Bajranglal B. Maloo Huf & Ors. vs Sebi

Date of Decision: 31.08.2021

Misc. Application No. 891 of 2021 (Delay Application) And Appeal No. 564 of 2021

1.

Bajranglal B. Maloo HUF 1st Floor, Shree Ambe Society, Wardhman Nagar, Nagpur- 440 008

2. Bajranglal Bankatlal Maloo 1st Floor, Shree Ambe Society, Wardhman Nagar, Nagpur- 440 008

3. Dinesh Maloo 1st Floor, Shree Ambe Society, Wardhman Nagar, Nagpur- 440 008

4. Lalchand B Maloo HUF 3rd Floor, Jai Bhawani Society, Wardhman Nagar, C A Road, Nagpur 440 008

5. Lalchand Bankatlal Maloo 3rd Floor, Jai Bhawani Society, Wardhman Nagar, C A Road, Nagpur 440 008

6. Madhu Sunil Maloo 102, Balaji Vihar, Near Hanuman Mandir, Ekta Nagar, Bapat Nagar, Chandrapur- 442 401

7. Mahesh Maloo 1rd Floor, Jai Bhawani Society, C A Road, Nagpur- 440 008 2

8. Murli S Maloo 504, Sukh Sagar Society, East, Wardhman Nagar, Old Bhandara Road, Nagpur- 440 008

9. Nandlal Bankatlal Maloo 1st Floor, Jai Bhawani Society, C A Road, Nagpur 440 008

10. Nandlal Maloo HUF 1st Floor, Jai Bhawani Society, C A Road, Nagpur 440 008

11. Nirmaladevi Nandlal Maloo 1st Floor, Jai Bhawani Society, C A Road, Nagpur 440 008

12. Premadevi Sobhagmal Maloo Village Jakheda, Via Badi Khatu, Dist. Nagour Rajasthan- 341 301

13. Sangeetadevi Lalchand Maloo 3rd Floor, Jai Bhawani Society, Wardhman Nagar, C A Road, Nagpur 440 008

14. Sarita M Maloo 504, Sukh Sagar Society, East, Wardhman Nagar, Old Bhandara Road, Nagpur- 440 008

15. Shantadevi Bajranglal Maloo 1st Floor, Shree Ambe Society, Wardhman Nagar, Nagpur- 440 008

16. Shilpa Maloo 1st Floor, Jai Bhawani Society, CA Road, Nagpur- 440 008 3

17. Shobhagmal Maloo Village Jakheda, Via Badi Khatu, Dist. Nagour, Rajasthan- 341 301

18. Sunilkumar Sobhagmal Maloo 102, Balaji Vihar, Near Hanuman Mandir, Ekta Nagar, Bapat Nagar, Chandrapur- 442 401 ...Appellants

Versus

Securities and Exchange Board of India, SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai- 400 051 ...Respondent

Mr. Kunal Kataria, Advocate with Mr. Ankur Loona, Ms. Aparna Wagle and Ms. Swapna Roopavate, Advocates i/b. Allliance Law for Appellants.

Mr. Pradeep Sancheti, Senior Advocate with Ms. Nidhi Singh, Ms. Deepti Mohan and Ms. Aditi Palnitkar, Advocates i/b Vidhii Partners Advocates for the Respondent.

CORAM: Justice Tarun Agarwala, Presiding Officer Justice M. T. Joshi, Judicial Member

Per: Justice Tarun Agarwala, Presiding Officer (Oral)

1. We have heard the learned senior counsel/ learned

counsel for the parties. The appellants have challenged the

order dated June 30, 2020 as well as the Recovery / Attachment

Notice dated June 08, 2021 issued by the Recovery Officer.

There is a delay of 343 days in the filing of the appeal. The

ground urged is, that the order dated June 30, 2020 was never 4

served upon the appellants and that they only came to know

when the attachment order was passed attaching their bank

accounts. Considering the aforesaid, coupled with the fact that

the impugned order was passed during the pandemic period we

condone the delay. Cause shown is sufficient, the delay is

condoned. The application is allowed.

2. It transpires that for non-compliance of the order of the

Whole Time Member ("WTM" for convenience) dated July 31,

2015 directing the appellants to make a public offer, a show

cause notice was issued which was duly served on all the

appellants. Some of the appellants filed a reply. The

Adjudicating Officer ("AO" for convenience) after considering

the provisions of Rule 4(3) of the Securities and Exchange

Board of India (Procedure for Holding Inquiry and Imposing

Penalties by Adjudicating Officer) Rules, 1995 found that there

was no need to fix a date for appearance of the parties for

hearing as the facts are admitted and accordingly proceeded ex-

parte and passed the impugned order dated June 30, 2020

imposing a penalty of Rs. 11 Crores for non-compliance of the

order of the WTM dated July 31, 2015.

5 3. Having perused the impugned order, we are of the

opinion that the impugned order is violative of the principles of

natural justice. Rule 4(3) of the Rules of 1995 clearly requires

the AO to issue a notice fixing a date for appearance and

thereafter give an opportunity of hearing before passing the

impugned order which in the instant case has not been done.

Therefore, the impugned order cannot be sustained and is

quashed. The attachment order is also set aside. The appeal is

allowed.

4. We accordingly remit the matter to the AO to decide

the matter afresh after granting an opportunity of hearing to the

appellants. In this regard, all the appellants will appear before

the AO on September 13, 2021 and the AO will proceed

accordingly in accordance with law.

5. The present matter was heard through video conference

due to Covid-19 pandemic. At this stage it is not possible to sign

a copy of this order nor a certified copy of this order could be

issued by the Registry. In these circumstances, this order will be

digitally signed by the Private Secretary on behalf of the bench

and all concerned parties are directed to act on the digitally 6

signed copy of this order. Parties will act on production of a

digitally signed copy sent by fax and/or email.

Justice Tarun Agarwala Presiding Officer

Justice M. T. Joshi Judicial Member 31.08.2021 RAJALA Digitally by signed

PK KSHMI NAIR RAJALAKSHMI H

Date: 2021.09.01 H NAIR 15:37:03 +05'30'