Ashish Pannalal Shah vs Sebi
- CitationAppeal No. 252 of 2015
Ratio decidendi
The rule this decision rests on
Where a party's address is correct and the summons, show cause notice and impugned order were sent there, with an acknowledgement of service obtained through the party's broker, a bare assertion of non-receipt does not displace the presumption that the notices were served; the delay in filing an appeal is therefore reckoned from the date of the impugned order, not from the later date on which the party claims to have learned of it. Even if the appellant is given the benefit of doubt and his knowledge is taken to arise only on receipt of the recovery certificate, an unexplained delay of about ten months thereafter cannot be condoned, and a lapse by a previously engaged advocate in pursuing the matter does not by itself furnish a logical reason for condoning such delay.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Date of Decision : 08.09.2017
Misc. Application No. 174 of 2015 And Appeal No. 252 of 2015
Ashish Pannalal Shah B/12 Yashpal Apartments, Near Vijay Char Rasta, Navrangpura, Ahmedabad. .....Appellant
Versus
1.
Securities and Exchange Board of India Ground Floor, Sakar-I, Opp: Gandhigram Railway Station, Ahmedabad.
2. Oasis Media Matrix Ltd.
709, Loha Bhavan, Opp. Old High Court, Ashram Rd, Ahmedabad.
3. Parshwa Finance Through its Proprietor Piyush S Jhaveri 113, Kamdhenu Complex, Ambawadi, Ahmedabad. ......Respondents
Mr. Chitrajeet B. Upadhyaya, Advocate with Mr. Shyamal Bhimani, Advocate for the Apellant.
Mr. Shyam Mehta, Senior Advocate with Mr. Nishant Upadhyay, Advocate i/b K. Ashar & Co. for the Respondent.
None for Respondent Nos. 2 & 3.
CORAM : Justice J.P. Devadhar, Presiding Officer Dr. C.K.G. Nair, Member
Per : Dr. C.K.G. Nair, Member (Oral) 2
1. This appeal is filed by the appellant aggrieved by the order of the
Adjudicating Officer ('AO' for short) of Securities and Exchange Board of
India ('SEBI' for short) dated March 18, 2009 whereby a penalty of ` 25
lakh has been imposed on the appellant for failure to appear before the AO
despite a summons to that effect issued by SEBI. However, since the appeal
is filed after a delay of 2158 days from the date of the impugned order Shri
Shyam Mehta, Learned Senior Counsel for the respondent SEBI objected to
admitting the appeal. Accordingly, merit of the Misc. Application seeking to
condone the delay in filing the appeal has been heard first.
2. As per the records in the appeal produced before us we note that
summons dated September 7, 2006 was issued by SEBI to the appellant in
the address 2, Ghar Angan Apartments, B H Child Care Hospital,
Navrangpura, Ahmedabad - 380009 directing the appellant to appear in
person before the Investigating Authority enquiring into certain violation of
Securities and Exchange Board of India (Prohibition of Fraudulent and
Unfair Trade Practices relating to the Securities Market) Regulations, 1995
('PFUTP Regulations' for short) on September 18, 2006. Subsequently, vide
letter dated September 21, 2006 the appellant was summoned again to
appear before the Investigating Authority as well as to produce certain
documents on October 9, 2006. However, the appellant failed to appear in
person or furnish the requisite documents to SEBI on both these occasions
making it violative of Section 11C(2) and 11C(5) of the SEBI Act, 1992 on
account of non-compliance of summons and failure to furnish requisite
information / documents.
3. Further, a Show Cause Notice ('SCN' for short) dated November 21,
2007 and hearing notice dated December 24, 2008 was issued by the 3
respondent SEBI. Since no response was received to these notices on
January 14, 2009, the SCN was issued in seal cover to the appellant through
the broker of the appellant. Broker confirmed to SEBI vide his letter dated
February 10, 2009 that the said SCN had been duly served upon the
appellant and an acknowledgement to this effect was also given to SEBI.
However, the appellant did not respond to any of these notices and therefore
the respondent SEBI proceeded ex-parte and issued the impugned order on
March 18, 2009.
4. Learned Counsel Shri. Chitrajeet Upadhyaya appearing on behalf of
the appellant stated that as per details given in the appeal paper book as well
as in the Misc. Application seeking condonation of delay the appellant was
never in receipt of either the summons or the SCN. The signatures shown in
the acknowledgement are not that of the appellant or his relatives staying in
his address. In fact, the appellant came to know about the entire matter,
including the impugned order, only in July 2014 when he received the
Recovery Certificate from SEBI dated July 17, 2014. Accordingly he also
pleaded that the delay in filing of the appeal should be taken into account
from this date i.e. July 17, 2014 and he filed the appeal on April 11, 2015
with a delay of about 10 months. Further, though immediately on receipt of
the Recovery Notice the appellant approached an advocate, that advocate
did not pursue the matter for about 6 months and therefore the delay of few
months in filing the appeal may be condoned. In any case, it was argued by
the Counsel for the appellant, even assuming that the appellant did receive
the SCN on February 7, 2009 as confirmed by his past broker the appellant
could not have appeared before the Investigating Authority because the
scheduled date of hearing / appearance was January 13, 2009 which was
already over by the time he would have got the notice. In short, the counsel
for the appellant pleaded that the appellant never received the summons or 4
the SCN or the impugned order and he came to know about the matter only
in July 2014 when he received the Recovery / Attachment Notice. As such,
the appellant was not in any default and the short delay in filing the appeal
thereafter is on account of the lethargy of the advocate initially engaged by
the appellant. However, the counsel for the appellant admits that the address
of the appellant shown in the summons, SCN and/or other communications
issued by the SEBI is factually correct.
5. Learned Senior Counsel for SEBI while taking us through the various
documents also submitted a copy of the ex-parte order dated September 16,
2009 whereby, inter alia, the appellant has been debarred from the securities
market for a period of 6 months on the charges levelled in the SCN issued
for violation of PFUTP Regulations.
6. We have gone through the records including the notices,
acknowledgement etc. Prima-facie it is untenable that the appellant has not
got any of the documents issued by the SEBI till the Recovery Certificate
despite the fact that the address is that of the appellant and the past broker of
the appellant got the SCN delivered at the same address and confirmed it to
SEBI. As such, the delay in filing the appeal has to be reckoned with from
the date of the impugned order. Therefore, the delay is 2158 days in filing
the appeal. Even assuming that the appellant got to know about the matter
only on July 17, 2014, as a benefit of doubt, the delay of 10 months
thereafter is inexplicable. We do not find any logical reason provided by the
appellant in condoning the delay even subsequent to July 17, 2014.
Therefore we find no merit in the arguments put forth by the appellant either
relating to non-receipt of summons / SCN / impugned order or relating to
delay in filing the appeal.
5
7. Accordingly, the Misc. Application is rejected with no order as to
costs. In the result, appeal becomes infructuous and is disposed of
accordingly. Appellant is directed to pay the penalty within 30 days from
the date of this order.
Sd/-
Justice J.P. Devadhar Presiding Officer
Sd/-
Dr. C.K.G. Nair Member
08.09.2017 Prepared and compared by:
msb
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