Abhijit Dutta vs Sebi
- CitationAppeal No.324 of 2017
Ratio decidendi
The rule this decision rests on
The appellate restraint imposed on a past director of a company, whose only connection to the impugned fund-raising was his tenure as director and CEO, cannot be sustained where neither investigating agency (CBI or ED) found that he played any role in the company raising funds in violation of the SEBI Regulations, and the impugned order itself did not find that he had any such role, merely recording his status as a past director; in such circumstances the restraint is modified to run only from the date of the impugned order to the date of the tribunal's decision, with immediate cessation of the restrictions.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Date of Decision: 07/06/2018
Appeal No.324 of 2017
Abhijit Dutta Flat No. B + B1 Pushpahar Appt., 193 Shanti Pally Kasba Kolkata - 700 017. ... Appellant
Versus
Securities and Exchange Board of India Plot No.C4-A, 'G' Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
Mr. P.N. Modi, Senior Advocate a/w Mr. Kunal Katariya, Mr. Manish Chhangani and Ms. Enakshi Jha, Advocates i/b Khaitan & Co. for the Appellant.
Mr. Pradeep Sancheti, Senior Advocate a/w Mr. Mihir Mody and Mr. Nishant Upadhyay, Advocates i/b K. Ashar & Co. for the Respondent.
CORAM : Justice J.P. Devadhar, Presiding Officer Dr. C.K.G. Nair, Member
Per : Justice J.P. Devadhar (Oral)
1.
This appeal is filed to challenge the order passed by the Whole
Time Member ("WTM", for short) of Securities and Exchange Board of
India ("SEBI", for short) on 15/11/2017. By the said order, while
directing Rose Valley and Entertainments Limited ("company" for
convenience) and its present directors to wind up the Holiday
Membership Plan (HMP scheme) and to refund the amounts to the 2
investors within the time stipulated therein, the WTM of SEBI has
restrained the past directors of the company including the appellant
from accessing the securities market for a period of four years and
further disqualified them from holding or assuming position as
directors or key managerial personnel of any listed company for a
period of four years from the date of that order.
2. Admittedly, appellant was a director and Chief Executive Officer
(CEO) of the company during the period from 1/8/2011 to 31/1/2012.
3. Fact that the appellant has been the Managing Director and CEO
of Nicco Parks and Resorts Limited a listed company, for the last 28
years barring a brief period of six months from 1/8/2011 till 21/1/2012
during which period the appellant was the director and CEO of the
company is not in dispute. It is a matter of record that the Central
Bureau of Investigation (CBI) and also the Enforcement Directorate
(ED) have investigated the issue relating to the funds raised by the
company and its directors. Neither in the report of CBI nor in the
report of ED the appellant is found to have played a role in the
company raising funds in violation of the regulations framed by SEBI.
Even in the impugned order except recording that the appellant was a
past director of the company, SEBI has not found the appellant had a
role in the company raising funds in violation of SEBI Regulations.
4. In these circumstances, without going into the merits of the case
in detail, we deem it just and proper to modify the impugned order 3
passed by the WTM of SEBI dated 15/11/2017 qua the appellant, by
restricting the restraint order from 15/11/2017 till date only. In other
words, restrictions imposed on the appellant in the impugned order
dated 15/11/2017 shall come to an end with immediate effect.
5. Appeal is disposed of in the aforesaid terms with no order as to
costs.
Sd/-
Justice J.P. Devadhar Presiding Officer
Sd/-
Dr. C.K.G. Nair Member
07/06/2018 prepared & compared by-dg
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free