Iifl Securities Ltd. vs Sebi
- CitationAppeal No. 527 of 2023
Ratio decidendi
The rule this decision rests on
The Tribunal's reasoning for staying the impugned order rests on the following: where the subsequent proceedings arise from the same facts and allegations as earlier proceedings in which interim orders have been passed and remain pending before the Tribunal, the prima facie question whether separate proceedings on those same facts are permissible under the SEBI Act requires consideration, and pending that consideration the effect and operation of the later impugned order may be stayed.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Date: 27.06.2023
Misc. Application No. 776 of 2023 And Appeal No. 527 of 2023
IIFL Securities Ltd. ...Appellant
Versus
Securities and Exchange Board of India ...Respondent
Mr. Darius Khambata, Senior Advocate with Mr. Somasekhar Sundaresan, Mr. Kunal Katariya, Mr. Sahebrao Wamanrao Buktare, Ms. Ashmita Goradia - Advocates and Mr. Shardul Shah - CA, i/b Shah & Ramaiya, Chartered Accountants and Mrs. Mamta Singh and Mr. Prasad Umrale - Authorized Representative for the Appellant.
Mr. Gaurav Joshi, Senior Advocate with Mr. Suraj Choudhary, Mr. Nishit Dhruva, Mr. Ravishekhar Pandey, Ms. Rasika Ghate and Ms. Shefali Shankar, Advocates i/b. MDP & Partners, Advocates for the Respondent.
ORDER:
1. Connect with Appeal No. 387 and 388 of 2022.
2. Let a reply be filed by the respondent within three weeks
from today. Rejoinder may be filed within three weeks
thereafter. The matter would be listed for admission and for
final disposal on August 23, 2023.
2
3. We find that the allegations against the appellant is, that
they were mixing clients' funds with proprietary funds by
routing transactions through common control accounts, and that
they were utilizing funds of credit balance clients for settlement
obligation of debit balance clients and, further utilizing funds of
credit balance clients for settlement obligation of proprietary
trades.
4. It transpires that the aforesaid violation was made on the
basis of inspection of the books of account which was carried
out for the period April 01, 2011 to December 31, 2013
pursuant to which the Adjudicating Officer ("AO") initiated
proceedings which resulted in passing a penalty order of Rs. 1
crore each. Against these penalty orders Appeal Nos. 387 and
388 of 2022 was filed in which interim orders were passed by
the Tribunal. These appeals are pending consideration before
this Tribunal. Further, supplementary inspection was carried
out up to January 31, 2017 pursuant to which the present
proceedings were initiated and the impugned order was passed.
In paragraph 22 of the impugned order the Whole Time
Member ("WTM") records that the instant proceedings arose
from the same facts and allegations and further went on to hold
that it was permissible under the framework of the SEBI Act to 3
issue separate proceedings. Prima facie, this aspect is required
to be considered.
5. In view of the aforesaid, since interim orders were passed
in the earlier appeals which are pending, we direct that the
effect and operation of the impugned order shall remain stayed
during the pendency of the appeal.
6. This order will be digitally signed by the Private Secretary
on behalf of the bench and all concerned parties are directed to
act on the digitally signed copy of this order. Certified copy of
this order is also available from the Registry on payment of
usual charges.
Justice Tarun Agarwala Presiding Officer
Ms. Meera Swarup Technical Member PRERNA Digitally by PRERNA signed
27.06.2023 PK MANISH Date:
MANISH KHARE
KHARE 2023.06.28 11:52:06 +05'30'
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