Mr. Asit C. Mehta & Ors. vs Sebi

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date of Decision: 21.03.2016

Appeal No. 490 of 2015

1.

Mr. Asit C. Mehta 17A, Abhilasha Building, August Kranti Marg, Mumbai- 400 036

2. Mrs. Deena Mehta C/o. Nucleus House, Saki Vihar Road, Andheri (East), Mumbai- 400 072

3. Asit C. Mehta Forex Private Limited Nucleus House, Saki Vihar Road, Andheri (East), Mumbai- 400 072

4. Asit C. Mehta Commodity Services Private Limited Nucleus House, Saki Vihar Road, Andheri (East), Mumbai- 400 072

5. Aditya Asit Mehta C/o. Nucleus House, Saki Vihar Road, Andheri (East), Mumbai- 400 072

6. Gopa Jayesh Desai C/o. Nucleus House, Saki Vihar Road, Andheri (East), Mumbai- 400 072

7. Thakorbhai Nanubhai Desai C/o. Nucleus House, Saki Vihar Road, Andheri (East), Mumbai- 400 072

8. Rupa Atul Shah C/o. Nucleus House, Saki Vihar Road, Andheri (East), Mumbai- 400 072 2

9. Shobhnaben Thakorbhai Desai C/o. Nucleus House, Saki Vihar Road, Andheri (East), Mumbai- 400 072

10.Asit Chimanlal Mehta-HUF C/o. Nucleus House, Saki Vihar Road, Andheri (East), Mumbai- 400 072

11. Jayesh T. Desai-HUF C/o. Nucleus House, Saki Vihar Road, Andheri (East), Mumbai- 400 072 ...Appellants

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. Abishek Venkataraman, Advocate with Mr. Paras Parekh Mr. Dhaval Kothari, Advocates i/b J. Sagar Associates for Appellants.

Mr. Kumar Desai, Advocate with Mr. Tomu Francis, Advocate for the Respondent.

CORAM: Justice J.P. Devadhar, Presiding Officer Jog Singh, Member

Per: Justice J.P. Devadhar (Oral)

1. This appeal is filed to challenge the order passed by the

Adjudication Officer ("AO" for short) of Securities and Exchange Board

of India ("SEBI" for short) on September 29, 2015 whereby penalty of

` 25 lac is imposed on the appellants under Section 15 H(ii) of the

Securities and Exchange Board of India Act, 1992 ("SEBI Act" for

short).

3 2. Basic grievance of the appellants is that after the personal hearing

was over the appellants could not file the written submissions within the

specified time and as a result the impugned order is passed without

considering the written submissions of the appellants. It is submitted that

during the personal hearing as also in the written submissions the

appellant had stated that the SEBI Circular dated January 14, 2004 is

distinguishable on various grounds set out therein. However, in the

impugned order the AO of SEBI has not considered the arguments of the

appellants in relation to SEBI Circular dated January 14, 2004. In these

circumstances, in our opinion it would be just and proper to set aside the

impugned order and restore the matter to the file of AO of SEBI for

passing fresh order on merits and in accordance with law.

3. Apart from the above, the Apex Court in the case of SEBI vs.

Roofit Industries Ltd., reported in (2016) 194 Comp. Cas.186 (S.C.)

has held that while imposing penalty under Section 15H & 15HA the

AO, during the relevant period had no discretion to reduce the penalty.

By a subsequent order passed by another Bench of the Apex Court, the

decision in case of Roofit Industries Ltd. (supra) has been referred to a

larger Bench. Thus, whether in the facts of present case, the AO was

justified in applying the discretion and impose lower penalty also need

reconsideration.

4. Accordingly, for the aforesaid reasons, the impugned order dated

September 29, 2015 is quashed and set aside and the matter is restored to 4

the file of AO of SEBI for passing the fresh order on merits and in

accordance with law.

5. All contentions of both sides are kept open.

6. Appeal is disposed of in the above terms with no order as to costs.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Jog Singh Member 21.03.2016 Prepared & Compared By: PK