N. Krishnan Nair In The Matter Of G. ... vs Sebi

Date of Decision : 07.08.2020

Misc. Application No. 208 of 2020 In Appeal No. 5 of 2018

N. Krishnan Nair Vadakkekara House, Vazhottukonam Vattiyoorkavu .... Applicant Trivandrum - 695013. (Org. Appellant No. 2)

Versus

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

In the matter of

1.

G. Unnikrishnan Nair Chattanoorpuzha Adoor, Pathanamthitta Dist., Kerala.

2. N. Krishnan Nair Vadakkekara House, Vazhottukonam Vattiyoorkavu, Trivandrum- 695 013.

3. Komala Unnikrishnan Mullasseriyil House Churakode P.O. 2

Chattanoorpuzha Adoor, Pathanamthitta, Dist., Kerala.

4. G. Suresh Kumar X/137 Varenickal, Mavelikkara- 690 107, Alappuzha Dist., Kerala.

5. P. Parameswaran 242, New Lawyers‟ Chambers, Supreme Court of India, New Delhi- 110 001. ....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. G. Raghavan, FCA with Ms. Revathy Raghavan, Advocate i/b Ms. Revathy Raghavan for the Applicant.

Mr. Mustafa Doctor, Senior Advocate with Mr. Mihir Mody, Mr. Shehaab Roshan, Advocates i/b K. Ashar & Co. for the Respondent.

CORAM : Justice Tarun Agarwala, Presiding Officer Justice M. T. Joshi, Judicial Member 3

Per : Justice Tarun Agarwala, Presiding Officer (Oral)

1. By an order of Securities and Exchange Board of India

(hereinafter referred to as „SEBI‟) dated August 10, 2017 the

appellant and its directors were directed to refund the money jointly

and severally collected through NCDs alongwith interest at the rate

of 15 % p.a

2. The appellant, being aggrieved, filed Appeal No. 262 of

2017 before this Tribunal which was dismissed for want of

prosecution by an order dated May 20, 2019. Now, an application

dated July 20, 2020 has been filed for restoration of the appeal and

for recall of the order dated May 20, 2019.

3. We have heard Mr. G. Raghavan, FCA with Ms. Revathy

Raghavan, the learned counsel for the applicant and Mr. Mustafa

Doctor, the learned senior counsel with Mr. Mihir Mody,

Mr. Shehaab Roshan, the learned counsel for the Respondent. 4

4. The contention of the learned counsel for the applicant is,

that he could not attend the day to day affairs of the office due of

disturbance from the customers from the various branches. In

December 2018, the applicant was arrested by the Ernakulum Police

but subsequently was enlarged on bail on January 1, 2019. He was

again arrested in January 2019 and was granted bail four days later.

It was contended that on account of various cases and FIR‟s filed

against the applicant and continuous harassment from the investors

and recovery proceedings and attachment of bank accounts by SEBI

that he left his place of residence and went underground.

Accordingly, he did not come to know about the dismissal of the

appeal on May 20, 2019. It is further alleged that the applicant came

to know about the dismissal of the appeal in July/August 2019

through ex-employees of the company and thereafter the present

application for restoration was filed on July 20, 2020.

5. On these facts, the learned counsel for the applicant contended

that there was a bonafide and genuine reasons for not filing the

restoration application within the stipulated period and, therefore, the 5

delay in filing the restoration application may be condoned and the

appeal may be restored to its original number.

6. Having heard the learned counsel for the parties, we are of the

opinion that there is an inordinate delay in filing the present

application. Admittedly, when the appeal was dismissed, the

applicant was not under any kind of detention and was enlarged on

bail. Assuming without admitting that the applicant was not aware of

the dismissal of the appeal, nonetheless, on his own showing, the

applicant came to know about the dismissal of the appeal in

July/August 2019. No steps whatsoever was taken by the applicant

to file a restoration application and, eventually the application was

filed after 11 months. This delay has not been explained. The

contention that the applicant went underground since he was being

harassed by the investors is neither a cogent or a legal ground nor

sufficient cause has been shown. We are of the opinion that no valid

or bonafide explanation has been given by the applicant as to why he

could not prefer the restoration application earlier. In the absence of

any plausible explanation, we are of the opinion that the applicant 6

has not shown any sufficient cause for condoning the delay. The

application is not bonafide nor has been filed in good faith.

7. In Basawaraj and Anr. vs. Special Land Acquisition Officer,

[(2013) 14 SCC 81] the Supreme Court held that the discretion to

condone the delay has to be exercised judicially based on facts and

circumstances of each case and that sufficient cause cannot be given

a liberal interpretation if lack of bonafide is attributed to a party. The

Supreme Court further held that delay cannot be condoned on

equitable ground beyond the limits permitted expressly by statute.

8. The Supreme Court in Ram Nath Sao and Ors vs

Gobardhan Sao and Ors, (2002) 3 SCC 195. held that the

expression "sufficient cause" should receive a liberal construction so

as to advance substantial justice when no negligence or inaction or

want of bonafide is imputable to a party. The same view was

reiterated by the Supreme Court in Madanlal vs. Shyamlal, [(2002) 1

SCC 535].

7

9. In Balwant Singh (Dead) vs Jagdish Singh & Ors, [(2010) 8

SCC 685] Supreme Court held that the expression "sufficient cause"

means the presence of legal and adequate reasons.

10. This Tribunal is possessed with the exercise of judicial

discretion in condoning the delay if sufficient or adequate reason is

given. It is also a settled proposition of law that the law of limitation

may harshly affect a particular party but it has to be applied with all

its rigour when the statute so prescribes. The court has no power to

extend the period of limitation on equitable grounds as held by the

Supreme Court in Basawaraj and Anr. (supra). In the instant case

we do find any legal or adequate reasons to condone the delay.

11. For the reasons stated aforesaid, we do not find any merit in

the restoration application and is dismissed without any order on

costs.

12. 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 8

signed by the Presiding Officer on behalf of the bench and all

concerned parties are directed to act on the digitally signed copy of

this order. Parties will act on production of a digitally signed copy

sent by fax and/or email.

TARUN Digitally signed by TARUN AGARWAL DN: c=IN, o=PUBLIC WORKS DEPARTMENT UTTAR PRADESH, postalCode=221505, st=Uttar Pradesh, 2.5.4.20=30fcf68685192bbc53e6ff1608a83fb3881de7ac2ab7954d5 Justice Tarun Agarwala AGARWAL 09c85ed6e0f7c41, serialNumber=095f8b286bb0b1cd07ff676611f4f5e7999727d404aa 38ca422f9d3529bdb8a3, cn=TARUN AGARWAL Date: 2020.08.07 21:39:02 +05'30' Presiding Officer

Justice M. T. Joshi Judicial Member 07.08.2020 PTM