 Regulations prescribes time bound action by the acquirers on making public announcement. One of such time bound requirements is submission of draft letter of offer to Respondent SEBI, as provided in regulation 18(1).
7. According to regulation 18(1) within fourteen days from the date of public announcement made under regulation 10, regulation 11 or regulation 12 as the case may be, the acquirer shall, through its merchant banker, file with the Board, the draft of the letter of offer, containing disclosures as specified by the Board 8. According to regulation 18(2) the letter of offer shall be despatched to the shareholders not earlier than 21 days from its submission to the Board under sub-regulation (1).
9. Provided that if, within 21 days from the date of submission of the letter of offer, the Board specifies changes, if any, in the letter of offer (without being under any obligation to do so) the merchant banker and the acquirer shall carry out such changes before the letter of offer is despatched to the shareholders.
10. Provided further that if the disclosures in the draft letter of offer are inadequate or the Board has received any complaint or has initiated any enquiry or investigation in respect of the public offer, the Board may call for revised letter of offer with or without rescheduling the date of opening or closing of the offer and may offer its comments to the revised letter of offer within seven working days of filing such revised letter of offer.
11. According to regulation 18(3) the acquirer shall, along with the draft letter of offer referred to in sub regulation (1) pay a fee of Rs.50,000 to the Board, either by a bankers cheque or a demand draft in favour of the Securities and Exchange Board of India, payable at Mumbai.
12. It is in terms of the requirement of regulation 18(1) the merchant banker submitted the draft letter of offer to Respondent SEBI. In that context Respondent SEBI, on 8.11.2002 wrote to the merchant banker stating that it had decided to conduct an investigation in terms of Chapter V of the Regulations on the alleged violations, if any, with regard to acquisition of 10.5% of the paid up capital of the target company by the Appellants and advised them - (a) not to proceed further with the open offer formalities pursuant to the public announcement made on 14.10.2002 and (b) to issue a revised public announcement in all the newspapers in which the original public announcement appeared stating inter alia the contents of Respondent SEBI's letter under reference.
13. The Appellants claiming to be aggrieved by the said direction filed the appeal in the Tribunal on 18.11.2002 inter alia seeking an interim order staying the operation of the impugned order pending the hearing and final disposal of the appeal. The Tribunal after hearing the concerned parties, felt that it was not a fit case warranting issuance of an interim order as prayed for, and declined to pass the interim order. The Applicants at the time of hearing of the prayer for interim order had preseented through Counsel and mentioned that they be allowed to intervene and be heard. Taking into consideration all the relevant attendant factors the Tribunal decided not to hear their application at that juncture, but allowed them to file formal applications to consider their request to be impleaded as interventors. Accordingly they have filed the applications.
14. Shri Somasekhar Sundaresan, learned Counsel appearing for IGF briefly referred to the facts of the case and submitted that the price of Rs.190/- per share offered by the Appellants to the public shareholders is very low, that the share deserved a much higher price as the Appellants had acquired shares at the rate of Rs.306.60 per share while acquiring 10.05% of the shares of the target company. Shri Somasekhar Sundaresan submitted that IGF has been complaining to Respondent SEBI about the acquisition of the target company's shares by the Appellants in the past without making the public offer and that it is based on IGF's complaint that the Respondent SEBI has ordered investigation into the matter and, therefore, IGF is entitled to get impleaded in the present proceedings. In this cntext he referred to the written reply of the Appellants to the intervention Application and submitted that the Appellant's objection is on the ground that the provisions of the Securities and Exchange Board of India Act, 1992(the Act) and the Securities Appellate Tribunal (Procedure) Rules, 2000 do not contemplate nor do they permit hearing of any party other than the Appellants and the Respondent, and further the intervention in the present appeal proceeding is not only unnecessary but also likely to delay the appeal proceedings that it is opposed to the interest of investors as also the securities market. Learned Counsel submitted that the cited ground based on which the Appellants are opposing the application is untenable. He submitted that the Securities Appellate Tribunal is fully empowered to decide as to who should be given an opportunity of being heard in the appeal proceedings, so as to enable it to reach at right decisions, that the said power is inherent and need not flow from any specific statute.
