Rajendra Somani And Others vs Sebi
- CitationAppeal No. 274 of 2014
Ratio decidendi
The rule this decision rests on
The impugned adjudication order cannot stand where it was passed without regard to material that goes to the root of the matter, namely a prior order showing that a co-promoter had made the disclosures required to avail the general exemption under Regulation 10 of the Takeover Regulations, 2011, which, if established, would negate the obligation on the appellants to make a public announcement; such a material fact not available at the time of the impugned order justifies setting aside that order and remitting the matter to the adjudicating officer for fresh determination on merits and in accordance with law, with all contentions of both parties kept open.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
DATE : 01.03.2016
Appeal No. 274 of 2014
1.
Rajendra Somani
2. Ms. Mridula Somani
3. Ms. Vandana Somani
4. Mr. Surendra Somani
5. Mr. Adarsh Somani
Shreeniketan, 86-A, N. S. Road, Mumbai 400 002.
6. Mr. Shurid Somani
7. Ms. Jaya Somani
8. Mr. Hridai Somani
403, Olympus Altamount Road, Mumbai 400 026.
9. Kopran Labs Pvt. Ltd.
Prijat House, 1076, Dr. E. Moses Road, Worli, Mumbai - 400 018.
10. S. V. Trading & Agencies Ltd.
Shop No. 006, Builidng No. 1, Vasant Aishwarya CHSL Mathuradas Extn. Road, Kandivali (W), Mumbai - 400 067. ..... 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. Ankit Lohia, Advocate with Mr. Amit Dey, Mr. Satyam Sancheti, Advocates i/b Mindspright Legal for the Appellant. Mr. Kumar Desai, Advocate with Mr. Manish Acharya i/b Vigil Juris for the Respondent.
CORAM : Justice J. P. Devadhar, Presiding Officer Jog Singh, Member
Per : Justice J. P. Devadhar (Oral) 2
1. Appellants herein are aggrieved by the adjudication order passed by
the adjudicating officer of SEBI on May 30, 2014 whereby penalty of ` 15
lac is imposed on the appellants under Section 15H(ii) of the Securities and
Exchange Board of India Act, 1992 ('SEBI Act' for short) for violating
Regulation 3(2) read with 13(1) of Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011
('Takeover Regulations, 2011' for short) and the appellants are directed to
pay the said penalty jointly and severally.
2. Appellants form a promoter group of Svaraj Trading and Agencies
Ltd. ('target company' for convenience) alongwith Mr. Susheel Somani.
By the impugned order it is held that on account of inter se transfer of
shares of the target company amongst the promoters, public announcement
obligation under the Takeover Regulations, 2011 got triggered and since
the conditions set out under Regulation 10 of the Takeover Regulations,
2011 were not complied with, the benefit of exemption thereunder was not
available and, therefore, by failing to make public announcement, the
appellants have violated the provisions contained in the Takeover
Regulations, 2011. Accordingly, the appellants are directed to pay penalty
jointly and severally.
3. Argument of the appellants is that firstly, the appellants have not
acquired any new shares and, therefore, there was no obligation on part of
appellants to make any public announcement. Secondly, it is contended
that Mr. Susheel Somani who had acquired the shares under the inter se
transfer, had made requisite declaration under the Takeover Regulations,
2011 and, therefore, the general exemption under Regulation 10 being
available, the said Susheel Somani and consequently the appellants were
exempt from making public announcement. 3
4. During the course of arguments, counsel for the appellants brought to
our notice an order passed by the adjudicating officer of SEBI on May 30,
2014. From the said order, it prima facie appears that Mr. Susheel Somani
had made requisite disclosures which would entitle Mr. Susheel Somani to
avail exemption under Regulation 10 of the Takeover Regulations, 2011
and in that event the obligation on part of the appellants to make public
announcement would not arise.
5. Since the above order was not available at the time of the passing of
the impugned order and since the said order goes to the root of the matter,
in our opinion, it would be just and proper to set aside the impugned order
and restore the matter to the file of the adjudicating officer for passing fresh
order on merits and in accordance with law.
6. Accordingly, the impugned order dated May 30, 2014 is quashed and
set aside and the matter is restored to the file of the adjudicating officer for
passing fresh order on merits and in accordance with law. All contentions
of both the parties are kept open.
7. The appeal is disposed of in the above terms with no order as to costs.
Sd/-
Justice J. P. Devadhar Presiding Officer
Sd/-
Jog Singh Member
01.03.2016 Prepared & Compared by PTM
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