Jayesh P. Khandwala & Anr. vs Sebi
- CitationAppeal No. 184 of 2013
Ratio decidendi
The rule this decision rests on
The precipe order of 5 February 2015 corrects a clerical error by deleting the word "same" from para 1 of the 16 December 2014 order. It decides no point of substantive law and records no reasoning beyond that correction, so there is no ratio to extract from it. The 16 December 2014 order rests on the following reasoning, which is the only part that carries a ratio: A quasi-judicial order directing disgorgement with interest cannot enhance the rate of interest from an earlier round without giving reasons for the increase; an order that gives no reasons for such an enhancement is infirm and is liable to be set aside. A finding that a claimed fact is unsupported by documentary proof cannot stand where the record contains documents (bank statements and contract notes) that were not considered; the failure to consider material evidence vitiates the finding, so the order is liable to be set aside on that ground. Where an impugned order is set aside for such infirmities, the Tribunal may remit the matter to the adjudicating authority to pass a fresh order on merits after hearing the parties, and may direct that an existing interim restraint continue until the expiry of a fixed period pending the fresh order.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI
Appeal No. 184 of 2013
Date of Decision : 05.02.2015
1.
Jayesh P. Khandwala Proprietor : Zealous Trading Company 12, Shivalik Villa, Opp. Saundarya Villa, Rajpath Club - Ambli Road, Ahmedabad - 380 058.
2. Jayesh P. Khandwala 12, Shivalik Villa, Opp. Saundarya Villa, Rajpath Club - Ambli Road, Ahmedabad - 380 058. ..... Appellants
Versus
Securities and Exchange Board of India SEBI Bhavan, Plot No. C-4A, G-Block, Bandra Kurla Complex, Mumbai - 400 051. ......Respondent
Mr. Ravichandra Hegde, Advocate with Mr. Dhaval Kothari, Advocate for the Appellants.
Mr. Shiraz Rustomjee, Senior Advocate for the Respondent.
CORAM : Justice J. P. Devadhar, Presiding Officer Jog Singh, Member A. S. Lamba, Member
Per : Justice J. P. Devadhar (Oral)
1. Matter not on Board. Mentioned by precipe. Counsel for
respondent stated that in para 1 of our order passed in the above Appeal
on December 16, 2014 the word 'same WTM' is inadvertently mentioned
instead of the word 'WTM' and, therefore, the word 'same' to be deleted.
Counsel for the appellants has no objection. Accordingly, the registry is 2
directed to delete the word 'same' in para 1 of our order dated December
16, 2014.
2. Precipe is disposed of accordingly.
Sd/-
Justice J. P. Devadhar Presiding Officer
Sd/-
Jog Singh Member
Sd/-
A. S. Lamba Member
05.02.2015 Prepared & Compared by PTM
Order dated December 16, 2014 as amended by order dated February 05, 2015 reads thus:-
3
BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI
Date of Decision: 16.12.2014
Appeal No. 184 of 2013
1. Jayesh P. Khandwala HUF Prop: M/s Zealous Trading Company 12, Shivalik Villa, Opp. Saundarya Villa, Rajpath Club-Ambli Road, Ahmedabad- 380 058
2. Jayesh P. Khandwala 12, Shivalik Villa, Opp. Saundarya Villa, Rajpath Club-Ambli Road, Ahmedabad-380058 ...Appellants
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. Somasekhar Sundaresan, Advocate with Mr. Paras Parekh, Advocate i/b J. Sagar Associates for Appellants.
Mr. Shiraz Rustomjee, Sernior Advocate with Mr. Rushin Kapadia, Advocate i/b K. Ashar & Co. for the Respondent.
CORAM: Justice J.P. Devadhar, Presiding Officer Jog Singh, Member A.S. Lamba, Member
Per: Justice J.P. Devadhar (Oral)
1. This appeal is filed to challenge the order passed by the Whole
Time Member ("WTM" for short) of Securities and Exchange Board
of India ("SEBI" for short) on August 12, 2013. On perusal of the
said order it is seen that the WTM has directed the appellants to 4
disgorge the unlawful gain with interest as the interest at the rate of
12% per annum for 8 years (2005-2013) whereas, in the earlier round
of litigation, the WTM had directed the appellants to disgorge the
unlawful gain with interest at 6% per annum. No reasons are set out
in the impugned order for the increase in the interest rate.
2. Similarly in the impugned order the WTM has rejected the
contention that Bhanuprasad owned ` 7.43 crore to the appellants on
ground that apart from ledger account, appellants had not produced
any documentary proof in support of above contention. However, it
is seen from the compilation, that apart from ledger appellants had
produced bank statements and contract notes in support of their
contention, which were not taken into consideration in the impugned
order.
3. In view of above infirmities in the impugned order, learned
counsel for SEBI requests that the impugned order be set aside with
liberty to the WTM to pass fresh order on merits after hearing the
appellants.
4. Learned counsel for the appellants while agreeing to the
suggestion made by the counsel for the respondent, requests that the
debarment imposed under para 23(d) of the impugned order may also
be lifted as has been done in the earlier round of litigation.
5. As per the request made by counsel on both sides, we set aside
the impugned order dated August 12, 2013 and direct the WTM of
SEBI to pass fresh order on merits and in accordance with law after
hearing the appellants within a period of three months from today.
However, in view of the fact that debarment under para 23(d) of the 5
impugned order has been in operation upto this date, we direct that
till the expiry of three months from today, the appellants shall
continue to be debarred from accessing the securities market or from
buying or selling or dealing in securities in any manner whatsoever
as more particularly set out in para 23(d) of the impugned order.
6. SEBI is permitted to issue supplementary show cause notice, if
deemed fit in relation to the enhancement of interest rate. Similarly,
it would be open to the appellants to file reply and to adduce
additional documents in support of their contention.
7. All contentions of both sides are kept open.
8. Appeal is disposed of in the above terms with no order as to
costs.
Sd/-
Justice J.P. Devadhar Presiding Officer
Sd/-
Jog Singh Member
Sd/-
A S Lamba Member
16.12.2014 Prepared & Compared By: PK
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