Prateek Vyas vs Sebi

Date of Decision : 25.07.2023

Appeal No. 628 of 2023

Prateek Vyas Proprietor of M/s. Big Life Capital Solutions 30-D, Sudama Nagar, Sector D (1-84), Indore, Madhya Pradesh - 452009. ......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. Abhishek Mishra, CS for the Appellant.

Mr. Vyom Shah, Advocate with Ms. Daksha Kasekar, Ms. Veena Hari, Advocates i/b Mansukhlal Hiralal & Co. for the Respondent.

CORAM : Justice Tarun Agarwala, Presiding Officer Ms. Meera Swarup, Technical Member

Per : Justice Tarun Agarwala, Presiding Officer (Oral)

1.

The appellant has challenged the order dated May 2, 2023

passed by the Whole Time Member (hereinafter referred to as

'WTM') of Securities and Exchange Board of India (hereinafter 2

referred to as 'SEBI') directing the appellant to refund the money

received from any investors / clients in respect of his unregistered

investment advisory activities and further restrained him from

accessing the securities market directly or indirectly for a period of

six months from the date of completion of refund to clients /

investors.

2. The facts leading to the filing of the present appeal is, that the

appellant was the sole proprietor of M/s. Big Life Capital Solutions.

On the basis of certain complaints received from the clients of the

appellant, SEBI conducted an investigation and found that the

appellant was engaged in investment advisory services without

obtaining a certificate of registration in violation of Section 12(1) of

the Securities and Exchange Board of India Act, 1992 (hereinafter

referred to as 'SEBI Act') and Regulation 3 of the Securities and

Exchange Board of India (Investment Advisers) Regulations, 2013

(hereinafter referred to as 'AI Regulations').

3. Accordingly, a show cause notice was issued to show cause as

to why suitable direction including the refund of fees collected,

debarment, etc. should not be issued under Section 11 and 11B of the

SEBI Act. After considering the material evidence on record and

after giving an opportunity of hearing to the appellant, the WTM 3

found that the appellant was carrying on investment advisory

services without obtaining a registration under Regulation 3(1) of the

IA Regulations.

4. We have heard Mr. Abhishek Mishra, CS for the appellant and

Mr. Vyom Shah, the learned counsel with Ms. Daksha Kasekar, Ms.

Veena Hari the learned counsel for the respondent.

5. Admittedly, the appellant was carrying on investment advisory

services without obtaining registration under Regulation 3(1) of the

IA Regulations. This resulted in violation of Section 12(1) of the

SEBI Act. The contention of the appellant is that he was working as

an employee was disbelieved by the WTM. No evidence in the form

of salary slip, employees ID, employment agreement has been

produced before us to show that the appellant was working as an

employee. The only contention raised by the appellant is that the

direction to refund a sum of Rs. 1 crore is patently erroneous in as

much as the entire amount shown in the bank accounts was not

towards advisory services and that at best a sum of Rs. 10 lakh is

refundable. It was urged that these facts were given in the post

hearing submissions which aspect has not been considered.

6. We find that in the impugned order the appellant had submitted

that the revenue from the investment advisory business was not more 4

than Rs. 35 lakh, but no proof had been filed. The WTM while

directing the appellant to refund the money to the investors / clients

also directed that the CA would certify the refund of the investment

advisory fees made by the appellant and, in this regard, while

certifying the refund would consider the material evidence on record.

7. In view of the aforesaid, we do not find any infirmity in the

impugned order. The appeal fails and is dismissed with no order as

to costs.

8. This order will be digitally signed by the Private Secretary on

behalf of the bench and all concerned parties are directed to act on

the digitally signed copy of this order. Certified copy of this order is

also available from the Registry on payment of usual charges.

Justice Tarun Agarwala Presiding Officer

Ms. Meera Swarup PRAMILA Digitally signed by Technical Member PRAMILA TANAJI 25.07.2023 TANAJI MISAL PTM MISAL Date: 2023.07.26 15:28:35 +05'30'