Devendra Suresh Gupta vs Sebi

Devendra Suresh Gupta Ramdas Niwas, Room No. 1, Chimatpada, Marol Naka, Andheri (East), Mumbai - 400 059. ...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. Vikas Bengani, Advocate for the Appellant.

Ms. Nidhi Singh, Advocate with Ms. Kinjal Bhatt, Advocate i/b Vidhii Partners for the Respondent.

CORAM : Justice Tarun Agarwala, Presiding Officer Dr. C.K.G. Nair, Member

Per : Justice Tarun Agarwala, Presiding Officer (Oral)

Misc. Application No. 228 of 2020:

There is a delay in filing the appeal. For the reasons

stated in the Misc. Application, the delay in filing the appeal

is condoned. Misc. Application is allowed. 2

Appeal No. 176 of 2020:

1.

An order was passed by the Adjudicating Officer ('AO'

for short) of the Securities and Exchange Board of India

('SEBI' for short) on November 28, 2014 imposing a penalty

upon the appellant, against which an Appeal No. 117 of 2015

was filed before this Tribunal which was allowed by an order

dated March 18, 2016. The operative portion of the order is as

under:-

"In these circumstances, in the absence of any clear finding in relation to the relationship of the appellant with other noticees, we set aside the impugned order dated 28/11/2014 qua the Appellant and restore the matter to the file of AO of SEBI for passing fresh order on merits and in accordance with law."

2. After remand no proceedings were initiated and after

more than 45 months a fresh show cause notice dated

December 30, 2019 was issued alleging that the appellant is a

connected person. Based on the aforesaid, fresh replies were

sought and after considering the matter the AO passed the

impugned order dated February 25, 2020 imposing a penalty

of Rs. 1 lakh. The appellant being aggrieved by the aforesaid

order has filed the present appeal.

3

3. Having heard the learned counsel for the parties we are

of the opinion that the impugned order cannot be sustained.

The controversy in the present case is squarely covered by a

decision of this Tribunal dated February 25, 2020 in Appeal

No. 8 of 2020 Vasudev Ramchandra Kamat vs SEBI and

other companion appeals wherein this Tribunal held as

under:-

"4. After remand no proceedings were initiated and after three long years a fresh show cause notice dated August 1, 2019 was issued by the AO alleging that the appellant being part of the group entities had indulged in trading within the group resulting in no change of beneficial ownership and thereby created artificial volume in the scrip of the company which gave a false and misleading appearance in the trading in the scrip. Based on the aforesaid charge, replies were sought and after considering the matter the AO passed the impugned order dated November 22, 2019 imposing a penalty of Rs. 1 lakh. The AO being aggrieved by the aforesaid order has filed the present appeal.

5. Having heard the learned counsel for the parties, we find that the impugned order cannot be sustained. When the matter was remanded by this Tribunal a specific direction was issued that the matter is restored to the file of the AO and the AO was required to decide the matter afresh on merits. It means that the AO was required to decide the matter afresh pursuant to the show cause notice dated October 8, 2013. The AO was required to deal with the charges leveled against the appellant under the said show cause notice dated October 8, 2013. It was not open to the AO to issue a fresh show cause notice incorporating 4

a new charge. Consequently, on this short ground the impugned orders cannot be sustained and are quashed. Both the Appeals are allowed. No order as to costs."

4. In the instant case, no steps were taken for forty five

months and thereafter a fresh show cause notice was issued.

The aforesaid decision is squarely applicable in the instant

case.In the light of the aforesaid, the impugned order cannot

be sustained and is quashed. Appeal is allowed at the

admission stage itself without calling for a reply with no order

as to costs.

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 Presiding Officer on

behalf of the bench and all concerned parties are directed to

act on the digitally signed copy of this order. Parties will act

on production of a digitally signed copy sent by fax and/or

email.

Sd/-

Justice Tarun Agarwala Presiding Officer 5

TARUN Digitally signed by TARUN AGARWAL DN: c=IN, o=PUBLIC WORKS DEPARTMENT UTTAR PRADESH, postalCode=221505, st=Uttar Pradesh, 2.5.4.20=30fcf68685192bbc53e6ff1608a83fb3881de7ac2ab7954d Sd/- AGARWAL 509c85ed6e0f7c41, serialNumber=095f8b286bb0b1cd07ff676611f4f5e7999727d404a a38ca422f9d3529bdb8a3, cn=TARUN AGARWAL Date: 2020.08.15 11:33:33 +05'30' Dr. C.K.G. Nair, Member

14.08.2020 msb