Samruddha Jeevan Foods India Limited & ... vs Sebi
- CitationAppeal No. 374 of 2019
Ratio decidendi
The rule this decision rests on
Where a final order of the regulator has been passed and the appellants earlier challenged it in an appeal that was disposed of on their undertaking to comply, and their subsequent repayment proposal has been rejected by the regulator in an order that was never challenged before a superior forum, that rejection becomes final and the original final order cannot be reopened in a later appeal against a recovery notice. Where the appellants have made no concerted effort to repay the amount due under the regulator's final order, the regulator is justified in initiating recovery proceedings and issuing a notice of demand, and no ground for interfering with such a notice exists. A delay in filing an appeal is condonable where the appellants' directors were in judicial custody and the respondent did not deny that fact, so that cause is shown for the delay.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Date of Decision: 19.02.2020
Misc. Application No. 456 of 2019 And Appeal No. 374 of 2019
1.
Samruddha Jeevan Foods India Limited Office No. 1, 1st Floor, Sr. No. 63/2B/9, The Forum Pune Satara Road, Parvati, Pune- 411 009
2. Mr. Mahesh Kisan Motewar Flat No. 5, Ganraj Heights, Kashinath Patil, Nagar, Dhankwadi, Pune- 411 043
3. Mrs. Vaishali Mahesh Motewar, F. N. 5, S. N. 2012, Ganraj Heights, K. P. Nagar, Pune- 411 043
4. Mr. Rajendra Pandurang Bhandare 37/3, Damaninagar, Solapur- 413 002 ...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. Soumen Banerjee, Advocate with Mr. Mayank Sharma and Mr. Sumedh Sonawane, Advocates for Appellants.
Mr. Shyam Mehta, Senior Advocate with Mr. Mihir Mody and Mr. Shehaab Roshan, Advocates i/b K. Ashar & Co. for the Respondent.
2
CORAM: Justice Tarun Agarwala, Presiding Officer Dr. C.K.G. Nair, Member
Per: Justice Tarun Agarwala (Oral)
1. The present appeal has been filed questioning the veracity
of the order dated November 20, 2018 passed by the Recovery
Officer ("RO" for convenience) of the Securities and Exchange
Board of India, by which a notice of demand to pay ` 301.29
crores was issued. The appellant has also prayed for setting
aside the final order September 02, 2015 passed by the Whole
Time Member ("WTM" for convenience). Further, a prayer was
made that they may be allowed to make the repayment as per
their proposal dated October 26, 2017.
2. There is a delay of 229 days in filing the appeal which
period has been taken from the date of the notice of demand
issued by the RO dated November 20, 2018 and not from the
date of the order dated September 02, 2015 passed by the WTM.
The ground urged is, that the directors are in judicial custody
because of which no appeal could be filed within the stipulated
period. The fact that the directors are in judicial custody have
not been denied by the respondent. Considering the aforesaid,
cause shown is sufficient. The delay in filing the appeal is
condoned. The delay condonation application is allowed. 3
3. In so far as, the prayer to set aside the final order dated
September 02, 2015 passed by the WTM is concerned we find
that such relief cannot be granted. The appellants had earlier
filed an Appeal No. 469 of 2015 challenging the order dated
September 02, 2015 which was disposed of by an order dated
September 29, 2017 wherein the submission of the appellants
was recorded that they were ready and willing to comply with
the impugned order, namely the order dated September 02, 2015
by refunding the amounts due to the investors in a time bound
manner. On this submission, the appeal was disposed of
permitting the appellants to make a representation before SEBI
setting out in detail the mode and manner in which the
appellants would refund the amounts to the investors. It
transpires that pursuant to the order of the Tribunal dated
September 29, 2017 a representation dated October 26, 2017
was made which was rejected by the SEBI by an order dated
July 02, 2018. This rejection has not been challenged by the
appellants in the present appeal. Further, the order dated
September 02, 2015 cannot again be challenged in the present
appeal. We also find that the prayer of the appellants that they
may be allowed to repay the amount pursuant to their proposal
dated October 26, 2017 cannot be accepted in as much as their
proposal has been rejected by SEBI by an order dated July 02, 4
2018 which order has become final since the same was never
challenged before a superior forum.
4. Since no concerted effort was made by the appellants to
repay the amount as per the order passed by the WTM of SEBI
dated September 02, 2015 the recovery proceedings have been
initiated and the impugned notice of demand dated November
20, 2018 has been issued for recovery of ` 301.29 crores.
5. Having heard the learned counsel for the appellants, we do
not find any reason to interfere in the impugned recovery notice
as we do not find any valid scheme by which the appellants
have made a concerted effort to repay the amount. Appeal fails
and is dismissed summarily.
Sd/-
Justice Tarun Agarwala Presiding Officer
Sd/-
Dr. C.K.G. Nair Member 19.02.2020 Prepared & Compared By: PK
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