Malvinder Mohan Singh & Anr. vs Sebi

Date of Decision:7.1.2021

Appeal No.307 of 2019

1.

Malvinder Mohan Singh 26, Maulsari Avenue, Westend Greens, Rajokri, New Delhi - 110 038.

2. Malvan Holding Pvt. Ltd.

G-16, Marina Arcade, Connaught Circus, New Delhi - 110017. ...Appellants

Versus

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

Mr. Amit Agrawal, Advocate with Mr. Sumit Agrawal, Ms. Sita Kapadia, Mr. Shashwat Rai, Ms. G.S. Sreenidhi and Mr. Mohit Das, Advocates i/b. Keystone Partners for the Appellant.

Mr. Abhiraj Arora, Advocate i/b. ELP for the Respondent.

2

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

Per : Justice Tarun Agarwala, Presiding Officer (Oral)

1. The present appeal has been filed against the ex-

parte order dated 17th October, 2018 passed by the

Whole Time Member ('WTM' for short) which was

modified on 21st December, 2018 and, subsequently,

confirmed on 19th March, 2019. By the said order a

number of directions were issued and s some of them

were that the appellant was restrained from accessing

the securities market and from dealing either directly

or indirectly in the securities market.

2. It has been stated that one of the parties Religare

Finvest Ltd. filed an appeal against the directions

issued by the WTM which was allowed by an order

dated 29th January, 2020.

3. It was contended that confirmatory order was passed

without considering the submissions of the appellant

and without considering the necessary documents. In 3

this regard the appellant has placed reliance on para 24

of the reply of SEBI which is extracted hereunder:

"24. With reference to paragraph 7.14 of the present Appeal, the veracity/genuineness of the contents of the same is denied. It is reiterated that in the SEBI letter dated 15th January, 2019, the Appellants were intimated that in the event that a representation was not made on 30th January, 2019 "it will be presumed that you do not have any further submissions to make in the matter and the matter shall be further proceeded with, including passing of appropriate directions on the basis of the material available on record". At the hearing of 30th January, 2019, the authorized representatives of the Appellants (including Associates of Keystone Partners) did not provide any reply/submissions to the ad interim order, but merely repeated the request for cross examination and further inspection of documents. During the course of personal hearing, in which the undersigned was also present, the WTM had explained to the Appellants' representatives that their request for a full-fledged inspection of documents and cross examination could not be acceded to as the matter was only at an interim stage. As the documents such as Forensic Audit Report and extracts of Preliminary Examination were already provided to Appellants, it was explained as to why other documents such as Bank Statements, written submissions of other entities, ledger accounts etc. cannot be given, mainly on the ground that investigation is pending and that the Bank statements contains information of third parties. It was also assured that the request for inspection/cross-examination of relevant persons, would be considered only after completion of 4

investigation, culminating in the issuance of a Show Cause Notice. The WTM accordingly, directed the Appellants to file a reply on merits within 2 weeks, which was readily undertaken by the representatives of the Appellants. However, the Appellants failed to avail this opportunity and reiterated their request for inspection by their 'Preliminary Reply' dated 11th February 2019 to the ad interim order. It is submitted that the denial of documents and cross examination is a ruse set up by the Appellants to protract the proceedings and divert the focus of adjudication from the main issues."

4. From the aforesaid it is apparently clear that the

WTM did not find it appropriate to provide the

relevant information and accede to the request of the

appellant at the interim stage and contented that the

same would be supplied after the submission of the

forensic report and the issuance of the show cause

notice.

5. We have been informed that the forensic report has

been submitted pursuant to which a show cause notice

has been issued.

6. In the light of the aforesaid, without going into the

merits of the ex-parte ad-interim order as confirmed by 5

the order dated 19th March, 2019 we dispose of the

appeal directing the appellant to file a reply to the

show cause notice. It would also be open to the

appellant to file an application forinspection,

production and supply of various documents such as

bank account statement, ledger account etc. It will also

be open to the appellant to apply for cross examination

of any witness, if required. If such an application is

filed the same shall be dealt with in accordance with

law by the WTM. The appeal is accordingly disposed

of with no order as to costs.

7. 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

on the digitally signed copy of this order. Parties will 6

act on production of a digitally signed copy sent by fax

and/or email.

Justice Tarun Agarwala RAJALAKS Digitally signed by RAJALAKSHMI H Presiding Officer HMI H NAIR Date: 2021.01.08 NAIR 22:17:50 +05'30'

Dr. C.K.G. Nair Member

Justice M.T. Joshi Judicial Member

7.1.2021 RHN