Sebi (Applicant/ Org. Respondent) Vs ... vs Sebi
- CitationAppeal No. 68 of 2014
Ratio decidendi
The rule this decision rests on
The Tribunal's directions rest on the following reasoning: where the regulator has failed to comply with a previous direction of the Tribunal through negligence, that default does not excuse the alleged violator of the statute and regulations, who cannot go unpunished on account of the regulator's failure, so the Tribunal will not extend time for compliance on that ground and will instead fix a timetable for the regulator to issue show cause notices, receive replies, and adjudicate and pass an appropriate order in accordance with law, with liberty to proceed ex parte if no reply is received within the stipulated period. Where a party seeking the benefit of a delay caused by the regulator's own negligence relies on the lapse of time since the alleged violation, the Tribunal will not accept that the appellant should be exempted from proceedings on that basis, but will require the adjudication to be completed within a fixed period, and may impose costs on the regulator for the delay, here quantified and payable to the appellant's advocate.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Securities and Exchange Board of India SEBI Bhavan, Plot No. C-4A, G Block, Bandra Kurla Complex, Bandra (East), ...Applicant Mumbai - 400 051. (Orig. Respondent)
Versus
1.
Vilas Valunji C-1/6, 5 Rajashree Villa, Bhosle Nagar Near Range Hills, Pune - 411020.
2. Partha Debnath Flat No. 302, Vishista Saffire, Mansoorabad, Hyderabad.
3. Janardhan Shriniwas Purandare Vivekanand Nagar HUDCO, N 12, C-134 ...Respondents Aurangabad, Maharashtra - 431 003. (Orig. Appellants)
Mr. Pradeep Sancheti, Senior Advocate with Mr. Mihir Mody and Mr. Nishant Upadhyay, Advocate i/b K. Ashar & Co. for the Applicant (Orig. Respondent).
None for the Respondents (Orig. Appellants).
WITH
Misc. Application No. 142 of 2017 In Appeal No. 70 of 2014 Securities and Exchange Board of India SEBI Bhavan, Plot No. C-4A, G Block, Bandra Kurla Complex, Bandra (East), ...Applicant Mumbai - 400 051. (Orig. Respondent)
Versus
V.A. Norhi G-8, Stone Valley, Banjara Hills Road No. 4, Hyderabad, ...Respondent Andhra Pradesh. (Orig. Appellant) 2
Mr. Pradeep Sancheti, Senior Advocate with Mr. Mihir Mody and Mr. Nishant Upadhyay, Advocate i/b K. Ashar & Co. for the Applicant (Orig. Respondent).
Mr. Nirman Sharma, Advocate with Mr. Hasmukh Ravaria, Advocate i/b Rajesh Khandelwal, Advocate for the Respondent (Orig. Appellant).
CORAM : Justice J.P. Devadhar, Presiding Officer Jog Singh, Member Dr. C.K.G. Nair, Member
Per : Justice J.P. Devadhar (Oral)
1. These two Misc. Applications are taken out by SEBI (Orig.
Respondent) seeking extension of time to comply with the order by this
Tribunal on September 5, 2014.
2. As per the order passed by this Tribunal on September 5, 2014 it was
obligatory on part of SEBI to issue show cause notice to the Appellant and
pass fresh order preferably within a period of 4 months from September 5,
2014.
3. In spite of the specific direction contained in the order of this
Tribunal dated September 5, 2014 SEBI has failed and neglected to comply
with the said directions. Although SEBI has filed several affidavits
explaining the circumstances in which the order of this Tribunal had
remained to be implemented we are not at all impressed by those
explanations. In our opinion, there is gross negligence on part of various
officials of SEBI including the concerned WTM of SEBI.
4. Although, no case is made out for grant of extension, for the
negligence of SEBI, a person who has allegedly violated SEBI Act and the
regulations made there under cannot go unpunished. 3
5. Counsel for the Orig. Appellant in Appeal No. 70 of 2014 submitted
that the alleged violation was committed several years back and for the
negligence of SEBI Appellant should not be penalized.
6. In these circumstances, taking overall view of the matter and by
keeping all contention of both sides open, we dispose of the Misc.
Applications by passing the following order:-
(a) SEBI shall issue show cause notices to the Appellants within
two weeks from today. Reply, if any, be filed by the Orig.
Appellant in the respective appeals, within 4 weeks from
receiving the show cause notice.
(b) SEBI shall complete the adjudication proceedings in
accordance with law and pass appropriate order within a
period of 4 weeks from receiving the reply from the
Appellants. If reply is not received within the stipulated time,
SEBI is at liberty to pass ex-parte order.
(c) SEBI shall pay costs of Rs. 10,000/- to the Advocate for the
Orig. Appellant in Appeal No. 70 of 2014 within a period of
two weeks from today.
7. Both the Misc. Applications are disposed of in the aforesaid terms
with no order as to costs.
Sd/-
Justice J.P. Devadhar Presiding Officer
Sd/-
Jog Singh Member
Sd/-
Dr. C.K.G. Nair Member 28.06.2017 Prepared and compared by:
msb
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