Adventz Finance Private Limited & Anr. vs Sebi
- CitationReview Application No. 09 of 2016
Ratio decidendi
The rule this decision rests on
The Tribunal's reasons rest on the following: where a quasi-judicial authority has followed an established internal practice of disposing of representations by approving a subordinate's draft note rather than passing a reasoned order, the practice found erroneous is attributable to the institution's practice and not to the individual officer who followed it, so personal observations made against that officer are to be treated as directed at the practice rather than at him. Where the impugned communication has been quashed and fresh reasoned orders have been passed in implementation of the Tribunal's directions, a request for file notings underlying a set-aside communication is not justified, since those notings relate to a decision that no longer subsists. Where the authority has, by internal instruction, discontinued an erroneous practice and undertakes that quasi-judicial proceedings will in future be decided by formal orders of the competent officer, the issue is closed, and such an order does not operate as a precedent to reopen orders already passed by the authority which have attained finality.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date of Decision: 29.08.2016
Misc. Application No. 175 of 2016 In Review Application No. 09 of 2016 In Appeal No. 206 of 2016
Securities and Exchange Board of India, SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 ...Applicant/ (Org. Respondent No. 1) Versus
Adventz Finance Private Limited 31, B.B.D. Bagh (S), Hong Kong House, Kolkata -700 001 ...Respondent No. 1 (Orig. Appellant)
Jain Annanya Investments Private Limited BIA Merline Chambers, 18, Abdul Hamid Street, 1st Floor, Room No. 101A, Kolkata - 700 069 ...Respondent No. 2 (Orig. Respondent No. 2)
Mr. Darius Khambata, Senior Advocate i/b MDP & Partners for Applicant/ Orig. Respondent No. 1
Ms. Vaneesa Agrawal, Advocate for Respondent No. 1/ Orig. Appellant.
Mr. Jaikishan Lakhwani, Advocate for Respondent No. 2/ Orig. Respondent No. 2
CORAM: Justice J.P. Devadhar, Presiding Officer Jog Singh, Member Dr. C.K.G. Nair, Member
Per: Justice J.P. Devadhar (Oral)
1.
By this Misc. Application the Securities and Exchange Board of
India ("SEBI" for short) seeks recall/ modification of the personal 2
observations made in the order of this Tribunal against the Whole Time
Member ("WTM" for short) of SEBI on July 15, 2016 and July 25, 2016
in Appeal No. 206 of 2016 and Review Application No. 09 of 2016,
respectively.
2. In the affidavit in support of the Misc. Application it is stated that
in the present case, as per the past practice prevalent in SEBI, the WTM
of SEBI instead of passing any specific order, followed the past practice
of rejecting the representation of the appellant by approving the note put
up by the Assistant Manager of SEBI. In the said affidavit it is further
stated that on being pointed out by this Tribunal on July 15, 2016 that the
aforesaid practice followed by SEBI is erroneous, immediate step is
taken by the Competent Authority by issuing internal instructions on
August 18, 2016 to the effect that as a policy, in future, in all quasi-
judicial proceedings, formal orders be passed by the Whole Time
Members or Adjudicating Officers or any other authority as the case may
be and not merely by approval of file note.
3. On the basis of aforesaid facts, counsel for SEBI submits that in
the present case, since the WTM of SEBI has merely followed the
practice prevalent in SEBI in the past, personal observations made
against the WTM be recalled or modified, especially when SEBI by a
policy has discontinued the past practice and in fact, in the present case,
the WTM of SEBI has already passed an order on July 30, 2016 in
accordance with law.
3
4. Counsel for the respondents fairly stated that they do not oppose
the Misc. Application. However, counsel for the respondents submitted
that inspite of repeated requests they have not been furnished with the
findings recorded by the WTM of SEBI which were sought to be
communicated by the Chief General Manager of SEBI on 08.07.2016.
5. It is relevant to note that the observations made by us in our order
dated July 15, 2016, were in the context of the WTM of SEBI disposing
of the representation of the appellant by approving the draft prepared by
the Assistant Manager of SEBI. In the affidavit in support of the Misc.
Application it is stated that the WTM of SEBI had disposed of the
application as per the past practice prevalent in SEBI. Since, the WTM
had followed the past practice and the said practice is found by this
Tribunal to be erroneous, personal observations made in our order dated
July 15, 2016 be treated as observations attributable to the erroneous
practice followed by SEBI and not against the WTM of SEBI.
6. By our order dated July 15, 2016 we have quashed the
communication of the Chief General Manager dated July 08, 2016.
Moreover, in implementation of our order dated July 15, 2016 and July
25, 2016, the WTM of SEBI has passed fresh order on July 30, 2016 and
communicated the same to the respondents. In these circumstances, the
respondents are not justified in seeking file notings of the WTM of SEBI
referred in the communication addressed by the Chief General Manager
of SEBI on July 08, 2016, which is already set aside. 4
7. Apart from the above, in the affidavit in support of the Misc.
Application it is stated that SEBI has taken immediate steps to
discontinue the past practice which is held by this Tribunal to be
erroneous practice. In these circumstances, in our opinion, the aforesaid
issue be treated as closed. We make it clear, that this order shall not be
treated as precedent so as to challenge the orders passed by SEBI in the
past, which have already attained finality.
8. Misc. Application is disposed of in the aforesaid terms with no
order as to costs.
Sd/-
Justice J.P. Devadhar Presiding Officer
Sd/-
Jog Singh Member
Sd/-
Dr. C.K.G. Nair Member 29.08.2016 Prepared & Compared By: PK
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