Ratio decidendi
The rule this decision rests on
The ex-parte nature of the adjudication does not vitiate the order where the appellant was duly served with the show cause notice and the hearing notice, was given time to reply and to file a settlement application, and failed to file a reply or appear on the date fixed; in such circumstances the appellant is solely responsible for the non-consideration of his case, and an unsubstantiated plea of illness, raised for the first time in appeal without any prior indication or application for adjournment, does not establish that reasonable and sufficient opportunity was denied.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
BEFORE THE SECURITIES APPELLATE TRIBUNALMUMBAIOrder Reserved on: 17.9.2020Date of Decision : 26.10.2020Appeal No.204 of 2019Ketan Shah HUFFlat No.D-3/2, Ground Floor,Vasupujya, Sarvodaya Nagar,Near Jain Mandir, Mulund (West),Mumbai - 400080. ...AppellantVersusSecurities & Exchange Board of IndiaSEBI Bhavan, G Block,Bandra Kurla Complex, Bandra (East),Mumbai - 400051. ...RespondentMr. Nirman Sharma, Advocate with Ms. Nikita Bhansali,Advocate i/b Yasmin Bhansali & Co. for the Appellant.Mr. Abhiraj Arora, Advocate with Ms. Rashi Dalmia,Advocate i/b. ELP for the Respondent.CORAM: Justice Tarun Agarwala, Presiding OfficerDr. C.K.G. Nair, MemberJustice M.T. Joshi, Judicial MemberPer : Justice Tarun Agarwala, Presiding Officer1.The present appeal has been filed against the orderof the Adjudicating Officer imposing a penalty of Rs.5lakhs for violation of Regulations 3 and 4 of the2Securities and Exchange Board of India (Prohibition ofFraudulent and Unfair Trade Practices Relating toSecurities Market) Regulations, 2003 (hereinafterreferred to as the 'PFUTP Regulations').2. We have heard Mr. Nirman Sharma, Advocateassisted by Ms. Nikita Bhansali, Advocate for theAppellant and Mr. Abhiraj Arora, Advocate assisted byMs. Rashi Dalmia, Advocate for the Respondent. Theonly contention raised by the learned counsel for theappellant is, that the impugned order is an ex-parteorder against the appellant and that no reasonableand/or sufficient opportunity was given to the appellantto defend himself.3. In this regard, we find that the show cause noticedated 31st August, 2018 was duly served upon theappellant on 7th September, 2018. In response to theshow cause notice the appellant vide letter dated 26thSeptember, 2018 communicated its intention to theadjudicating officer that he would be filing a settlementapplication under the settlement regime. The3adjudicating officer vide notice dated 9th October, 2018advised the appellant to file a reply by 15th October,2018 and also advised the appellant to inform about thefiling of the settlement application. The adjudicatingofficer further informed that the settlement proceedingswill not affect the adjudication proceedings except ofthe passing of the final order which would be kept inabeyance till the disposal of the settlement application.The said notice was duly delivered upon the appellanton 13th October, 2018.4. Since no reply was filed, the adjudicating officerissued a notice fixing 24th October, 2018 for finalhearing. This notice was duly served upon theappellant on 17th October, 2018.5. Inspite of service of notice and inspite of time beinggranted to file objections, the appellant did not file anyreply nor filed any settlement application. Further, theappellant failed to appear before the adjudicatingofficer on the date fixed and, accordingly, theadjudicating officer proceeded ex-parte and after4considering the material evidence on record passed theimpugned order imposing a penalty.6. The contention of the learned counsel for theappellant that no reasonable or sufficient opportunitywas granted is patently erroneous. The recordindicates that the appellant was duly served andshowed his intention to file the settlement applicationwhich he did not do so. Further, inspite of time beinggranted, the appellant did not file any reply to the showcause notice. Thus, the contention that the impugnedorder is an ex-parte order is patently erroneous.Further, the contention that no reasonable or sufficientopportunity was given is again erroneous. We find thatsufficient opportunity was given to the appellant whichhe failed to avail and, therefore, he is aloneresponsible. The contention that the karta wasindisposed and was advised complete bed rest as hewas suffering from hypertension is clearly anafterthought and, in any case, it did not prevent himfrom applying for adjournment which he did not do so.5We find that the show cause notice was duly served on7th September, 2018 based on which he intimated theadjudicating officer that he would be filing a settlementapplication. The appellant nowhere indicated that hewas suffering from hypertension and consequently weare of the opinion that the appellant is now making alame excuse.7. On the merits we find that the controversy issquarely covered by the decision of this Tribunal inGlobal Earth Properties and Developers Pvt. Ltd. vs.SEBI and other connected appeals, Appeal No.212 of2020 decided on 14th September, 2020.8. In view of the aforesaid, the appeal isdismissed with no order as to costs. The appellant ishowever granted two months time to deposit theamount pursuant to the impugned order.9. The present matter was heard through videoconference due to Covid-19 pandemic. At this stage itis not possible to sign a copy of this order nor acertified copy of this order could be issued by the6registry. In these circumstances, this order will bedigitally signed by the Presiding Officer on behalf ofthe bench and all concerned parties are directed to acton the digitally signed copy of this order. Parties willact on production of a digitally signed copy sent by faxand/or email.
Justice Tarun Agarwala Presiding Officer TARUN Digitally signed by TARUN AGARWAL DN: c=IN, o=PUBLIC WORKS DEPARTMENT UTTAR PRADESH, postalCode=221505, st=Uttar Pradesh, 2.5.4.20=30fcf68685192bbc53e6ff1608a83fb3881de7ac2ab7954d509c8
AGARWAL 5ed6e0f7c41, serialNumber=095f8b286bb0b1cd07ff676611f4f5e7999727d404aa38ca 422f9d3529bdb8a3, cn=TARUN AGARWAL Date: 2020.10.26 11:28:41 +05'30'
Justice M.T. Joshi Judicial Member
