Ms. Sangeeta Sethia & Anr. vs Sebi

Date of Decision: 21.05.2019

Misc. Application No. 253 of 2019 And Appeal No. 194 of 2019

1.

Ms. Sangeeta Sethia 201, Mayfair Garden, Road No. 12, Banjara Hills, Hyderabad, Telangana-500 034

2. Mr. Prabhat Sethia Plot No. 111, H. No. 8-3-1100, Flat No. 503, Jyothi Splendour Srinagar Colony, Hyderabad, Telangana- 500 073 ...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. Nimay Dave, Advocate with Ms. Aparna Wagle and Mr. Yash Garach, Advocates i/b Alliance Law for Appellants.

Mr. Abhiraj Arora, Advocate with Mr. Vivek Shah and Ms. Misbah Dada, Advocates i/b ELP 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) 2

Misc. Application No. 253 of 2019

The application for exemption to file the certified copy of

the impugned order has become infructuous, as in the

meanwhile the certified copy of the impugned order has been

filed by the appellants. The Misc. Application No. 253 of 2019

is accordingly dismissed as infructuous.

Appeal No. 194 of 2019

1. On April 04, 2013 the Whole Time Member ("WTM" for

short) of the Securities and Exchange Board of India ("SEBI"

for short) passed an order directing the appellants to make a

public announcement under the Securities and Exchange Board

of India (Substantial Acquisition of Shares and Takeovers)

Regulations, 1997 ("Takeover Regulations, 1997" for short) as

they have violated Regulation 11 of the Takeover Regulations,

1997. The said order was challenged by the appellants before

this Tribunal which was dismissed by an order dated May 05,

2014. The appellants thereafter approached the Supreme Court

which was withdrawn and thereafter a Review Application was

filed before this Tribunal which was again dismissed on

September, 29, 2015. The order of the WTM of SEBI for public

announcement as affirmed by this Tribunal has not as yet been

complied with till date. The Adjudicating Officer ("AO" for 3

short) accordingly initiated proceedings for alleged violations of

the SEBI Laws passed an order dated January 30, 2019

imposing a penalty of ` 2 crores for not making the public

announcement under Regulation 11(1) of the Takeover

Regulations, 1997. The appellants being aggrieved by the order

of the AO of SEBI have filed the present appeal.

2. The contention of the learned counsel for the appellants is

that the impugned order was passed ex-parte without giving an

opportunity of hearing. It was contended that the AO had

issued a notice on January 08, 2019 fixing January 24, 2019 as

the date of hearing which notice was received by the appellants

on January 30, 2019 and accordingly the appellants issued an

email on the same date requesting the AO of SEBI to fix any

other date for hearing. The said request was rejected by the AO

of SEBI on the ground that the impugned order had already

been passed prior to the receipt of the email.

3. The learned counsel for the appellants contended that the

appellants were travelling and were not in town between

January 21, 2019 to January 29, 2019 and accordingly, came to

know of the date fixed for hearing only when they returned back

and joined the office on January 30, 2019. 4

4. The submission of the learned counsel for the appellants

though attractive in the first blush but on a closer scrutiny, we

find it to be an afterthought and therefore untenable. We find

from the impugned order that the notice fixing January 24, 2019

as the date for hearing was duly served in the office of the

appellants on January 18, 2019. No explanation has been given

as to why the appellants could not respond to it on January 18,

2019 or immediately thereafter prior to travelling as alleged by

the appellants from January 21, 2019. In our opinion, notice

was duly served upon the appellants. The appellants failed to

appear before the AO of SEBI and consequently no relief can be

granted. We are further of the opinion that the past conduct of

the appellants further disentitles for any relief. We do not find

any merit in the contentions raised and the appeal is dismissed

in limine at the admission stage itself.

Sd/-

Justice Tarun Agarwala Presiding Officer

Sd/-

Dr. C.K.G. Nair Member

Sd/-

Justice M. T. Joshi Judicial Member 21.05.2019 Prepared & Compared By: PK