15. Learned Counsel submitted that the 1997 Regulations recognises the right of persons concerned to be heard before taking certain decisions affecting the interest of the investors. In this context he referred to sub regulation (6) of regulation 4 relating to grant of exemption based on the recommendation of the Takeover Panel. He said that the said regulation requires SEBI to afford 'reasonable opportunity to the concerned parties" and decide the application seeking grant of exemption, that the concerned party referred to in the said regulation is the shareholder and in that view of the matter an association representing the shareholders can not be said to have no locus standi to pursue a matter involving the interests of investors in securities.
Shri Somasekhar Sundaresan submitted that the IGF as an investors Association, is entitled even to file an appeal against an order passed by Respondent SEBI if as a result of the said order investors interests are adversely affected. He submitted that it may be true that the Tribunal is not bound to follow the provisions of the Code of Civil Procedure but certainly it has to follow the principles underlying the provisions therein, and the Tribunal has been following those principles in the appeal proceedings before it. Shri Somasekhar Sundaresan referred to section 15U of the Act and submitted that as per the said section the Securities Appellate Tribunal though not bound by the procedure laid down by the Code of Civil Procedure 1908, shall be guided by the principles of natural justice and has powers to regulate its own procedure, that the principles of natural justice requires that person who is likely to be adversely affected by an order be heard. He submitted that as section 15T and section 20A exclude the jurisdiction of Civil Courts to address the grievances of investors in securities against the orders passed by Respondent SEBI, the only forum available to the aggrieved investors and the representative investor associations to seek reddressal of grievances arising out of the orders passed by Respondent SEBI is the Securities Appellate Tribunal. He further submitted that under regulation 15Z as recently amended, an appeal on facts does nolonger lie and as such it is clear that the Securities Appellate Tribunal is the final fact finding body, and therefore, if anybody wants to bring in facts in an appeal proceedings that is possible only at the appellate stage before the Tribunal and that since IGF wants to bring in relevant facts and assist the Tribunal, it would be possible only in the appeal proceedings and as such it may be permitted to intervene and be afforded an opportunity of being heard.
16. Shri Somasekhar Sunderesan submitted that Respondent SEBI has initiated investigation into the acquisition of shares by the Appellants as requested by the Applicant and in that context IGF is a beneficiary of Respondent SEBI's decision to investigate and that since the said order is under challenge in the present appeal, the Applicant should be provided an opportunity to defend the said beneficial order.
He submitted that IGF has been continuously pursuing the impugned acquisition related matters for quite some time and that it has a lot to contribute to the fair and speedy disposal of the appeal. Shri Somasekhar Sundaresan further submitted that IGF is closely involved in investor protection and it had intervened in several matters before High Courts in matters having a bearing on investor protection and High Courts have recognised the eligibility of IGF to intervene and therefore, there is no reason as to why it is ineligible to intervene in the present appeal. He submitted that in fact IGF is not only interested in protecting the interests of the shareholders of the target company but is also interested in protecting the interests of the shareholders of the 1st Appellant. Shri Somasekhar Sundaresan referred to Order 1 Rule 8A and Rule 10A of the Civil Procedure Code.
In support of his contention that IGF is entitled to be an intervener in the present appeal he referred to the Hon'ble Supreme Court's observation in Savitri Devi V District Judge (AIR 1999 SC 976) that "The Court is empowered to join a peprson whose presence is necessary for the prescribed purpose and can not under the rule direct the addition of a person whose presence is not necessary for that purpose.
If the intervener has a cause of action against the plaintiff relating to the subject matter of the existing action the court has power to join the intervener so as to give effect to the primary object of the order which is to avoid munltiplicity of actions." Learned Counsel submitted that since the Applicant being the complainant it is entitled to file an appeal under section 15T, against the order and, therefore following the logic in the Savitri Devi's case, it should be entitled to join as an intevener in the present appeal and allowing it to do so could avoid multiplicity of actions as observed by the Hon'ble Supreme Court.
