Mr. Krishna Shriram vs Sebi
- CitationAppeal No. 168 of 2025
Ratio decidendi
The rule this decision rests on
The order does contain reasoning on two points, both interim, and the court expressly leaves the statutory question open. First, a proceeding for disgorgement initiated against a person who has died before the show cause notice issues is conducted against a dead person, and so the proceeding is vitiated; an order passed in such a proceeding is open to interim stay pending adjudication. Second, where the statutory question whether Section 28B(2b) permits continuation of such proceedings against a legal representative is contested and left undecided, the prima facie position that the proceedings were conducted against a deceased person is sufficient to warrant staying the operation of the disgorgement order pending final determination, without requiring any deposit from the appellant.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date: 04.04.2025
Appeal No. 168 of 2025 [Along with Misc. Application Nos. 415 and 416 of 2025]
Mr. Krishna Shriram ...Appellant
Versus
Securities and Exchange Board of India ...Respondent
Mr. Darius Khambata, Senior Advocate with Mr. Abhishek Venkatraman, Ms. Urvashi Misra, Ms. Ambareen Mujawar, Mr. Arnab Ray and Mr. Suneel Kumar, Advocates i/b AZB & Partners for the Appellant.
Mr. Shiraz Rustomjee, Senior Advocate with Mr. Manish Chhangani, Mr. Prateek Pai, Ms. Smriti Singh, Mr. Sumit Yadav, Mr. Abhay Chauhan and Mr. Atul Agrawal, Advocates i/b The Law Point for the Respondent-SEBI.
ORDER:
Misc. Application No. 416 of 2025 for urgency has
worked for itself and it is accordingly disposed of.
2. Admit.
3. Learned senior advocate for the respondent seeks time to
file reply. As prayed for, four weeks time is granted to the
respondent to file reply. Two weeks thereafter to the appellant
to file rejoinder.
2
4. Shri Darius Khambata, learned senior advocate for the
appellant submitted that the appellant's father Siddharth
Shriram passed away in 2021 and the show cause notice was
issued in 2023 in respect of alleged trades of October-November
2017. An order of disgorgement has been passed against the
appellant and prays that the interim order staying the
disgorgement be passed.
5. Shri Shiraz Rustomjee, learned senior advocate for the
SEBI adverting to Section 28B(2b) submitted that the
proceedings for the disgorgement, refund which could have
been initiated against the deceased if he had survived, may be
initiated against the legal representative and all the provisions of
this Act shall apply accordingly. Therefore the appellant is
liable for disgorgement. The appellant may be put on terms to
deposit a portion of the disgorgement amount while granting an
interim order.
6. Undisputed facts are, appellant passed away in the year
2021 and the show cause notice was issued in 2023. Thus, the
proceedings have been conducted against dead person.
Therefore, keeping open the legal contentions with regard to
Section 28B(2b) in our opinion, the appellant deserves the 3
interim order. Hence the order directing disgorgement shall
remain stayed.
7. Call on July 07, 2025.
Justice P. S. Dinesh Kumar Presiding Officer
Ms. Meera Swarup Technical Member
Dr. Dheeraj Bhatnagar PRERNA Digitally signed by PRERNA MANISH Technical Member 04.04.2025 MANISH KHARE Date: 2025.04.08 KHARE PK 15:56:27 +05'30'
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