Rdb Rasayans Ltd. vs Sebi

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Order Reserved On: 14.07.2016 Date of Decision : 26.07.2016

Appeal No. 514 of 2015 RDB Rasayans Ltd. Room No. 9, 3rd Floor, Bikaner Building 8/1, Lalbazar Street, Kolkata 700 001 ...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. P. N. Modi, Senior Advocate with Mr. Vinay Chauhan, Advocate i/b Corporate Law Chambers India for the Appellant.

Mr. Kumar Desai, Advocate with Mr. Anubhav Ghosh, Advocate i/b The Law Point for the Respondent.

WITH Appeal No. 532 of 2015 Mr. Sunder Lal Dugar RDB Rasayans Ltd. Room No. 9, 3rd Floor, Bikaner Building 8/1, Lalbazar Street, Kolkata 700 002 ...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. Vinay Chauhan, Advocate i/b Corporate Law Chambers India for the Appellant.

Mr. Kumar Desai, Advocate with Mr. Anubhav Ghosh, Advocate i/b The Law Point for the Respondent. 2

WITH Appeal No. 533 of 2015

Mr. Shanti Lal Baid RDB Rasayans Ltd. Room No. 9, 3rd Floor, Bikaner Building 8/1, Lalbazar Street, Kolkata 700 002 ...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. Vinay Chauhan, Advocate i/b Corporate Law Chambers India for the Appellant.

Mr. Kumar Desai, Advocate with Mr. Anubhav Ghosh, Advocate i/b The Law Point for the Respondent.

AND Appeal No. 534 of 2015

Mr. Sandeep Baid RDB Rasayans Ltd. Room No. 9, 3rd Floor, Bikaner Building 8/1, Lalbazar Street, Kolkata 700 002 ...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. Vinay Chauhan, Advocate i/b Corporate Law Chambers India for the Appellant.

Mr. Kumar Desai, Advocate with Mr. Anubhav Ghosh, Advocate i/b The Law Point for the Respondent.

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

Per: Justice J.P. Devadhar 3

1.

Appellants in these four appeals are aggrieved by the common

order passed by the Whole Time Member ("WTM" for short) of

Securities and Exchange Board of India ("SEBI" for short) on

19.12.2014. Hence all these appeals are heard together and disposed of

by this common decision.

2. RDB Rasayans Ltd. (Appellant in Appeal No. 514 of 2015) is a

public limited company ("RDB" for short) and is listed on Bombay Stock

Exchange ("BSE" for short). Appellants in Appeal Nos. 532 of 2015, 533

of 2015 & 534 of 2015 were at the relevant time, Chairman, Managing

Director and Whole Time Director respectively, of RDB.

3. By the impugned order dated 19.12.2014 the WTM of SEBI in

exercise of powers conferred under Section 11, 11A and 11B of the

Securities and Exchange Board of India Act, 1992 ("SEBI Act" for short)

has debarred the appellants from accessing the securities market and

prohibited them from buying, selling and otherwise dealing in securities

market directly or indirectly in any manner, whatsoever, for a period of

four years. It is further stated in the impugned order that the period of

prohibition already undergone by the appellants pursuant to the ex-parte

ad-interim order dated 28.12.2011 shall be taken into account for the

purpose of computing the period of prohibition imposed under the

impugned order. It is not in dispute that the appellants have already

undergone the debarment imposed under the impugned order and as such

all these appeals have become infructuous.

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4. However, counsel for the appellants, submitted that in the

impugned order, the WTM of SEBI has upheld two additional charges

against the appellants even though the Adjudicating Officer ("AO" for

short) of SEBI, in his order dated 06.08.2014 has dropped those two

charges and hence it would be just and proper to hear the appeals on

merit.

5. Basic charge held against the appellants is that by suppressing

material facts from the investors in the IPO, the appellants have violated

Securities And Exchange Board Of India (Issue Of Capital And

Disclosure Requirements) Regulations, 2009 ("ICDR Regulations" for

short) and by misutilizing the IPO proceeds, the appellants have violated

the Securities and Exchange Board of India (Prohibition of Fraudulent

and Unfair Trade Practices relating to Securities Market) Regulations,

2003 ("PFUTP" Regulations" for short).

6. It is relevant to note that based on the aforesaid violations, the AO

of SEBI by his order dated 06.08.2014 had inter alia imposed penalty of

` 2 crore on the directors of RDB. Challenging the said order passed by

the AO, the directors of RDB had filed appeals before this Tribunal. In

our order passed today in those appeals (lead matter being Appeal No.

404 of 2014 decided on 26.07.2016) we have upheld the decision of the

AO of SEBI that the directors or RDB are guilty of violating ICDR

Regulations and PFUTP Regulations and accordingly upheld the penalty

of ` 2 crore imposed on the appellants.

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7. Accordingly, for the reasons stated in our order in Appeal No. 404

of 2014, we uphold the order passed by the WTM of SEBI that the

appellants are guilty of violating the ICDR Regulations and PFUTP

Regulations.

8. As regards the two additional charges upheld against the

appellants, which were dropped by the AO of SEBI, in our opinion, the

WTM of SEBI without recording a finding as to how the order of AO is

erroneous with reference to the two additional charges, could not and

ought not to have upheld the two additional charges against the

appellants.

9. However, going into the question as to whether the WTM of SEBI

was justified in upholding the two additional charges would now be

futile, because the appellants have already undergone the debarment

imposed under the impugned order and as such the appeals have become

infructuous.

10. In these circumstances, we see no reason to go into the question as

to whether the WTM of SEBI was justified in upholding two additional

charges against the appellants. Accordingly, in view of our decision that

the appellants are guilty of violating the ICDR Regulations and PFUTP

Regulations and the appellants have already undergone the debarment

imposed under the impugned order, without going into the question as to

whether the WTM of SEBI was justified in upholding the two additional

charges, we dispose of all these appeals as infructuous. 6

11. All the appeals are accordingly dismissed as infructuous with no

order as to costs.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Dr. C.K.G. Nair Member 26.07.2016 Prepared & Compared By: PK