Disposal of Representation made on behalf of Shri. D.S.Gagrat in the matter of Bombay Dyeing and Manufacturing Company Ltd
- CitationWTM/AB/CFID/CFID_1/21141/2022-23
Ratio decidendi
The rule this decision rests on
Where a noticee dies before a penalty is imposed on him, the proviso to Section 28B(1) of the SEBI Act, 1992 applies, and the liability of his legal heirs to pay that penalty is not attracted. Where the noticee's death is brought to the Board's notice after a final order, and the death preceded the imposition of the penalty, the restraint and prohibition imposed on him by that order stand abated as against him.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
1. Securities and Exchange Board of India had passed an Order dated October 21, 2022 bearing reference number WTM/AB/CFID/CFID_1/20686/2022-23 (hereinafter referred to as "Final Order"), inter alia, against Mr. D. S. Gagrat (hereinafter referred to as “Noticee no. 6”) in the matter of fraudulent misrepresentation of financial statements of the Bombay Dyeing & Manufacturing Co. Ltd. Vide the Final Order, the Noticee no. 6 was restrained from accessing the securities market in any manner whatsoever, and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, in any manner, whatsoever, for a period of one (1) year. The Noticee no. 6 was also visited with a penalty of Rs. 25 Lakhs.
2. Pursuant to the Final Order, SEBI received an email dated November 2, 2022, from Scal Services Ltd. i.e. the company in which the Noticee no. 6 was one of the director, inter alia forwarding the scanned copy of death certificate of the Noticee no. 6, as issued by the Municipal Corporation of Greater Mumbai, on September 21, 2022, certifying the date of death of the Noticee no. 6 as September 10, 2022.
3. The Final Order gave to the Noticees therein including the Noticee no. 6, a time of 45 days, from the date of coming into force of the Final Order, to pay the penalty amount, which is yet to expire. In the meantime, email dated November 02, 2022 under reference, has been received.
4. In accordance with the proviso to Section 28B(1) of the SEBI Act, 1992, since the death of the Noticee no. 6 occurred before the imposition of penalty vide the Final Order, liability of legal heir(s) of the Noticee no. 6 to pay the penalty, is not attracted.
5. Previously, in a similar situation in the matter of “Alleged Market Manipulation using GDR Issues by CAT Technologies Limited” wherein the death of the noticee was brought to the notice of SEBI after the passing of final order by SEBI, SEBI passed an order dated June 18, 2019 abating the prohibition imposed on the noticee by the final order.
6. Upon consideration of the above, it is hereby clarified that the prohibition/ restraint imposed upon the Noticee no. 6 vide paragraph 53(ii) of the Final Order and the penalty imposed upon the Noticee no. 6 vide paragraph 53(iv) of the Final Order stand abated qua the Noticee no. 6.
7. The information received through email dated November 02, 2022 from Scal Services Ltd. is accordingly taken note and disposed of.
8. This order comes into force with immediate effect.
9. A copy of this order shall be served on the Noticee no. 6, recognised stock exchanges, Depositories and RTA’s of Mutual Funds, for information and necessary action.
Sd/-
Date: November 14, 2022 ANANTA BARUA Place: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free