Satyajeet Kumar Singh vs Sebi

Date of Decision: 8.8.2019

Misc. Application No.286 of 2018 And Appeal No.392 of 2017 Satyajeet Kumar Singh 9/6, Haricharan Banerjee Street, Belurmath, Howrah - 711202. ..... Appellant

Versus

Securities & Exchange Board of India SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400051. ...... Respondent

Mr. Mukesh Sukhija, Advocate with Ms. Pooja Bhatia, PCS for the Appellant.

Mr. Sumit Rai, Advocate with Mr. Abhiraj Arora and Mr. Vivek Shah, Advocate i/b. ELP for the Respondent.

CORAM: Justice Tarun Agarwala, Presiding Officer Dr. C.K.G. Nair, Member Justice M.T. Joshi, Judicial Member

Per : Justice M.T. Joshi (Oral)

1.

Aggrieved by the impugned order of the respondent

Securities and Exchange Board of India (hereinafter referred

to as "SEBI') dated 8th November, 2017 of issuing direction

under Section 11, 11(4), 11A and 11B of the Securities and 2 Exchange Board of India Act, 1992 (hereinafter referred to as

'SEBI Act') the present appeal is preferred by appellant

Satyajeet Kumar Singh. The present appellant, the public

Limited company RTC Properties India Limited (hereinafter

referred to as 'RTC/Company) and other directors were

jointly and severally directed to refund the money collected

during their respective period of their directorship by giving

inventory etc as detailed in the order. All of them were also

restrained from accessing and dealing securities market for a

period of four years.

2. The facts on record would show that RTC during the

period 2009-2012 had issued various public securities

(wrongly described as Redeemable Preference Shares (RPS)

as three RPS only were issued in 2009-2010 while rest of the

securities were the public issue of securities for the year

2010-2012). The issuing of public securities was found to be

in violation of the requirement under Section 60, read with

Section 23(6), Section 56, Section 73(1), 73(2) and 73(3) etc

of the SEBI Act in respect of the offer of the public

securities.

The appellant submits that he is not concerned with

issue of public securities. His sole contention before the 3

WTM who had passed the impugned order was that he was

not director of the Company during the relevant period.

According to him, while the Company was incorporated on

12th February, 2010 at that time he became the promoter of

the Company on the persuasion of another director/noticee

Mr. Karunamay Roy. However, finding some suspicious

transaction of the Company he had resigned as a director of

the Company on 19th June, 2010. Mr. Karunamay Roy told

him to tender the resignation undated so that he would be

required to submit it with the Registrar of Companies within

eight days of signature. Said Karunamay Roy however later

on put the date of resignation letter as 4th April, 2011 which

could be found on the portal of ROC. Therefore, the

appellant cannot be held liable for the subsequent acts of the

Company from the date of actual resignation i.e.19th of June,

2019. In support of his contention he had placed on record

the copy of the resignation with him which bears the hand

written date as 19th June, 2010. Further, he also relied on the

preliminary investigation made by the Joint Director cum

Inspecting Officer of Ministry of Corporate Affairs dated 1st

May, 2017 (Annexure A15). This report inter alia would

show that the appellant's case that he had actually resigned as 4

a director from the Company on 19th June, 2010 was

accepted. As per MCA record the tenure of the appellant was

however till 4th April, 2011.

3. Learned counsel for the appellant submitted before us

that after the investigation by the Department of Corporate

Affairs prosecution is launched against the Company and its

directors. In view of the investigation report the appellant is

not arrayed as accused in the case. He additionally points out

the copy of the Balance sheet filed on record to show that

though the online filing would show that the present

appellant has signed the Balance sheet the hard copy of the

same would show a different signature than the normal

signature of the appellant.

On the other hand, learned counsel for the respondent

submits that the MCA records has presumptive value and

merely because during the preliminary investigation the

officer did not find any material against the present appellant,

would not mean that the appellant was not a promoter of the

Company during the relevant period. During the course of

the hearing he filed a copy of the financial investigation

report dated 24th July, 2018 issued by the Joint Director in the

Ministry of Corporate Affairs. Upon reading of the said 5

report it is clear that as regards non disclosure of Key

Managerial Personnel for the year 2009-2010 the present

appellant was found to be in violation to that extent only.

But the case of the appellant with regard his resignation was

accepted. Not only this the copy of the criminal complaint

filed by the Registrar of Companies in the Court of second

Special Judge Kolkata - Annexure A2 to rejoinder affidavit

would show that the present appellant was not arrayed as

accused in the case arising out of the present episode.

4. Upon hearing both the sides in our view while the

Department of Company Affairs has come to the conclusion

that the present appellant is not liable for the acts of issuing

public securities and other misdemeanor, the respondent

SEBI relied only on the portal of ROC to draw the

presumption that the present appellant was director of the

Company till 4th April, 2011. The presumption that has

arisen from of the record of the ROC clearly stands rebutted

in view of the investigation and ultimate launching of

prosecution by ROC itself. In that view of the matter the

order as against the present appellant passed by the WTM

cannot be sustained.

6

5. For the reasons stated aforesaid, the impugned order

cannot be sustained and is quashed. The appeal is allowed in

so far as the appellant is concerned. No order as to costs.

The Misc. Application no.286 of 2018 for interim relief

becomes infructuous and is also disposed of.

Sd/-

Justice Tarun Agarwala Presiding Officer

Sd/-

Dr. C. K. G. Nair Member

Sd/-

Justice M.T. Joshi Judicial Member

8.8.2019 Prepared and compared by RHN