Bimal Kumar Jha vs Sebi

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date of Decision: 23.02.2016

Appeal No. 527 of 2015

Bimal Kumar Jha, S/O Late Shri Dhirender Jha, Village & Post Pandaul Tola, Jamsam, District:- Madhubani, 847 234, Bihar ...Appellant

Versus

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

WITH Appeal No. 528 of 2015

Rakesh Kumar S/O Shri Indradeo Prasad, 207, Brij Nanadan Enclave, Matwari, Hazaribagh, Jharkhand ...Appellant

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. Abhishek Singh, Advocate for the Appellant in Appeal Nos. 527 of 2015 and 528 of 2015.

Mr. Vikram Nankani, Senior Advocate with Mr. Tomu Francis, Advocate for the Respondent in Appeal Nos. 527 of 2015 and 528 of 2015.

CORAM: Justice J.P. Devadhar, Presiding Officer Jog Singh, Member

Per: Justice J.P. Devadhar (Oral) 2

1.

Appellants in these two appeals are aggrieved by the order passed

by the Whole Time Member ("WTM" for short) of Securities and

Exchange Board of India ("SEBI" for short) on July 24, 2015. By the

said order Weird Infrastructure Corporation Limited ("WICL" for short)

and its directors including the appellants herein are inter alia directed to

refund the monies collected by the company through the issuance of

Secured Non-Convertible Redeemable Debentures to the investors with

interest at the rate of 15% per annum from the date when the repayments

became due till the date of actual payment.

2. Basic grievance of the appellants is that they were not the directors

of the company WICL and they have not signed FORM DIR-2.

Although on the website of Registrar of Companies (ROC)/Ministry of

Corporate Affairs (MCA) FORM DIR-2 is uploaded with the signatures

of the appellants to act as directors, it is submitted that the said signatures

are forged. Apart from the above, it is submitted that the appellants were

not served with the notice of hearing and therefore the ex-parte order

passed against the appellants be quashed and set aside.

3. On perusal of para 1 of the impugned order it is seen that on

September 24, 2014 ex-parte interim order was passed against the

company and its directors wherein the names of the appellants do not

appear. Moreover, nothing is recorded in the impugned order to suggest

that subsequent to the ex-parte interim order dated September 24, 2014

the WTM of SEBI deemed it necessary to treat the appellants as directors

of the company and accordingly issue notice to that effect to the 3

appellants. In the absence of any finding recorded in the impugned order

to the effect that the notice of hearing was in fact served upon the

appellants, in our opinion, the impugned order passed against the

appellants cannot be sustained.

4. In these circumstances, we quash and set aside the impugned order

dated July 24, 2015 in so far as it relates to the appellants are concerned

and direct the WTM of SEBI to issue show cause notice to the appellants

if deemed fit and pass appropriate order thereon in accordance with law

after giving an opportunity of hearing to the appellants.

5. Both the appeals are disposed of in above terms with no order as to

costs.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Jog Singh Member 23.02.2016 Prepared & Compared By: PK