Both the petitions will be taken up along with SEBI's petition challenging the appellate authority's verdict which had exonerated HLL and its five top officials from charges of insider trading.

The appellate authority verdict was pronounced on July 14. Recently, HLL went in appeal against the appellate authority verdict, challenging those parts of the order which had gone against the company's contentions.

At the hearing on Wednesday, SEBI senior counsel Rafiq Dada contended that the petition is not maintainable as this is a case of a favourable order being challenged. This would amount to writs being filed on any small point in an order which would go against a party even though the final order would be in its favour, it contended.

The division bench comprising acting chief justice A Agarwal and justice SS Parkar admittedthe petition but took note of the SEBI counsel's argument by observing that admission of the petition should not be perceived as a prima facie view of the court on the maintainability of the petition. This implies that the court has kept open the issue of whether HLL's petition is maintainable or not.

The bench also admitted UTI's plea challenging the appellate authority verdict which had rejected its claim of compensation from HLL. Both these petitions would come up along with the SEBI plea against the appellate authority order.

SEBI had charged HLL with insider trading on the grounds that it bought eight lakh shares of Brooke Bond Lipton India Ltd (BBLIL) just before the merger of Brooke Bond with HLL, a price-sensitive information which SEBI feels HLL was privy to and should have disclosed to UTI. It had ordered prosecution against the company's top officials including chairman KB Dadiseth and former chairman SM Datta and also asked HLL to compensate UTI to the extent of Rs 3.04 crore, the notionalloss suffered by the Trust in the deal.

This order was challenged by HLL before the appellate authority in the finance ministry. The appellate authority dismissed the SEBI order after holding that HLL was indeed an insider and that the information about the merger was of a price sensitive nature and should have been disclosed.

The appellate authority had in fact questioned the powers of SEBI to issue an order of this nature. SEBI appealed against this order before the Mumbai high court which stayed those parts of the appellate authority order which had questioned SEBI's powers.

It has now been joined by HLL and UTI which have questioned the appellate authority's verdict. The government of India is yet to take a stand on the issue. It is learnt that it would be making a submission before the court at the final stage of hearing.