Maharashtra Polybutenes Ltd. vs Sebi

Order Reserved On: 23.04.2019 Date of Decision: 26.04.2019

Misc. Application No. 262 of 2018 And Appeal No. 319 of 2018

Brijmohan Rathi Plot No. R- 802 TTC, Industrial Area, Thane Belapur Road, MHAPE, Navi Mumbai- 400 701 ...Appellant 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. Anant Upadhyay, Advocate for the Appellant. Mr. Anubhav Ghosh, Advocate with Ms. Vidhi Jhawar, Advocate i/b The Law Point for the Respondent.

WITH Misc. Application No. 271 of 2018 And Appeal No. 332 of 2018

Sunciti Financial Services Pvt. Ltd. Plot No. R- 802 TTC, Industrial Area, Thane Belapur Road, MHAPE, Navi Mumbai- 400 701 ...Appellant Versus Securities and Exchange Board of India, SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 ...Respondent 2

Mr. Anant Upadhyay, Advocate for the Appellant.

Mr. Anubhav Ghosh, Advocate with Ms. Vidhi Jhawar, Advocate i/b The Law Point for the Respondent.

WITH Misc. Application No. 269 of 2018 And Appeal No. 330 of 2018

New Era Advisors Pvt. Ltd. Plot No. R- 802 TTC, Industrial Area, Thane Belapur Road, MHAPE, Navi Mumbai- 400 701 ...Appellant

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. Anant Upadhyay, Advocate for the Appellant.

Mr. Anubhav Ghosh, Advocate with Ms. Vidhi Jhawar, Advocate i/b The Law Point for the Respondent.

WITH Misc. Application No. 270 of 2018 And Appeal No. 331 of 2018

Maharashtra Polybutenes Ltd. Plot No. R- 802 TTC, Industrial Area, Thane Belapur Road, MHAPE, Navi Mumbai- 400 701 ...Appellant Versus

Securities and Exchange Board of India, SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 ...Respondent 3

Mr. Anant Upadhyay, Advocate for the Appellant.

Mr. Anubhav Ghosh, Advocate with Ms. Vidhi Jhawar, Advocate i/b The Law Point for the Respondent.

WITH Appeal No. 318 of 2018

New Era Advisors Pvt. Ltd. Plot No. R- 802 TTC, Industrial Area, Thane Belapur Road, MHAPE, Navi Mumbai- 400 701 ...Appellant

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. Anant Upadhyay, Advocate for the Appellant.

Mr. Anubhav Ghosh, Advocate with Ms. Vidhi Jhawar, Advocate i/b The Law Point for the Respondent.

AND Appeal No. 325 of 2018

Maharashtra Polybutenes Ltd. Plot No. R- 802 TTC, Industrial Area, Thane Belapur Road, MHAPE, Navi Mumbai- 400 701 ...Appellant

Versus

Securities and Exchange Board of India, SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 ...Respondent 4

Mr. Anant Upadhyay, Advocate for the Appellant.

Mr. Anubhav Ghosh, Advocate with Ms. Vidhi Jhawar, Advocate i/b The Law Point for the Respondent.

CORAM: Justice Tarun Agarwala, Presiding Officer Dr. C.K.G. Nair, Member Justice M. T. Joshi, Judicial Member

Per: Justice Tarun Agarwala

1.

The controversy involved in this group of appeals is the

same and arises out of the same issue. Even though, separate

impugned orders have been passed, these appeals are being

decided together.

2. Appeal No. 319 of 2018, 332 of 2018 and 330 of 2018

have been filed against the order of the Adjudicating Officer

("AO" for convenience) of the Securities and Exchange Board

of India ("SEBI" for convenience) for violating 15H read with

Section 27 of the SEBI Act, 1992 and Regulations 3 and 4 of

the Securities and Exchange Board of India (Prohibition of

Fraudulent and Unfair Trade Practices relating to Securities

Market) Regulations, 2003 ("PFUTP" Regulations, 2003" for

convenience) for wrongful trading in the shares of Maharashtra

Polybutenes Limited (hereinafter referred to as "MPL") wherein

a penalty was imposed. In Appeal No. 331 of 2018 the AO of 5

SEBI has imposed a penalty for violating Section 12 of the

SEBI Act, 1992 read with Regulations 3 and 4 of the PFUTP

Regulations, 2003 for wrongful disclosure in the change in the

shareholding pattern in MPL and wrongful disclosure of

pledging of shares by the promoters.