17. Shri Somasekhar Sundaresan referred to the observation by the Hon'ble Supreme Court in The Collector (District Magistrate) V Raja Ram Jaiswal (AIR 1985 SC 1622) and submitted that even though in the said case the interveners, according to the rules were not entitled to address oral submissions to the court, in the background and the facts of the case the Hon'ble Court gave full opportunity to the Counsel to address oral submissions.
18. Learned Counsel submitted that in Union of India V Special Tehsildar (ZA) AIR 1996 SC 853 Hon'ble Supreme Court had held that in the context of non impleadment of proper parties in appeal, the proper remedy was to apply to appellate court for impleadment. He stated that it is what exactly the Applicant has done in the instant case.
19. Learned Counsel also referred to Janta Dal V H. S. Chaudhary (AIR 1993 SC 892) and submitted that IGF has the locus standi to move the Appellate Tribunal in a representative capacity as is evident from the following observation by the Hon'ble Court: "The dispute is not comparable to one between private parties with the result there is no recognition of the status of dominus litis for any individual or group of individuals to determine the course or destination of the proceedings, except to the extent recognised and permitted by the Court. The rights of those who bring the action on behalf of the others must necessarily be subordinate to the interest of those for whose benefit the action is brought. The grievance in a public interest action, generally speaking, is about the content and the conduct of government action in relation to the Constitutional or statutory rights of segments of society and in certain circumstances the conduct of government policies.
Necessarily, both the party structure and the matters in controversey are sprawling and amorphous, to be defined and adjusted and readjusted as the case may, ad hoc, according as the exigencies of the emerging situations. The proceedings do not partake of pre determined private law litigation models but are exogenously determined by variation of the theme." "Though we have, in our country, recognised a departure from the strict rule of locus standi, as applicable to a person in private action and broadened and liberalised the rule of standing and thereby permitted a member of the public, having no personal gain or oblique motive to approach the court for enforcement of the Constitutional or legal rights of socially or economically disadvantaged persons who on account of their poverty or total ignorance of their fundamental rights are unable to enter the portals of the court for judicial redress, yet no precise and inflexible working definition has been evolved in respect of locus standi of an individual seeking judicial remedy and various activities in the field of PIL".
20. Shri Somasekhar Sundaresan submitted that in the light of the cited observation of the Hon'ble Supreme Court there can not be any dispute about the locus standi of IGF to file an appeal in the interest of the aggrieved investor as it is a representative body of investors in securities. In this context he reiterated the appeal provision in section 15T giving right to any aggrieved person to file an appeal.
21. Shri Somasekhar Sundaresan admitting that Respondent SEBI has taken cognizance of its complaints and ordered an investigation into the matter relating to the acquisition of shares of the target company by the Appellants submitted that the IGF is worried about Respondent SEBI's inaction in pursuing the investigation, that the apprehension is that Respondent SEBI will not deal with the case properly. Countering the Appellant's contention that in the appeal proceedings if each and every person is allowed to be interevened, that will open the floodgates of intervention making appeal management difficult, the learned Counsel submitted that it can not be a ground for denying justice to the aggrieved persons, that the gatekeeper can not hold the flood, that in any case there are very few investor associations recognised by SEBI. He submitted that in an extraodinary situation, extraordinary action is required.
22. Learned Counsel submitted that IGF is entitled to join as an intervener and IGF's participation would help to put forth the factual and legal issues involved to enable the Tribunal to decide the issues raised in the appeal in a proper manner.
23. Shri J. J. Bhatt appearing for GIWA elaborated the activities of GIWA and submitted that it had taken up the cause of investors in its complaints filed before Respondent SEBI pointing out the unfair manner in which the investors have been treated by the Appellants by not providing the right price which the share holders of the target company are entitled to get, as per the Regulations. Shri Bhatt's argument was mainly on the need to recognise the investor protection associations and permitting such associations to take up the cause of investors in litigations etc. He also submitted that the Tribunal should encourage "class action" to provide relief to the investors and that the investor associations need be given due recognition to pursue such 'class actions'. He submitted that the Securities Appellate Tribunal is also a creature of the Act and as such the Tribunal is also mandated to protect the interests of the investors in securities and in pursuing that objective, it has to encourage investor associations actively associated with investor protection activities, that GIWA is an investor association engaged in pursuing matters of investor protection. He submitted that GIWA be permitted to join as an intervener in the appeal to protect the interest of the concerned investors.
