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Financial Technologies India Limited (FTIL) had filed an appeal with APTEL, challenging the CERC order dated 13th May 2014 in a Suo Motu Petition No. SM/341/2013 whereby CERC in the matter of Regulatory Oversight of the Management and Governance of Indian Energy Exchange Limited (IEX), disposed of the aforesaid Suo Motu Petition in exercise of its powers under Regulation 22(A) and Regulation 63(i) of the Central Electricity Regulatory Commission (Power Market), Regulations 2010 directing the following for compliance by the Indian Energy Exchange (IEX):
• IEX shall ensure that FTIL divests its entire shareholding from the IEX by 30.9.2014
• Pending divestment of shares, the voting rights of FTIL shall stand extinguished and any corporate benefit in lieu of such shareholding shall be kept in abeyance or withheld by the exchange
• IEX shall ensure that no nominee of FTIL is represented in the Board of IEX
• IEX is directed to ensure compliance of the above directions with immediate effect and submit monthly report to the Commission.
The Financial Technologies (India) Limited is the appellant in this Appeal and is also one of the promoter shareholders of the IEX and has two Directors on the Board of the IEX.
The APTEL while pronouncing the judgment on 4th Feb 2015 ruled that CERC is legally justified in passing the impugned order dated 13.05.2014 which directed the IEX to ensure that FTIL should divest its entire shareholding from the IEX and pending divestment of shares, the voting rights of the appellant shall stand extinguished and any corporate benefit in lieu of such shareholding shall also be kept in abeyance or withheld by the IEX.
The impugned order further directed the IEX to ensure that no nominee of the appellant is represented in the Board of the IEX and IEX was also directed to ensure compliance of the directions given in the impugned order with immediate effect and submit monthly report to the Central Commission. The APTEL said that the CERC was justly and legally justified in initiating the suo motu proceedings through the instant Suo Motu Petition No. SM/341/2013 and legally relied upon the orders of FMC and SEBI dated 17.12.2013 and 19.03.2013 respectively.
It also said that CERC has passed many orders making certain enquiries from the respondent /IEX about the appellant and the exchange of correspondences between CERC and the respondent/IEX clearly fortifies the fact that the FTIL was fully aware of the suo motu proceedings before CERC but he did not, knowingly, appear before CERC requiring any personal hearing. In the aforesaid situation, it was not mandatory upon the CERC to make independent and separate enquiry against FTIL before passing the impugned order, particularly when the Hon’ble High Court of Bombay by making detailed observations refused to stay the operation of the FMC’s order dated 17.12.2013. Pendency of the Writ Petition in any Hon’ ble High Court or any higher forum was not a ground for the Central Commission to keep the matter pending till the disposal of the above said Writ Petitions.
APTEL said that the FTIL has miserably failed to show the prejudice caused to him by his deliberate non-participation before CERC in the suo motu proceedings and the impugned order has correctly and legally been passed. Consequently, the instant Appeal, being devoid of merits was dismissed by APTEL and the impugned order dated 13.05.2014 passed by CERC was upheld.
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