Sunny Gupta vs Sebi

Date of Decision : 10.01.2023

Appeal No. 339 of 2022

Mohd. Tanveer Ahmed B-55, Near Ishaq Wali Masjid, Sarai Kale Khan, Hazrat Nizamuddin SO, South Delhi, Delhi - 110 013. .....Appellant

Versus

1.

Securities and Exchange Board of India SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051.

2. Sunny Gupta 504, Peach Block, HM World City, Bangalore - 560 076. ...Respondents

Mr. Asit Singh, Advocate for the Appellant.

Mrs. Rathina Maravarman, Advocate with Mr. Akash Jain and Ms. Daksha Kasekar, Advocates i/b Mansukhlal Hiralal & Co. for the Respondent.

AND Misc. Application No. 614 of 2022 And Appeal No. 340 of 2022

Sunny Gupta 504, Peach Block, HM World City, Bangalore - 560 076. .....Appellant 2

Versus

3. Securities and Exchange Board of India SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051.

4. Mohd. Tanveer Ahmed B-55, Near Ishaq Wali Masjid, Sarai Kale Khan, Hazrat Nizamuddin SO, South Delhi, Delhi - 110 013. ...Respondents

Mr. Asit Singh, Advocate for the Appellant.

Mrs. Rathina Maravarman, Advocate with Mr. Akash Jain and Ms. Daksha Kasekar, Advocates i/b Mansukhlal Hiralal & Co. for the Respondent.

CORAM : Justice Tarun Agarwala, Presiding Officer Ms. Meera Swarup, Technical Member

Per : Justice Tarun Agarwala, Presiding Officer (Oral)

1. In view of the order of Supreme Court in Suo Moto Writ

Petition (Civil) No. 3 of 2020 dated March 23, 2020, March 8,

2021, April 27, 2021 and January 10, 2022, the delay in the

filing of the appeal is condoned. The Misc. Application no.

614 of 2022 in Appeal no. 340 of 2022 is allowed.

2. Both the appeals have been filed against the common

order dated February 5, 2021 passed by the Whole Time 3

Member ("WTM" for convenience) of the Securities and

Exchange Board of India ("SEBI" for convenience) directing

the appellants to refund the money received from its clients/

investors as fee on account of carrying investment advisory

activities without getting itself registered under Section 12(1)

of the Securities and Exchange Board of India Act, 1992

("SEBI Act, 1992" for convenience) read with regulation 3 of

the SEBI (Investment Advisers) Regulations, 2013 ("IA

Regulations 2013").

3. The appellants were further debarred from accessing the

securities market till the expiry of three years from the date of

completion of refund to the investors. Further, other

directions were also issued.

4. The facts leading to the filing of the present appeal is,

that the appellants started their investment advisory activities

from the year June 2015 onwards. A complaint was received

by SEBI from an investor who alleged that the appellants had

assured high profits and after the money was transferred the

company was neither replying nor providing any records for

the payments made.

4

5. Based on the investigation, it was observed that the

appellants were engaging and providing investment advisory

services without obtaining a certificate of registration from

SEBI and were also promising assured returns to the

investors.

6. Accordingly, an interim order dated November 28, 2018

was passed issuing a slew of directions directing the

appellants to cease and desist from acting as an investment

advisor and not to divert any funds or dispose of or alienate

any assets. The appellants were also directed to withdraw the

advertisements, representations, literatures, brochures with

regard to their activities and were also restrained from

accessing the securities market. By the interim order the

appellants were directed to show cause as to why the services

offered by the appellants should not be held as an investment

advisory services in terms of the IA Regulations, 2013 and

their advisory activities should not be treated as an

unregistered activities in violation of Section 12 of the SEBI

Act. The show cause notice also directed the appellants to

show cause why the amount of money collected by them

should not be refunded to the investors. 5

7. The WTM after considering the reply has passed the

impugned order holding that the activities carried out by the

appellants were investment advisory services and the

appellants were not registered under Section 12 of the SEBI

Act read with Regulation 3 of the IA Regulations, 2013. The

WTM further held that the activities carried out was providing

an assured return which was wholly illegal and, consequently,

directed the appellants to refund the amount within three

months.

8. We have heard Shri Asit Singh, the learned counsel for

the appellant and Mrs. Rathina Maravarman, the learned

counsel for the respondent.

9. We find that admittedly, the appellants were carrying

out advisory services without getting themselves registered

under the SEBI Act and its Regulations. The activities that the

appellants were carrying out were thus unlawful. The

appellants are thus liable to refund the amount collected by

them to the investors. The direction given by the WTM does

not suffer from any error of law.

10. We find that the controversy involved in the present

appeal is squarely covered by a decision of this Tribunal in 6 Eprofitzone Fincap Consultant Private Limited & Ors. vs

SEBI (Appeal no. 490 of 2022 decided on August 25, 2022),

Shri T. Prabhu vs SEBI (Appeal no. 1019 of 2022 decided

on January 3, 2023) and Murugan Deivendran vs SEBI

(Appeal no. 309 of 2022 decided on November 16, 2022).

11. For the reasons stated aforesaid, the appeals lack merit

and are dismissed.

12. 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 Technical Member

10.01.2023 MADHUKAR Digitally signed by MADHUKAR

msb SHAMRAO SHAMRAO BHALBAR Date: 2023.01.11 BHALBAR 16:47:19 +05'30'