24. Shri Goolam Vahanvati, learned Advocate General appearing for the Appellants submitted that whether the Applicants should be allowed to join as interveners or not depends as to whether their presence is necessary for an effectual adjudication of the question involved in the present appeal, that a person whose presence is not required for the said purpose should not be joined as a party.
25. Learned Advocate General referred to the Applicants' admission that they had filed complaints with Respondent SEBI and investigation has been ordered by Respondent SEBI based on those complaints. He submitted that IGF had written to Respondent SEBI in November/December 2001 alleging that acquisition of 10.05% shares of the target company by the Appellants was in violation of the provisions of the Regulations and Respondent SEBI after considering the matter had come to the conclusion that the said acquisition did not attract the 1997 Regulations as alleged, and this finding was communicated to IGF in December 2001, but the Applicants did not challenge the said decision by filing any appeal. He referred to IGF's letter dated 24.10.2002 alleging that the price of Rs.190/- per share offered by the Appellants in the public offer was not the proper price and its request to Respondent SEBI to ensure that the present offer of Rs.190/- per share is stalled Respondent SEBI responded positively to the said complaint as could be seen from its letter dated 8.11.2002 addressed to the merchant banker informing that it has decided to investigate the alleged violations relating to acquisition of 10.05% shares of the target company by the Appellants and in that context the merchant banker was directed "not to proceed further with the open offer formalities pursuant to the public announcement made on 14.10.2002." Learned Advocate General submitted that Respondent SEBI had acted in response to the Applicants' complaint. He submitted that in that context by any standard the Applicant can not be considered as an aggrieved person in terms of section 15T. In this context he also referred to the interim order passed by the Tribunal declining to stay the operation of Respondent SEBI's said order and thereby allowing the investigation to go on.
Learned Advocate General submitted that the main question that is left to be decided in the pending appeal is that whether the ongoing investigation is in accordance with the requirements of the Regulations.
26. Learned Advocate General submitted that it is nobody's case that the Respondent SEBI is not going to defend its order before the Tribunal He submitted that in a situation where Respondent SEBI is defending its order, no intervener is required to be joined to defend the order. Referring to the Applicants' submission that it has material to place before the Tribunal in the proceedings, learned Advocate General submitted that for the purpose of giving evidence in a proceeding one can not be joined as an intervener. In this context he referred to the observation by the Hon'ble Supreme Court in Ramaesh Hirachand Kundanmal V Municipal Corporation of Greater Bombay ((1992) 2 SCC 524) that a witness is not to be joined as an intervener. He submitted that the Applicants have no role to play in the present proceedings, that it is not the bonafides of the Applicants that decides their request for joining as interveners, it is the need of their presence that matters, that in the facts and circumstances of the present appeal, their presence is not at all required. Learned Advocate General submitted that the Applicants had complained to Respondent SEBI and the said Respondent SEBI has taken up an investigation based on the complaints, and the investigation is going on and nothing prevents the Applicants from putting forth the material stated to be in their possession and submitting their views before Respondent SEBI at this stage and in any case their presence before the Tribunal is not required at this stage of the proceedings.
27. Learned Advocate General submitted that the legal position as to who should be joined as an intervener in a proceeding before a court has been clearly settled in Kundamal's case (supra) that only a necessary or proper party may be added, that the Applicants are not necessary or proper parties whose presence is necessary to decide the question involved in the present appeal, and that the case laws relied on by the Applicant have no application to the facts of the case. In this context learned Advocate General also referred to the Hon'ble Bombay High Court's decision in Jivanlal Damodardas Wani V Narayan Ukhasali (AIR 1972 Bombay 148) that the parties are not to add to the proceedings routinely. He submitted that in Savitri Devi's case relied on by the Applicants the court had followed the principle laid down in Kundanmal's case, that the ratio in Janta Dal's case (supra) relied on by the Applicants has no relevance to the present case, that it was on the locus standi of persons in a Public Interest Litigation. He submitted that none of the authorities cited by IGF's Counsel is of any help to its cause.
