"We may not join issue with SEBI on the merits of the appellate authority's directions on the HLL case," a finance ministry official said. The reasons for not directly taking on SEBI on the HLL issue is because the government had always "respected the right of an appellant to go to a higher authority in case he is not satisfied with the AA's decision." He went on to add, "In the past as well, several revisions were filed in high courts on the AA's judgements and we have never deemed it proper to contest them."

But this does not mean that the government will remain silent on the larger issues raised by SEBI before the Mumbai high court. The government will file a reply to the SEBI plaint on the question of interpretations of the SEBI Act. But the ministry is unlikely go in for a point-by-point rebuttal to theinterpretations given by SEBI to Sections 11 and 11 B of the Act while determining the HLL insider trading case.

Clearly, there seems to be a change of mind in the ministry over how to tackle the SEBI move over the HLL issue. While earlier, the mood in North Block was to take on the SEBI challenge headlong, the attitude was mellower last week.

"We cannot behave like an ordinary litigant," a ministry official said.

The ministry is taking the ruse of not creating a precedent by specifically challenging The Securities & Exchange Board of India's observations before the court, pertaining strictly to the issue of whether the regulatory body's judgement and the AA's subsequent decision on the HLL insider trading case was right or wrong.

The ministry now plans to counter the larger question of interpretation of the SEBI Act by placing before the court all parliamentary deliberations (concerning the objectives and goals) which took place before the two houses voted to set up the regulatory body. The ministryis unlikely to do much legal hair splitting beyond submitting parliamentary records.

"We will not go into the finer details of the case but leave it to the Court to take a decision on the wider issue of interpretations," the official said.

The dithering on the part of the finance ministry is reflected in the fact that additional solicitor general D Y Chandrachud -- who is the assigned as government counsel for the case -- has not been provided a formal brief on the ministry's stand.

Chandrachud may have to wait a couple of more weeks before he knows what stand to take before the court. Reason: the entire North Block brass is abroad, attending formal International Monetary Fund-World Bank sessions in Washington. A formal decision will have to await their arrival back in Delhi.