Mr. Punaji Tanaji Raut vs Sebi

Date of Decision : 23.04.2019

Misc. Application No. 391 of 2018 And Appeal No. 442 of 2018

Mr. Punaji Tanaji Raut Jai Bhavani Janhit Seva Sangh, MS Patil Wadi, Shiv Shankar Chawl, Behind Brahmandev Mandir, Ghatla, Chembur (East), Mumbai - 400 071. ...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. Rupesh Bhalshankar, Advocate for the Appellant.

Mr. Kaushal Parsekar, Advocate i/b Legasis Partners 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 (Oral)

1.

The present appeal has been filed against the order of the

Adjudicating Officer of Securities and Exchange Board of India

('SEBI' for short) dated September 30, 2008 imposing a penalty

for violation of Regulation 4 of the SEBI (Prohibition of 2

Fraudulent and Unfair Trade Practices) Regulations, 2003

('PFUTP Regulations' for short). The present appeal was filed

on November 5, 2018 along with an application for condoning a

delay of 10 years and 5 days. The ground urged in the

application for condoning the delay is, that the appellant was not

aware of the impugned order as he was never served with a

copy of the impugned order. Further, he had no legal knowledge

about filing of the appeal within 45 days from the date of the

impugned order.

2. The application has been vehemently opposed by the

learned counsel for the respondent contending that no legal or

adequate reasons have been given for condoning the delay and

that the grounds for condoning the delay is not bonafide and is

an afterthought.

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

length we find that there is an inordinate delay of more than 10

years in filing the present appeal. By no stretch of imagination

we find that the appellant was pursuing the matter diligently.

The contention that the appellant was not aware of the

impugned order dated September 30, 2008 is patently

misconceived and incorrect. We find that when the penalty

amount pursuant to the adjudication order was not paid by the 3

appellant the respondent initiated prosecution proceedings

before the SEBI Special Court under the Securities and

Exchange Board of India Act, 1992 being SEBI Special Case

No. 2 of 2013 (Old C.C. No. 07-SW-2011). In this prosecution

case one of the documents relied by SEBI was the adjudication

order dated September 30, 2008 which was Exhibit - 11. In

these proceedings the appellant appeared and contested and the

defence taken before the SEBI Special Court was that parallel

adjudication proceedings were going on against KNC Shares

and Securities Pvt. Ltd. and the adjudication order passed by

SEBI was set aside by the Tribunal and therefore the amount of

penalty was not payable. Insofar as the impugned order against

the appellant is concerned the appellant contended before the

SEBI Special Court that the enquiry as per Rule 6 of SEBI

(Procedure for Holding Inquiry and Imposing Penalties by

Adjudicating Officers) Rules, 1995 was not properly held by the

Adjudicating Officer and therefore the amount was not payable

as per the impugned order.

4. In the light of the assertion made by the appellant in the

prosecution proceedings initiated by SEBI before the SEBI

Special Court it is clear that the appellant was aware of the

impugned order dated September 30, 2008 since long and

consequently the contention that the appellant was not aware of 4

the impugned order or he was not served with the impugned

order cannot be believed.

5. In our opinion, no sufficient cause exists to condone the

inordinate delay. In Balwant Singh (Dead) vs Jagdish Singh &

Ors.[(2010) 8 SCC 685] the Supreme Court explained that the

expression 'sufficient cause' means the presence of legal and

adequate reasons. In the instant case we find that there are no

legal and adequate reasons. The ground mentioned in the

application is not boanfide but an afterthought.

6. In the light of the inordinate delay in filing the appeal and

in the absence of legal and adequate reasons, the application for

condonation of delay is rejected, as a result, the appeal is also

dismissed.

Sd/-

Justice Tarun Agarwala Presiding Officer

Sd/-

Dr. C.K.G. Nair Member

Sd/-

Justice M.T. Joshi Judicial Member 23.04.2019 Prepared and compared by:msb