28. Learned Advocate General submitted that if Respondent SEBI is investigating the Applicant's complaints and if the Applicants want to provide assistance, they should go to Respondent SEBI and not to the Tribunal as the Tribunal is not investigating the complaints. If IGF or GIWA has anything to contribute to the ongoing investigation it is for the Respondent SEBI to decide as to whether such assistance is really required or not, that an intention to assist Respondent SEBI in the investigation does by itself not make that IGF/GIWA is entitled to be joined as an intervener in the present appeal proceedings. He submitted that Respondent SEBI is mandated to protect the interests of the investors in securities, and if the said Respondent does not do so, the affected person can be said to be aggrieved, that in the instant case it is not so as the Applicants themselves had stated that the Respondent SEBI had acted on the complaint filed by them and that investigation is going on. At this stage of the proceedings the Applicants can not come to the Tribunal seeking impleadment on the ground that it is required to supplement SEBI's defence. In this context learned Advocate General referred to the reliance placed by Shri Somasekhar Sundaresan on Collector (Dist. Magistrate) V Rajaram (supra) and submitted that the observation in that case relied on, was in the context of malafides alleged against a person in a proceedings who was not impleaded as a party that the present case is not one where any allegation of malafide has been made against the Applicants. With reference to the Janta Dal case relied on by the Applicants the learned Counsel, the learned Advocate General submitted that it was a Public Interest Litigation of much wider scope and not an appeal as provided in section 15T. He submitted that an appeal under section 15T is of adversarial nature and the scope of the appeal as provided in the said section can not be enlarged to allow everyone to come in, that the Tribunal should not open the floodgates by enlarging the scope of section 15T and thereby make the appeal management itself unmanageable and cause delay in the disposal of appeals. He submitted that exclusion of jurisdiction of civil courts is not going to affect the interest of investors, as the Act itself provided a grievances redressal set up, butif there is no cause for any grievance no forum whether Courts or Tribunals can help, and the Applicants, as of now have no cause to be aggrieved as their request for investigation has been accepted and acted upon by the Respondent SEBI, that the Applicants wanted to activate SEBI and it has been done and there ends their role.
29. With reference to section 15U, referred to by the Applicants, learned Advocate General submitted that the requirement therein to follow the principles of natural justice, is with reference to parties in an appeal and not with reference to the public at large, that the natural justice means fair play in action, that the fair play is to the parties in the appeal.
30. Learned Advocate General submitted that the true test in the present case is as to whether this Tribunal would be in a position to determine the issues raised in the appeal in the absence of the Applicants, that the answer to that clearly is in the affirmative and therefore the Applicants' prayer in this regard deserves to be rejected.
31. In my view the limited question to be decided in these two Applications under consideration is that as to whether the Applicants ought to be joined as interveners and their presence before the Tribunal is necessary in order to enable the Tribunal to effectually and completely adjudicate upon and settle all the questions involved in the appeal.
32. I do not find any merit in the Appelleants' submission that in the absence of specific power provided in the Act or in the SAT (Procedure ) Rules, this Tribunal can not join a party in the appeal proceedings.
In my view rule 21 gives sufficient authority to the Tribunal to decide as to whether a particular person aggrieved by an order of Respondent SEBI be allowed to present its case in an appeal, as the rule empowers the Tribunal to make such orders or give such directions as may be necessary or expedient to prevent abuse of its process or to secure the ends of justice. Therefore, if the Tribunal is of the view that a particular person need be joined in an appeal proceedings before it "to secure the ends of justice" it is empowered to order to join that particular person as party to the proceedings and hear that person.
Therefore, want of power is not a constraint in this regard. But the question is the need for allowing a person to butt in the proceedings.
