'What Does He Know?' : Delhi High Court Slams 19-Year Old Petitioner Who Alleged SEBI Irregularities In IPO Approvals

The Delhi High Court today slammed a petitioner for alleging that the Securities and Exchange Board of India (SEBI) is approving IPOs (initial public offerings) in a hasty manner, without proper scrutiny.

Noting that the Petitioner, who sought the constitution of a fresh body for IPO approvals, was aged merely 19 years and there was little to no likelihood of his understanding the complexities of a securities market, the Division Bench of Chief Justice DN Patel and Justice Jyoti Singh remarked,

"We want to cross examine this boy. If we ask you one question Mr. counsel, you'll not be able to answer. How will this 19 years old boy know anything?"

The petition was filed by one Ketan Kumar through Advocate Siddharth Acharya, days after Paytm IPO debacle.

At the outset, the Bench noted that the petitioner had approached the Court without making any representation before the concerned authority. It was of a prima facie opinion that the proceedings, initiated under guise of public interest, are instituted at the behest of some company.

It went on to observe that the petition has been filed with vested interest, whereas the counsel himself may not be aware of the complexities involved therein.

"We'll put one query to you and you'll say "mujhe kuch nahi pata" (I don't know anything)," the Bench told petitioner's counsel.

It then queried the counsel on some basic concepts of securities market, such as how IPOs are declared; how share holding is determined, etc.

"Kitne type k share hote hai batao? (What are the types of shares?) This is very simple. That's why we don't ask questions, to maintain the dignity of lawyers," it continued.

The Bench therefore advised the counsel to refrain from getting involved in such company matters, "blackmailing type of petitions", where costs can go up to Rs. 5 lakh.

At this juncture, Additional Solicitor General Chetan Sharma informed the Bench that a similar petition was filed earlier also, where the Delhi High Court had opined that only a brief description about the company is required so that an investor is aware of the risks faced by the company.

Having drawn flak from the Court, the petition was withdrawn unconditionally.

Case Title: Ketan Kumar v. SEBI & Anr.