Kkdil Nidhi Ltd. & Ors. vs Sebi

Date of Decision: 4.5.2021

Misc. Application No.567 of 2021 (Delay Application) And Appeal No.206 of 2021

1.

KKDIL Nidhi Ltd.

C/o. Sujata Dash, Bank Colony, 8th Lane, Near Radio Station, Berhampur, Ganjam 760001.

2. Mrs. Sujata Dash C/o. Sujata Dash, Bank Colony, 8th Lane, Near Radio Station, Berhampur, Ganjam 760001.

3. Mr. Bipin Chandra Dash C/o. Sujata Dash, Bank Colony, 8th Lane, Near Radio Station, Berhampur, Ganjam 760001.

4. Mr. Santhosh Kumar Panda At Chandan Nagar, Po. Ankuli Berhampur, Ganjam Dist.

Odhisha - 760010.

5. Mr. Hara Prasad Das Gauradeipur, G.P- Kodala, Dist -

Ganjam Odhisha - 761032. ...Appellants

Versus

Securities and Exchange Board of India SEBI Bhavan, Plot No.C4-A, 2

'G' Block, Bandra-Kurla Complex, Bandra (East), Mumbai-400051. ...Respondent

Mr. Ramesh Chandra Mishra, PCS with Mr. Lokanath Mishra, Advocate for the Appellant.

Mr. Anubhav Ghosh, Advocate with Mr. Ravishekhar Pandey, Advocate i/b. The Law Point for the Respondent.

CORAM: Justice Tarun Agarwala, Presiding Officer Justice M.T. Joshi, Judicial Member

Per: Justice Tarun Agarwala, Presiding Officer (Oral)

1. The present appeal has been filed against the order

dated 28th October, 2016 issued by the Whole Time

Member ('WTM' for short) directing the appellants to

refund the amount collected through the issuance of

equity shares. The appellants were also restrained

from accessing the securities market. The appellants

have also challenged the order of the attachment dated

29th December, 2020 which was issued pursuant to the

impugned order dated 28th October, 2016. 3

2. There is a delay of 1508 days in the filing of the

appeal and, accordingly, an application for

condonation of delay has been filed. The ground urged

is that the husband of appellant no.2 Mr. Baman

Chandra Dash was the main person behind the

incorporation of the Company and was whole and sole

incharge. Appellant no.2 was only a homemaker and

appellant no.3 is the father in law of appellant no.2 and

is an aged person and had nothing to do with the day to

day affairs in the running of the Company. It was

contended that appellant nos.2 and 3 alongwith

appellant nos.4 and 5 were made Directors in the

Company but had no role to play. It was also

contended that the respondent issued an ex-parte ad-

interim order dated 25th March, 2015 pursuant to which

the appellants requested for an opportunity to be heard

at Bhubaneswar in Orissa and, thereafter, the

confirmatory order dated 28th October 2016 was

passed. Since no compliance was made the attachment 4

order was passed. It was contented that the appellant

no.2's husband was the main person who was incharge

of the affairs of the Company and unfortunately died

on 9th February, 2018 under mysterious circumstances.

In such circumstances, the appellants have prayed that

the delay is not deliberate but on account of the

aforesaid circumstances the delay may be condoned

and the matter may be heard on merits.

3. On the other hand, the learned counsel for the

respondent contended that he has the requisite proof

which he can file, namely, that the notices were duly

served upon the appellants, the acknowledgement due

cards are proof of this fact. Apart from the aforesaid,

publications were made in the newspapers and the

appellants appeared and filed their replies and

participated in the proceedings. It was contended that

no sufficient cause has been shown and, therefore, the

application for condonation of delay should be

rejected.

5

4. Having heard the learned counsel for the parties we

find that there is an inordinate delay in the filing of the

appeal. No sufficient cause has been shown to

condone the delay. The appellants were aware of the

order and participated in the proceedings but took no

steps to challenge the order after the impugned order

was passed. The fact that the appellants were unaware

of the proceedings is an afterthought and cannot be

believed. The fact that the appellant no.2's husband

was whole and sole person who was in charge cannot

be relied upon. The appellants were Directors and had

a responsible role to play and they cannot shy away

from the fact that they were unaware of the day to day

affairs of the Company.

5. We are of the opinion that the reasons given are not

bonafide and, in any case, sufficient cause has not been

shown.

6. In Basawaraj and Anr. vs. Special Land

Acquisition Officer, (2013) 14 SCC 81 the Supreme 6

Court held that the discretion to condone the delay has

to be exercised judicially based on facts and

circumstances of each case and that sufficient cause

cannot be given a liberal interpretation if lack of

bonafide is attributed to a party. The Supreme Court

further held that delay cannot be condoned on

equitable ground beyond the limits permitted expressly

by statute.

7. The Supreme Court in Ram Nath Sao and Ors.

(supra) held that the expression "sufficient cause"

should receive a liberal construction so as to advance

substantial justice when no negligence or inaction or

want of bonafide is imputable to a party. The same

view was reiterated by the Supreme Court in Madanlal

vs. Shyamlal, (2002) 1 SCC 535.

8. In Balwant Singh (Dead) vs Jagdish Singh & Ors,

(2010) 8 SCC 685 Supreme Court held that the

expression "sufficient cause" means the presence of

legal and adequate reasons. The decisions cited by the 7

learned counsel for the appellant are of no avail and, in

any case, not applicable in the present circumstance of

the case.

9. This Tribunal is possessed with the exercise of

judicial discretion in condoning the delay if sufficient

or adequate reason is given. It is also a settled

proposition of law that the law of limitation may

harshly affect a particular party but it has to be applied

with all its rigour when the statute so prescribes. The

court has no power to extend the period of limitation

on equitable grounds as held by the Supreme Court in

Basawaraj and Anr.(supra). In the instant case we do

find any legal or adequate reasons to condone the

delay.

10. In the light of the aforesaid, the learned counsel for

the appellant referred to the case of Collector, Land

Acquisition vs. Mst. Katiji and Ors. MANU/SC/0460/

1987 which is distinguishable and is not applicable. In

the said case Supreme Court was considering the 8

impersonal machinery of the State Government. The

bureaucratic red tapism in pushing the files and passing

the buck to others and in that scenario held that

'sufficient cause' is adequately elastic to enable the

courts to apply the law in a meaningful manner which

subserve the ends of justice. The said decision is,

however, not applicable in the instant case.

11. For the reasons stated aforesaid, we do not find any

sufficient cause being shown for condoning the

inordinate delay of 1508 days in filing the appeal. The

application is rejected as a result of which the appeal is

also dismissed.

12. The present matter was heard through video

conference due to Covid-19 pandemic. At this stage it

is not possible to sign a copy of this order nor a

certified copy of this order could be issued by the

registry. In these circumstances, this order will be

digitally signed by the Private Secretary on behalf of

the bench and all concerned parties are directed to act 9

on the digitally signed copy of this order. Parties will

act on production of a digitally signed copy sent by fax

and/or email.

Justice Tarun Agarwala Presiding Officer

Justice M.T. Joshi Judicial Member

Digitally signed RAJALA byRAJALAKSHMI H 4.5.2021 KSHMI NAIR Date:

RHN H NAIR 2021.05.12 16:34:57 +05'30'