In this context the principles laid down by Hon'ble Supreme Court in Kundanmal's case provides the guidance. In the said case the Hon'ble Supreme Court in a special leave petition was considering the question as to whether the Respondent 'X' is a necessary or proper party to be joined as defendant under Order 1 Rule 10 of the Code of Civil Procedure in the suit instituted by the Appellant Y against Respondent Z in the following set of facts. Under the Dealership Agreement of 1974 Y was in possession of the Service Station erected on the land held by Respondent X,(Hindustan Petroleum Corporation Limited) on lease. The Service Station consisted of a petrol pump on the ground floor and a structure with an open terrace for the parking of vehicles. Respondent Z, (Municipal Corporation of Greater Bombay) issued a notice under section 351 of the Municipal Corporation Act to the Appellant Y for demolition of two chattels on the terrace on the ground that those were unauthorised construction. The said Appellant Y instituted a suit before the City Civil Court, Bombay, challenging the validity of the notice and for injunction restraining the Municipal Corporation from demolishing the structures. Interim injunction was granted by the Court. Hindustan Petroleum Corporation applied for being impleaded as additional defendant in the suit on the ground that they have material to show that the constructions are unauthorised and they are necessary parties to the litigation. The Court rejected the contentions of the Appellant Y that Hindustan Petroleum was neither a necessary or a proper party to be impleaded in the suit and directed the Appellant Y to add Hindustan Petroleum as defendant and amend the plaint suitably.
The Appellant Y filed a writ petition under Article 227 of the Constitution of India in the Hon'ble High Court of Bombay challenging the correctness of the order. The Hon'ble High Court dismissed the writ petition. In that context Special Leave Petition was filed in the Hon'ble Supreme Court. In the said SLP three grounds were urged against the sustainability of the order that - (1) the plaintiff was dominus litis and therefore can not be forced to join Hindustan Petroleum Corporation as a defendant; that Hindustan Petroleum Corporation is neither a necessary nor a proper party to the suit, that addition of HPC would enlarge the issue in the suit. The observation of the Hon'ble Court is in the said background. The Hon'ble Court held: "It was argued that the Court cannot direct addition of parties against the wishes of the plaintiff who cannot be compelled to proceed against a person against whom he does not claim any relief.
Plaintiff is no doubt dominus litis and is not bound to sue every possible adverse claimant in the same suit. He may choose to implead only those persons as defendants against whom he wishes to proceed though under Order 1 Rule 3, to avoid multiplicity of suit and needless expenses all persons against whom the right to relief is alleged to exist may be joined as defendants. However, the Court may at any stage of the suit direct addition of parties. A party can be joined as defendant even though the plaintiff does not think that he has any cause of action against him. Rule 10 specifically provides that it is open to the Court to add at any stage of the suit a necessary party or a person whose presence before the Court may be necessary in order to enable the Court to effectually and completely adjudicate upon and settle all the questions involved in the suit.
Sub-rule (2) of Rule 10 gives a wide discretion to the Court to meet every case of defect of parties and is not affected by the inaction of the plaintiff to bring the necessary parties on record. The question of impleadment of a party has to be decided on the touchstone of Order 1 Rule 10 which provides that only a necessary or a proper party may be added. A necessary party is one without whom no order can be made effectively. A proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceeding. The addition of parties is generally not a question of initial jurisdiction of the Court but of a judicial discretion which has to be exercised in view of all the facts and circumstances of a particular case." 33. The Hon'ble Court has thus held that the question of impleadment of a party has to be decided on the touchstone of order 1 Rule 10 which provides that only a necessary or a proper party may be added. One need not have to do any further research to find out as to who is a necessary or proper party, as the Hon'ble Court itself has explained that a necessary party is one without whom no order can be made effectually and a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceeding. It is in this context that one has to see whether the Applicants are necessary or proper parties in the present appeal proceeding.
