Deepakkumar Shantilal Jain vs Sebi

Date of Decision : 24.09.2019

Appeal No. 490 of 2018

Deepakkumar Shantilal Jain 27/1, Cloth Commercial Centre, Sakar Bazar, Ahmedabad - 380002. ..... Appellant

Versus

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

Ms. Rinku Valanju, Advocate with Ms. Hiral Shah, Advocate i/b R. V. Legal for the Appellant. Mr. Vishal Kanade, Advocate with Mr. Sushant Yadav, Advocate i/b K. Ashar & Co. for the Respondent.

CORAM : Justice Tarun Agarwala, Presiding Officer Dr. C. K. G. Nair, Member Justice M. T. Joshi, Judicial Member

Per : Justice Tarun Agarwala, Presiding Officer (Oral)

1.

The present appeal has been filed against the order of the

Adjudicating Officer (hereinafter referred to as, 'AO') imposing a 2

penalty of Rs. 5 lacs under Section 15HB of the Securities and

Exchange Board of India Act, 1992 (hereinafter referred to as, 'SEBI

Act').

2. The facts leading to the filing of the appeal is, that the Whole

Time Member (hereinafter referred to as, 'WTM') passed an order

dated December 31, 2008 restraining the appellant from buying,

selling and dealing in securities market for a period of two years and

also directed the appellant to disgorge an amount of Rs. 54,76,653/-

alongwith interest at the rate of 10% p.a. The WTM further directed

that in the event the amount was not paid within the stipulated

period, the appellant would be restrained from buying, selling or

dealing in the securities market for a further period of 10 years

without prejudice to SEBI's right to enforce disgorgement.

3. The appellant challenged the order of the WTM by filing an

appeal before the Tribunal which was allowed by an order dated

December 30, 2009 and the order of the WTM was set aside. SEBI

preferred an appeal before the Hon'ble Supreme Court of India

which was allowed by judgment dated July 11, 2016 and the order of

the Tribunal was set aside. The Hon'ble Supreme Court further

directed the appellant to comply with the order of the WTM within 3

two months. It transpires that the appellant filed a review application

which was rejected. Curative Petition was also filed which was also

dismissed. Since the disgorgement amount was not deposited, SEBI

issued an order dated September 7, 2016 suspending the demat

account of the appellant. Eventually, a recovery certificate dated

December 26, 2017 was issued pursuant to which a sum of

Rs. 35,40,000 was recovered.

4. Since the order of the WTM was not complied with, a show

cause notice dated April 23, 2018 was issued under Rule 4(1) of the

Securities and Exchange Board of India (Procedure for Holding

Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995

(hereinafter referred to as, 'Adjudication Rules'). The appellant

submitted his reply and after giving an opportunity of hearing, the

AO passed the impugned order imposing a penalty of Rs. 5 lacs for

failure to comply with the directions issued by the WTM.

5. Having heard the learned counsel for the parties, we find that

admittedly as on date the entire disgorgement amount alongwith

interest has not been paid. Admittedly, there has been a failure on

the part of the appellant in not complying with the order of WTM as

well as failure on the part of the appellant in not complying with the 4

order of the Hon'ble Supreme Court of India. Thus, no relief can be

granted to the appellant. The contention that the appellant will pay

the amount in installment or that they are not entitled to pay the

interest cannot be accepted nor can be considered.

6. Thus, for the aforesaid reasons, there is no merit in the appeal

and is dismissed with no order as to costs.

Sd/-

Justice Tarun Agarwala Presiding Officer

Sd/-

Dr. C. K. G. Nair Member

Sd/-

Justice M. T. Joshi Judicial Member

24.09.2019 Prepared & Compared by PTM