Prakash Ganpat Utekar vs Sebi

IN THE SECURITIES APPELLATE TRIBUNAL AT MUMBAI DATED THIS THE 15TH DAY OF JUNE, 2026 CORAM: Justice P.S. Dinesh Kumar, Presiding Officer Ms. Meera Swarup, Technical Member Dr. Dheeraj Bhatnagar, Technical Member Appeal No.371 of 2025 [Along with Misc. Application Nos.869 and 870 of 2025] Prakash Ganpat Utekar 8/801, Gandhar Tower, Khed Galli, Near Utkarshya Building, Prabhadevi, Mumbai - 400 025. ...Appellant (By Mr. Aansh Desai, Advocate i/b. Pythagoras Legal for the Appellant.) Securities and Exchange Board of India SEBI Bhavan, Plot No.C-4A, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051. ...Respondent (By Ms. Gulnar Mistry, Advocate with Mr. Bhushan Shah and Mr. Abhishek Nair, Advocates i/b. Mansukhlal Hiralal & Co. for the Respondent.) With Appeal No.372 of 2025 [Along with Misc. Application No.871 and 872 of 2025] Venkatraman Natarajan 2 1001/1002, Mount Everest, A Wing, 10th Floor, Bhakti Park Near I Max Cinema, ...Appellant Wadala (E), Mumbai - 400037. (By Mr. Aansh Desai, Advocate i/b Pythagoras Legal for the Appellant.) Securities and Exchange Board of India SEBI Bhavan, Plot No.C-4A, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051. ...Respondent (By Ms. Gulnar Mistry, Advocate with Mr. Bhushan Shah and Mr. Abhishek Nair, Advocates i/b.

Mansukhlal Hiralal & Co. for the Respondent.) With Appeal No.374 of 2025 [Along with Misc. Application No.942 of 2025] Omprakash Basantlal Goenka 101, 10th Floor, Somerset House, Sophia College Lane, Warden Road, Mumbai - 400026. ...Appellant (By Mr. Vinay Chauhan, Advocate with Mr. Aansh Desai, Advocate i/b. Pythagoras Legal for the Appellant.) Securities and Exchange Board of India SEBI Bhavan, Plot No.C-4A, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051. ...Respondent 3 (By Ms. Gulnar Mistry, Advocate with Mr. Bhushan Shah and Mr. Abhishek Nair, Advocates i/b. Mansukhlal Hiralal & Co. for the Respondent.) THESE APPEALS ARE FILED UNDER SECTION 15T OF THE SEBI ACT TO SET ASIDE THE ORDER DATED DECEMBER 28, 2018 PASSED BY THE AO, SEBI. THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR ORDERS ON APRIL 9, 2026 COMING ON FOR PRONOUNCEMENT OF ORDER THIS DAY, THE TRIBUNAL MADE THE FOLLOWING: ORDER Per: Justice P. S. Dinesh Kumar, Presiding Officer These three appeals are directed against order dated December 28, 2018, passed by the AO 1, SEBI2 imposing a penalty of ₹50 Lakhs on the appellants and other Noticees payable jointly/severely for non-compliance with SEBI's directions contained in its ex parte ad interim order3 and the confirmatory order4 passed by the WTM5.

2. Appeal No.371 of 2025 is filed by Noticee No.3, Prakash Ganpat Utekar; Appeal No.372 of 2025 is by Noticee No.4, 1 Adjudicating Officer 2 Securities and Exchange Board of India 3 dated June 03, 2015 4 dated August 24, 2015 5 Whole Time Member 4 Venkataraman Natarajan; Appeal No.374 of 2025 is by Noticee No.2, Omprakash Basantlal Goenka. 3. We have heard Mr. Vinay Chauhan and Mr. Aansh Desai, learned Advocates for the appellants and Ms. Gulnar Mistry, learned Advocate for the SEBI. 4. Brief facts of the case are: 5. Appellants' are Noticee Nos.2 to 4. Omprakash Basantlal Goenka10 ('Omprakash' for short) is Noticee No.2, Prakash Ganpat Utekar11 ('Prakash' for short) is Noticee No.3 and Venkatraman Natarajan12 ('Venkatraman' for short) is Noticee No.4. Their case is, they were not aware of the SCN and the impugned order as they were in Central Jail, Nashik. The SCN 7 dated 03.06.2015 and 24.08.2015 8 Corporate Insolvency Resolution Process 9 Insolvency Resolution Professional 10 Appellant in Appeal No.374 of 2025 11 Appellant in Appeal No.371 of 2025 12 Appellant in Appeal No.372 of 2025 6 was served at the Company's address which was not accessible to the appellants after appointment of IRP.

The hearing notices were sent to the email ids which were under the IRP's control. On December 14, 2024, appellants received the demand notice13 and later, in the same month received the attachment notice. The appellants came to know about the SCN and impugned order only after receipt of the demand notice and the attachment notices. In substance, they have contended that the SCN, hearing notices and the impugned order were not served upon them and therefore, the impugned order is in violation of principles of natural justice. 6. Mr. Vinay Chauhan and Mr. Aansh Desai, learned Advocates for the appellants submitted that: 7. In reply, Ms. Gulnar Mistry, learned Advocate for the SEBI submitted that: 8. We have carefully considered the rival contentions and perused the records. 9. Admitted position is, appellants have filed these appeals challenging the ex parte order. Their principal grievance is that the impugned order is in violation of principles of natural justice. 10. The mode of service is prescribed in SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995. It has been amended on December 31, 2021. Admittedly, these cases are of the period prior to the amendment.

The main ground urged by the learned Advocates 12 for the appellants is that there is violation of Rule 7(a) of the Rules. The said Rule reads thus: (Emphasis Supplied) 11. SEBI's stand is that the service can be effected in the alternative modes as per the amended provision and the amendment is only clarificatory in nature. 12. This Tribunal has considered the similar issue in Uma Karthikeyan v. SEBI19 and held as follows: (Emphasis Supplied) 13. The above judgment has remained unchallenged and binding on SEBI. Therefore, in our considered view, the impugned order suffers from violation of principles of natural justice. 14. In the result, these appeals merit consideration. Hence, the following: 15.06.2026 KSHMI RAJALAKSHMI NAIR H Date: 2026.06.15 RHN H NAIR 15:51:57 +05'30'