34. From the factual position presented before this Tribunal it is clear that the Applicants in their complaints to Respondent SEBI, had made certain allegations relating to the public offer made by the Appellants. As the learned Advocate General rightly pointed out we are not in 2001 - i.e. the stage when the Respondent SEBI had refused to intervene on IGF's complaint. The IGF had made complaint again in October 2002 and the Respondent SEBI has taken cognizance of the said complaint and also the complaint filed by GIWA and an investigation has been initiated to find out the truth or otherwise of the allegations and the said investigation is stated to be in progress. The Applicants have not made any allegation against Respondent SEBI in this regard. No omissions and commissions by SEBI bringing grief to the Applicants have been alleged. As of now the Applicants can not be said to be aggrieved on account of any action/inaction by Respondent SEBI vis-is their complaints. Investigation is yet to be completed and the findings are yet to be known. Therefore, it is also not a ground to claim that as a result of the investigation and the findings thereof, the Applicants are aggrieved. In this context it is to be noted that the Act provides opportunity to any person aggrieved by an order of Respondent SEBI to file an appeal before the Tribunal. But the pre requisite for availing the said relief is the existence of an order and the grievance caused by the order. In the instant case there is no adverse order against the Applicants. The existing order against which the present appeal has been filed by the Appellants is in fact an order "favouring" the Applicants and in that context the Applicants' argument that since they are entitled to file an appeal they are entitled to be joined as a party in the pending appeal to avoid multiplicity of the proceedings, is untenable. The Applicants' argument that if the Applications are not allowed "substantial prejudice will be caused to the investors" remains unsubstantiated. The investigation by itself is not the 'end of the chapter'. If an investor feels aggrieved by the decision taken by Respondent SEBI after the investigation, and it is established that he is an aggrieved person by the said order, appeal remedy provided under section 15T should be available to him. Just for asking, a person cannot be joined as an intervener. There should be justification. A person seeking intervention in an appeal proceeding has to convince the Tribunal that he is a proper/necessary party and that his presence is necessary to effectuallly decide the issues raised in the appeal, and the Tribunal, on satisfying that joining the party is necessary to effectually and finally decide the appeal, may order to join the person as a party to the proceedings.
35. I am not for a moment on the credentials of the Applicants or on their objective. No doubt, any person championing the genuine cause of investor protection deserves to be recognised and encouraged. But we are not on that policy approach here. The issue here, as I already stated, is of the locus standi of the Applicants to be a party in the proceedings. In my view, in the facts and circumstances of the case, the Applicants are not aggrieved by Respondent SEBI's order impugned in the appeal. The Applicants' apprehension that Respondent SEBI will not deal with the case properly is not a valid ground to get them impleaded in the proceedings. In my view for the reasons stated above, the Applicants are neither proper or necessary party whose presence/assistance is necessary for a complete and final decision on the questions involved in the appeal.
36. IGF in its Application has stated that it is seeking leave of this Tribunal to intervene in the present appeal and support investigation.
I do not think that the Applicant for want of impleadment is in any way handicapped in supporting the investigations. It is a matter for Respondent SEBI to decide as to what sort of support it requiresfrom the Applicants. In any case in my view SEBI does not require to be provided with crutches by the Applicants to stand and defend its order before the Tribunal in the pending appeal. If the Applicants want to provide any assistance in the matter to the Respondent SEBI, they are at liberty to extend such assistance to Respondent SEBI and it is for Respondent SEBI to accept or not to accept such assistance. In any case, this Tribunal, for the time being does not consider it necessary to have the presence of the Applicants to provide assistance to it to decide the present appeal.
37. I have noted Shri Somasekhar Sundaresan's submission that the Applicants have material relevant to the appeal and that the participation by them in the appeal would benefit the Tribunal to reach at the proper conclusion. I would like to state that the role of an Intervener is not that of a witnesses as has been observed by the Hon'ble Supreme Court in Kundanmal that "what makes a person a necessary party is not merely that he has relevant evidence to give on some of the questions involved; that would only make him a necessary witness." 38. I do not consider it necessary to deal with Shri Bhatt's submissions on the policy approach as the same being extraneous to the issues required to be decided in the Application. In the Application filed by GIWA, it has been stated that there are several other issues which are to be brought to the notice of the Tribunal from the investors point of view. But Shri Bhatt has not thrown any light on those issues and the relevance of the same in the present appeal.
39. For the reasons stated above, I am not inclined to allow the Applications. Applications dismissed.