3. In Appeal No. 319 of 2018 there is a delay of 985 days in

filing the appeal. In Appeal No. 332 of 2018 there is a delay of

880 days. In Appeal No. 330 of 2018 there is a delay of 353

days and in Appeal No. 331 of 2018 there is delay of 353 days

in filing the appeal.

4. In Appeal No. 319 of 2018 and Appeal No. 332 of 2018

the ground urged is that the appellants were exploring the

implications of the impugned order and possibilities of

challenging it. Further, the appellants were awaiting the

outcome of the adjudication proceedings of the company MPL

and in the said process of filing the present appeals, the

appellants consulted experts and advisors who could assist them

without fee which took time. On these grounds the appellants

have prayed that the delay in filing the appeals may be

condoned.

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5. In Appeal No. 330 of 2018 and 331 of 2018 the ground

urged is virtually the same, namely, that after receiving the

impugned order the appellants were exploring the implications

of the impugned order and possibilities of challenging it and

consulted expert and advisors who could assist without fee

which took time. Further, the appellants were unable to arrange

the court fee in the light of the adverse financial conditions

faced by the appellants which also led to further delay in filing

the appeals. The appellants in these two appeals prayed that the

delay should be condoned.

6. The aforesaid applications have been vehemently opposed

by the learned counsel for the respondent contending that no

sufficient cause has been shown to condone the delay nor any

adequate or legal reasons have been given in support of their

contentions. The learned counsel for the respondent had relied

upon a decision of Balwant Singh (Dead) V/s Jagdish Singh

and Others (2010) 8 Supreme Court Cases 685.

7. Having heard the learned counsel for the parties at some

length, we find that there is an inordinate delay in filing the

appeals. The contention of the appellants in Appeal Nos. 319 of

2018 and 332 of 2018 that they were awaiting the outcome in 7

the appeals by the company MPL is patently misconceived and

cannot be utilized for the purposes of condoning the delay. The

appeal is required to be filed within 45 days. Such limitation

was known to the appellants and, therefore, waiting for the

outcome of another adjudication proceedings cannot be a

cogent, valid or legal ground to condone the delay nor does such

ground could come under expression "sufficient cause".

8. Further, the contention of all the appellants that after

receiving the impugned orders the appellants were exploring the

implications of the impugned order and possibilities of

challenging it and consulted experts and advisors who could

assist them without fee is not only vague but clearly an

afterthought. No details have been given as to which expert the

appellants had consulted, which expert was demanding

remuneration or legal fee and which consultant or expert agreed

to give advice without taking a fee. In the absence of any such

assertion, we are of the opinion that the ground urged is vague

and untenable. In our view sufficient cause has not been shown

nor any satisfactory or reasonable explanation has been given

for condoning of delay.

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9. There is no doubt that the expression of "sufficient cause"

is intended to advance substantial justice which itself

presupposes no negligence or inaction on the part of the

appellant. In the instant case, waiting for the outcome of a

proceeding in another adjudication matter or exploring the

possibilities of challenging the impugned orders without giving

satisfactory explanations tantamounts to negligence or inaction

on the part of the appellants and, therefore, such ground cannot

be termed as bonafide. The Supreme Court in Balwant Singh

(Supra) has held that the expression "sufficient cause" implies

the presence of adequate and legal reasons which in the instant

case is lacking. We find that sufficient cause has not been

shown for condoning the delay which is just one of the

ingredients which has to be considered by the Court/ Tribunal.

In addition to this, we find that the conduct of the appellants and

the reasons given for condoning the delay was not bonafide.

The delay could have been avoided if the appellant had acted

with normal care and caution. In our view, the statutory

provisions mandate that applications for condonation of delay

filed beyond the prescribed period of limitation should be

rejected unless sufficient cause is shown for condonation of

delay which in the instant cases was neither bonafide nor

adequate.

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10. Consequently, for the reasons stated aforesaid, we do not

find any reasons to condone the inordinate delay in filing the

appeals. The Miscellaneous Applications are rejected, as a

result of which, the appeals are dismissed.

11. Appeal No. 318 of 2018 and 325 of 2018 have been filed

challenging the Recovery Certificates. These Recovery

Certificates were issued for non-payment of the amount

mentioned in the impugned orders passed by the AO. Since the

appeals questioning the main orders have been dismissed by us

on the ground of delay the appeals challenging the Recovery

Certificates lack merit and are also dismissed. In the

circumstances of the case, party shall bear their own costs.

Sd/-

Justice Tarun Agarwala Presiding Officer

Sd/-

Dr. C.K.G. Nair Member

Sd/-

Justice M. T. Joshi Judicial Member 26.04.2019 Prepared & Compared By: PK