Citrus Check Inns Limited vs Sebi

Date of Decision : 06.08.2015 Appeal No. 336of 2015

Citrus Check Inns Limited 16-19, 1st Floor, Shilpin Center, 4, G.D. Ambekar Marg, Wadala, ...Appellant Mumbai - 400 031. 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. Pradeep Sancheti, Senior Advocate with Mr. Sagar Ghogre, Senior Advocate, Mr. C.D. Mehta, Ms. Rashida Savliwala and Mr. Krushanu Pandya i/b Dhruve Liladhar & Co. for the Appellant.

Mr. Vikram Nankani, Senior Advocate with Mr. Tomu Francis and Mr. Prithviraj Choudhari, Advocates i/b Economic Laws Practice for the Respondent.

WITH Appeal No. 359 of 2015

1.

Mr. Omprakash Basantlal Goenka

2. Mr. Prakash Ganpat Utekar

3. Mr. Venkatraman Natrajan

4. Mr. Narayan Shivram Kotnis

16-19, 1st Floor, Shilpin Center, 4, G.D. Ambekar Marg, Wadala, Mumbai - 400 031. ...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. C.D. Mehta, Advocate with Ms. Rashida Savliwala and Mr. Krushanu Pandya i/b Dhruve Liladhar & Co. for Appellants.

Mr. Vikram Nankani, Senior Advocate with Mr. Tomu Francis and Mr. Prithviraj Choudhari, Advocates i/b Economic Laws Practice for the Respondent.

2

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

Per : J.P. Devadhar (Oral)

1. Since the issue involved in these appeals being common, both these

appeals are heard together and disposed of by this common order.

2. Appellants are aggrieved by the ex parte ad interim order passed by

the Whole Time Member (WTM) of Securities and Exchange Board of

India (SEBI) on June 3, 2015. By the said order appellants and its other

directors are, inter alia, restrained from collecting any fresh money from its

members under the existing schemes and are further directed not to launch

any new schemes or plans.

3. Grievance of the appellants is that the above ex parte ad interim order

passed without hearing the appellants inspite of furnishing the requisite

information is causing serious prejudice to the appellants and to its 4.5 lakh

(approx.) members. It is contended that the business carried on by the

appellants does not fall within the category of Collective Investment

Scheme (CIS) defined under Section 11AA of SEBI Act, 1992 and the

prima facie view of SEBI is wholly unsustainable in view of various

decisions of this Tribunal. Counsel for SEBI disputes the above contentions.

4. Before these appeals could be taken up for hearing, the WTM of

SEBI has offered to hear the appellants on August 10, 2015. In this view of

the matter, without going into the merits of the case we direct the appellants

to file their reply, if any, on or before August 10, 2015 and the WTM of

SEBI is directed to hear the appellants on or before August 13, 2015 and

thereafter pass appropriate order thereon and communicate the same to the 3

appellants on or before August 24, 2015. It is made clear that the hearing

shall be restricted to the question as to whether the prima facie view

contained in the ex parte ad interim order dated June 3, 2015 on the grounds

set out therein can be sustained after hearing the appellants or not.

5. It is made clear that if the WTM of SEBI fails to hear the appellants

on or before August 13, 2015 and fails to pass and communicate the final

order on or before August 24, 2015, the ex parte ad interim order dated June

3, 2015 shall forthwith come to an end.

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

costs.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Jog Singh Member

06.08.2015 Prepared and compared by:

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