Shriram Insight Share Brokers Ltd. vs Sebi

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date of Decision: 19.09.2022 Misc. Application No. 155 of 2022 And Misc. Application No. 1043 of 2022 And Appeal No. 565 of 2022 Shriram Insight Share Brokers Ltd. Mookambika Complex: 4th Floor, 4 Lady Desikachary Road, Mylapore, Chennai- 600 004 ...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. Vishal Hegde, Advocate with Mr. Deepakar Livingston, Mr. Harshad Vyas and Mr. R.P Shirole, Advocates i/b Mr. Vishal Hegde, Advocate for the Appellant. Mr. Sumit Rai, Advocate with Mr. Nishit Dhruva, Mr. Ravishekhar Pandey and Ms. Shefali Shankar, Advocates i/b MDP & Partners for the Respondent. CORAM: Justice Tarun Agarwala, Presiding Officer Ms. Meera Swarup, Technical Member Per: Justice Tarun Agarwala, Presiding Officer (Oral) 1. For the reasons stated in the application and in view of the order of the Supreme Court in suo moto writ petition (civil) no(s). 3/2020 dated 23rd March, 2020, March 08, 2021, April 2 27, 2021 and January 10, 2022, coupled with the fact that the certified copy of the impugned order was never supplied to the appellant, we condone the delay.

The application is allowed. For the same reasons, the exemption application is also allowed. 2. We have heard the learned counsel for the parties. The present appeal has been filed against the order dated April 30, 2020 whereby a penalty of Rs. 2 lakhs has been imposed for wrong reporting of the margin money etc. 3. We find that the inspection of the books of accounts at the brokers office was carried out in the year October 2013 and administrative warning was issued with regard to some of the deficiencies found in the inspection of February 22, 2019 and thereafter, after four years, a show cause notice was issued on June 11, 2019 with regard to the other violations. 4. Having heard the learned counsel for the parties, we are of the opinion that there is an inordinate delay in issuance of the show cause notice. In similar circumstances, in Shriram Insight Share Brokers Ltd. vs. Securities and Exchange Board of India Appeal No. 559 of 2020 decided on January 04, 2022 a show cause notice was issued on December 12, 2019 whereas the inspection of the books of accounts was conducted in 3 January/ February, 2012. This Tribunal in its judgement quashed the show cause notice on the ground of inordinate delay.

This judgement was affirmed by the Supreme Court by an order of March 28, 2022 in Civil Appeal No(s). 1863 of 2022 Securities and Exchange Board of India vs. Shriram Insight Share Brokers Ltd. 5. For the reasons stated aforesaid, the impugned order is quashed. The appeal is allowed. It has been stated at the Bar that pursuant to the impugned order the appellant had deposited the amount under protest. If that is the case, the respondents are directed to refund the amount within four weeks from today. 6. This order will be digitally signed by the Private Secretary on behalf of the bench and all concerned parties are directed to act on the digitally signed copy of this order. Certified copy of this order is also available from the Registry on payment of usual charges. Justice Tarun Agarwala Presiding Officer Ms. Meera Swarup RAJALA Digitally signed by RAJALAKSHMI Technical Member 19.09.2022 KSHMI H NAIR Date: 2022.09.26 PK H NAIR 11:29:07 +05'30'