Jayanta Kumar Basu vs Sebi

Date of Decision : 18.08.2017

Appeal No. 26 of 2017

Jayanta Kumar Basu 6/D, Latafath Hossain Lane, Kolkata - 700 085. .....Appellant

Versus

Northern Regional Office : Securities and Exchange Board of India 5th Floor, Bank of Baroda Building, 16, Parliament Street, New Delhi - 110 001. Head Office: SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051. ......Respondent

Ms. Rehmat Lokhandwala, Advocate for the Appellant.

Mr. Pradeep Sancheti, Senior Advocate with Mr. Tomu Francis and Mr. Vivek Shah, Advocates i/b ELP for the Respondent.

CORAM : Justice J.P. Devadhar, Presiding Officer Dr. C.K.G. Nair, Member

Per : Dr. C.K.G. Nair, Member (Oral)

1.

This appeal is preferred by the appellant aggrieved by the order of the

Whole Time Member ('WTM' for short) of Securities and Exchange Board

of India ('SEBI' for short) dated November 1, 2016. The said order was

passed by the WTM of SEBI following a direction of this Appellate

Tribunal dated March 28, 2016 thereby quashing an earlier order of the

WTM of SEBI dated February 6, 2015 in the matter of Basil International

Limited ('BIL' for short) which confirmed the direction against the

appellant herein and several other entities by an interim order dated May 16, 2

2013. The impugned order, after further examining the matter, has

reconfirmed the findings thereby directing the appellant and other entities to

jointly and severally refund the amount of money collected through the

issuance of Redeemable Preference Shares of BIL as well as restraining the

appellant and other entities from dealing in the securities market for a period

of 4 years from the date of completion of refunding the money collected.

2. We heard Ms. Rehmat Lokhandwala, Learned Counsel for the

appellant. The basic argument of the appellant is that though as per records

of the company (BIL) the appellant was/is shown as a Director, he was

never a Director of the company. He has been shown as a Director based on

forged signature. Accordingly, order of SEBI dated February 6, 2015 was

challenged and this Tribunal had remanded the matter back to the WTM of

SEBI on the ground that the status of the appellant as a Director was not

clear as per various documents produced by the appellant. However, the

impugned order issued thereafter also has not taken cognizance to these

records produced by the appellant before the WTM of SEBI. These records

included copy of FIR dated October 20, 2014 lodged before the Belighata

Police Station, copy of the complaint dated September 22, 2014 filed before

the Additional Chief Judicial Magistrate, copy of a complaint filed before

the Registrar of Companies, Delhi and Haryana and copy of the Writ

Petition filed by the appellant before the High Court of Calcutta etc.

3. The Learned Counsel further argued that though the appellant is

being shown as a Director with effect from August 1, 2011 on the basis of a

letter with the same date purportedly showing his consent to become a

Director, he never gave this letter and his signature has been forged and the

signature shown in the letter does not tally with his signature as given in his

PAN Card which was also produced as record before the WTM of SEBI on 3

June 7, 2014. In addition, the appellant had written to the other Directors of

the company (BIL) stating that based on forged signature he has been shown

as a Director of this company and has been receiving notices, letters etc.

from various Government agencies and since he has never been a Director

of BIL immediate action may be taken by the company for removing his

name from the list of Directors of the Company.

4. Mr. Pradeep Sancheti, Learned Senior Counsel appearing for the

respondent drew our attention to certain other documents on record in the

appeal paper book. Accordingly, it is on record (page 60 of the appeal) that

on January 30, 2013 the appellant wrote to BIL as follows:-

"Basil International Ltd. Corporate Office 27/2 Suren Tagore Rd. Kolkata - 700019.

Sir,

For personal reason I have decided to resign director of the company which please accept the earliest.

Yours faithfully,

Jayanta Kr. Basu 30-1-2013"

This is reiterated in his letter dated September 25, 2013 (page 61 of appeal)

addressed to the Assistant General Manager of SEBI which, inter alia, states

as follows:-

"I ceased to be a Director of M/s. Basil International Limited w.e.f. 01.02.2013. Since then I have no connection with the company."

4 5. The records reproduced in paragraph 4 above clearly shows that the

basic argument of the appellant that he was never a Director of the company

and his signature was forged by someone else to show him as a Director of

the company is a statement far away from truth. Therefore, the appellant has

been submitting false statements and declarations before this Appellate

Tribunal. Since the aforesaid letters addressed by the appellant conclusively

establish that the appellant was a Director of the company, decision of the

WTM of SEBI that the appellant, jointly and severally with other Directors

and the Company are liable to refund the amount collected from the

investors cannot be faulted.

6. In the result, we see no merit in the appeal and the same is hereby

dismissed with no order as to costs.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Dr. C.K.G. Nair Member

18.08.2017 Prepared and compared by:

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