Krupa Sanjay Soni vs Sebi

Date of decision: 22/08/2016

Appeal No.390 of 2014

Krupa Sanjay Soni 36, Malay Bungalow, Near Anurag Bungalow, Behind Saraswati Vidya Mandir School, Science City Road, Sola, Ahmedabad - 380 007. ... Appellant

Versus

Securities and Exchange Board of India SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent

Mr. J.J. Bhatt a/w Ms. Rinku Valanju, Advocates for the Appellant.

Mr. Kumar Desai a/w Mr. Harekrishna Ashar and Mr Saurabh Bachhawat, Advocates i/b K. Ashar & Co. for the Respondent.

WITH Appeal No.178 of 2015

Krunal Gopaldas Rana Z 1072, Khedavalano Khancho, Khambat 21, Anand, Gujarat - 388 620. ... Appellant

Versus

Securities and Exchange Board of India SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent

Mr. J.J. Bhatt a/w Ms. Rinku Valanju, Advocates for the Appellant.

Mr. Kumar Desai a/w Mr. Tomu Francis and Ms. Bhavya Bhandari, Advocates for the Respondent. -2-

CORAM : Jog Singh, Member Dr. C.K.G. Nair, Member

Per : Jog Singh (Oral)

1.

Both the learned Counsel for the parties submit that a common

question of law and facts is involved in the matter and as such both the

Appeals have been heard together.

2. We have heard Mr. J.J. Bhatt along with Ms. Rinku Valanju, learned

Counsel for the Appellant, and Mr. Kumar Desai a/w Mr. Harekrisha Ashar

and Mr. Saurabh Bachhawat, learned Counsel for the Respondent.

3. At the outset, we note that the Appellant in her reply dated 8/3/2013 to

the show-cause notice dated 18/12/2012 has specifically taken a plea (in para 3

internal page 2 of the reply running page 164 of the Appeal) to the effect that

the power under Section 11(4) and 11(B) of the Securities and Exchange Board

of India Act, 1992 (for short " SEBI Act") cannot be used for penal action. It is

stated by the Appellant in the said reply that the power is exceptional,

extraordinary and discretionary in nature and can be used only for regulatory

purposes and not for punishing the incumbents for which other provisions

exist in the said Act and other regulations framed under the SEBI Act. We

have gone into the impugned order and we note that the learned Whole Time

Member (for short "WTM") of SEBI has failed to consider this point in the

impugned order.

4. We also note that the order was reserved by the WTM on 6/9/2013

whereas the impugned order came to be passed almost after 13 months i.e. on

1/10/2014. There is no cogent reason justifying this delay of 13 months in

passing the impugned order.

-3-

5. In the circumstances, we are inclined to remand the matter back to the

file of WTM to consider the matter afresh as has been done in the case of Shri

Ashlesh Gunvantbhai Shah vs. SEBI (Appeal No.312 of 2014 decided on

10/10/2014) in respect of the same impugned order. It is noted that Shri

Ashlesh Shah was also an investor like the Appellant involved in the same

transaction. Therefore, we are inclined to direct the learned WTM to give an

opportunity of hearing to the Appellant and pass order afresh on merits as

expeditiously as possible.

6. Accordingly, in the facts of present case, impugned order dated

October 1, 2014 is quashed and set aside qua the Appellant only and the

matter is restored to the file of WTM of SEBI for passing fresh order on merits

and in accordance with law after giving personal hearing to the Appellant.

All contentions of both the parties are kept open.

7. Appeals are disposed of in the above terms with no order as to costs.

Sd/-

Jog Singh Member

Sd/-

Dr. C.K.G. Nair Member

22/08/2016 Prepared & compared by-ddg