Trillenium Technologies Limited vs Sebi

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date of Decision: 03/05/2017

Misc. Application No.321 of 2016 And Appeal No.397 of 2016

Trillenium Technologies Limited H-40, Moti Bagh-2, Mini Market, Nanak Pura, New Delhi - 110 0021. ... 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. Rajesh Khandelwal, Advocate i/b JurisLink for the Appellant.

Mr. Vishal Kanade a/w Mr. Saurabh Bachhawat and Mr. Nishant Upadhyay, Advocates i/b K. Ashar & Co. for the Respondent.

CORAM : Jog Singh, Member Dr. C.K.G. Nair, Member

Per : Jog Singh (Oral)

1.

Both the learned Counsel for the parties agree that the matter can

be disposed of at the admission stage itself. Accordingly, with the

consent of the parties, the matter is taken and heard.

2. By Order dated 6th August, 2010, SEBI directed the appellant to

pay a monetary penalty of Rs.4 lac within a period of 45 days from the

receipt of the said order under Section 19D/H of the Depositories Act.

Since the appellant did not pay the amount in question, the Recovery

Officer of SEBI issued an order dated 9th December, 2015 calling upon 2

the appellant to pay an amount of Rs.6,57,570/- which is inclusive of

interest on the original penalty amount of Rs.4 lac.

3. Shri Khandelwal, learned Counsel for the appellant submits that

in view of the order of this Tribunal dated 10th March, 2017 in Appeal

No.41 of 2014 read with other Appeals (Dushyant Dalal vs. SEBI),

Recovery Officer was not entitled to levy interest retrospectively from a

prior date than the date of insertion of Section 28A in the SEBI Act, 1992

with effect from 18th July, 2013. Shri Vishal Kanade, learned Counsel

for SEBI argues that the judgment of this Tribunal in Dushyant Dalal is

being examined and the period of appeal to the Hon'ble Apex Court

has not expired.

4. After hearing both the learned Counsel for the parties and

perusing the appeal, we note that the Recovery Officer was not

competent to impose interest on the delayed monetary penalty of Rs.4

lac in question under Section 28A of the SEBI Act. This Tribunal has

categorically held in its order dated 10th March, 2017 i.e. in Dushyant

Dalal's case, as follows:-

"32(a) In all the appeals except in Appeal No. 41 of 2014, the

penalty orders passed by the AO of SEBI prior to 18.07.2013 did

not contain any obligation to pay interest if the penalty was not

paid within the time stipulated in the respective penalty orders.

In the absence of any direction contained in the penalty orders to

pay interest for the delayed payment of penalty, the RO while 3

implementing the penalty orders could not have demanded

interest for the delayed payment of the penalty by invoking

Section 28A inserted to SEBI Act with effect from 18.07.2013. On

insertion of Section 28A the RO 42 could demand interest on

unpaid penalty only if the penalty was not paid within 30 days

from 18.07.2013, that is the date on which Section 28A read with

Section 220 came into force. Accordingly, in all the appeals

(except in Appeal No. 41 of 2014) interest demanded by the RO

from the date of the penalty orders are quashed and set aside and

all these matters are restored to the file of the RO for fresh

computation of interest in terms of this decision."

5. In view of the above said ruling of this Tribunal in Dushyant

Dalal, it is evident that the imposition of interest on the delayed

payment of Rs.4 lac prior to 18/7/2013 could not have been imposed by

the Recovery Officer retrospectively with effect from 6th August, 2010. It

is also noted that the original order dated 6th August, 2010 does not

impose any interest on the amount of Rs.4 lac if it was delayed. Be that

as it may, despite the fact that this Tribunal in its order dated 10th

March, 2017 in the case of Dushyant Dalal has held that the Recovery

Officer cannot demand interest for the delayed payment of penalty

amount by invoking Section 28A inserted with effect from 18th July,

2013 in the absence of any imposition of interest in the original order,

Shri Khandelwal, learned Counsel for the appellant in order to give

finality to this old pending matter has fairly stated that if sufficient time 4

was granted to the appellant to deposit the monetary penalty as

directed by the Respondent in its order dated 9th December, 2015, he

would abide by the same and not precipitate the matter anymore in the

light of this Tribunal's order in Dushyant Dalal.

6. In view of the above said, we dispose of the present appeal by

directing the appellant to deposit the amount of Rs.6,57,570/- within a

period of four months from the date of receipt of copy of this order

failing which the Respondent would be at liberty to recover the

aforesaid amount as per law.

7. Appeal as well as Misc. Application stand disposed of in the

aforesaid terms with no order as to costs.

Sd/-

Jog Singh Member

Sd/-

Dr. C.K.G. Nair Member

03/05/2017 prepared & compared by-dg