Pacl Ltd. & Ors. vs Sebi

DATE : 27.10.2016

Appeal No. 467 of 2015

1.

PACL Ltd.

22, 3rd Floor, Amber Tower, Sansar Chand Road, Jaipur - 302004. Rajsthan.

2. Mr. Tarlochan Singh 7th Floor, Gopal Das Bhavan, 28, Barakhamba Road, New Delhi - 110001.

3. Mr. Sukhdev Singh 7th Floor, Gopal Das Bhavan, 28, Barakhamba Road, New Delhi - 110001.

4. Mr. Gurmeet Singh 7th Floor, Gopal Das Bhavan, 28, Barakhamba Road, New Delhi - 110001.

5. Mr. Subrata Bhattacharya 7th Floor, Gopal Das Bhavan, 28, Barakhamba Road, New Delhi - 110001. ..... 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

With Appeal No. 491 of 2015

Gurmeet Singh 22, 3rd Floor, Amber Tower, Sansar Chand Road, Jaipur - 302004.

Rajsthan. ..... 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 2

With Appeal No. 492 of 2015

Subrata Bhattacharya 22, 3rd Floor, Amber Tower, Sansar Chand Road, Jaipur - 302004.

Rajsthan. ..... 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. Sameer Rohatgi, Advocate with Mr. Mitesh Naik, Advocate i/b Dhru & Co. for the Appellants in Appeal No. 467 of 2015.

Mr. Abhishek Amritanshu, Advocate with Mr. Amit Pawan, Advocate for the Appellant in Appeal Nos. 491 and 492 of 2015.

Mr. Shyam Mehta, Senior Advocate with Mr. Mihir Mody, Mr. Saurabh Bachhawat, Mr. Vivek Rana, Advocates i/b K. Ashar & Co. for the Respondent.

CORAM : Justice J. P. Devadhar, Presiding Officer Jog Singh, Member Dr. C. K. G. Nair, Member

Per : Justice J. P. Devadhar (Oral)

1. In all these three appeals appellants have challenged the order

passed by the Adjudicating Officer ("A.O." for short) of SEBI on

September 22, 2015. By the said order penalties have been imposed on

the appellants under Section 15HA.

2. Basic argument of the counsel for the appellants is that assuming

that the appellants had committed fraudulent and unfair trade practices,

then penalty under Section 15HA of SEBI Act that could be imposed on

the appellants was ` 25 crore or three times the amount of profits made

out of such practices, whichever is higher. It is submitted that in the 3 present case, without computing the profit, if any, the A.O. has imposed

penalty on the appellants which is bad in law.

3. We see merit in the above argument. Even if the A.O. considers the

appellants to be highly unscrupulous and that the appellants have indulged

in fraudulent and unfair trade practices, it was obligatory on part of A.O.

to determine the quantum of profits made in such practice and thereafter

proceed to impose penalty under Section 15HA of SEBI Act.

4. In view of the above, counsel for SEBI fairly stated that SEBI is

willing to reconsider the matter afresh.

5. Accordingly, the impugned orders are set aside and SEBI is directed

to pass fresh order on merits and in accordance with law.

6. All the contentions of both parties are kept open.

7. All the appeals are disposed of in the above terms with no order as

to costs.

Sd/-

Justice J. P. Devadhar Presiding Officer

Sd/-

Jog Singh Member

Sd/-

Dr. C. K. G. Nair Member 27.10.2016 Prepared & Compared by PTM