V.P. Patel vs Sebi
- CitationAppeal No.100 of 2014
Ratio decidendi
The rule this decision rests on
Where an adjudicating officer records each appellant's submissions separately but then imposes penalty only on the strength of general observations without independently considering the merits of those individual submissions, the penalty order cannot stand and must be set aside. On remand, the adjudicating officer must pass a fresh order on the merits of each appellant's case after giving each a personal hearing, and may reconsider whether it has discretion to impose a penalty lesser than that prescribed under Section 15HA of the SEBI Act, 1992, in light of the authorities the tribunal cites.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Date of decision: 06/04/2016
Appeal No.100 of 2014 Pelf Finstock Ltd. 11th Floor, Agarwal Millennium Tower II, Netaji Subhash Palace, Pitampura, Delhi - 110 034. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
WITH Misc. Application No.57 of 2015 And Appeal No.127 of 2014 Shikha Somani 5A, Tilak Bhavan, 5th Floor, Opp. Udyog Bhavan, Tilak Mark, C-Scheme, Jaipur - 302 005. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent WITH Appeal No.132 of 2014 Vanraj Singh Kahor A/104, Regency Tower, Management Enclave, Vastrapur, Ahmedabad-380 015. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent -2-
WITH Appeal No.133 of 2014
V.P. Patel B73, Samta CHS, B H Navnirman High School, Near Parikh Colony, Ranip, Ahmedabad - 382 480. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
WITH Misc. Application No.58 of 2015 And Appeal No.142 of 2014
Prem Somani Share Brokers Pvt. Ltd. 5A, Tilak Bhavan, 5th Floor, Opp. Udyog Bhavan, Tilak Mark, C-Scheme, Jaipur - 302 005. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
WITH Appeal No.146 of 2014
Shree Bahubali International Limited 12, India Exchange Place, 3rd Floor, Kolkata - 700 001. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent -3-
WITH Appeal No.148 of 2014
M/s. Korp Securities Limited "Martin Burn House", 1, R.N. Mukherjee Road, 5th Floor, Room No.29, Kolkata - 700 001. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
WITH Appeal No.152 of 2014
Shashwat Stock Brokers Pvt. Ltd. 307, Shyamak Complex, Opp. New Excise Bhavan, Near Panjrapole, Ahmedabad - 380 015. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
WITH Appeal No.153 of 2014
Swift Tie Up Private Limited 132/1, Mahatma Gandhi Road, 4th Floor, Kolkata - 700 007. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent -4-
WITH Appeal No.154 of 2014
Jalan Cement Works Limited Century Plaza, 81, N.S. Road, Room No.202, 2nd Floor, Kolkata - 700 001. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
WITH Appeal No.155 of 2014
Orbit Financial Consultants Private Limited 119B, Mukta Ram Babu Street, 4th floor, Burra Bazar, Kolkata, West Bengal - 700 007. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
WITH Appeal No.156 of 2014
Marutinandan Infosolutions Private Limited 9/12, Lal Bazar Street, 3rd Floor, Block E, Room No.8A, Kolkata, West Bengal - 700 001. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent -5-
WITH Appeal No.157 of 2014
M/s. Wheelers Developers Pvt. Ltd. 163-B, M.G. Road, 3rd Floor, Kolkata - 700 007. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
WITH Appeal No.158 of 2014
M/s. Divya Drushti Merchants Pvt. Ltd. 163-B, M.G. Road, 3rd Floor, Kolkata - 700 001. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
WITH Appeal No.161 of 2014
GRD Securities Limited 7, B.B. Ganguly Street, Kolkata - 700 012. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent -6-
WITH Appeal No.162 of 2014
Mrs. Ritu Jain Parmatma House, 11, Babar Lane, Bengali Market, New Delhi - 110 001. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
WITH Appeal No.163 of 2014
Anoop Jain HUF Parmatma House, 11, Babar Lane, Bengali Market, New Delhi - 110 001. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
WITH Appeal No.164 of 2014
Shri Anoop Vimal Jain Parmatma House, 11, Babar Lane, Bengali Market, New Delhi - 110 001. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent -7-
WITH Appeal No.165 of 2014
M/s. Vimgi Investments Private Limited Parmatma House, 11, Babar Lane, Bengali Market, New Delhi - 110 001. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
WITH Appeal No.178 of 2014
M/s. Divya Drishti Traders Pvt. Ltd. 163B, M.G. Road, 3rd Floor, Kolkata - 700 007. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent
WITH Appeal No.188 of 2014 Nimit Jayendra Shah 12, Lavanya Society, Nr. Jivraj Mehta Hospital, Paldi, Ahmedabad - 380 007. ... Appellant
Versus
Securities and Exchange Board of India having its registered office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent -8-
Mr. Anil Choudhary a/w Ms. Pragyan Patnaik and Mr. Shashank Patil, Advocates i/b Finsec Law Advisors for the Appellant in Appeal No.100/2014.
Mr. Amit Gupta a/w Ms. Rinku Valanju, Advocates for the Appellants in Appeal Nos.127/2014, 142/2014.
Mr. Ankit Lohia a/w Mr. Pravin Kamble, Advocates for the Appellant in Appeal No.132/2014.
Mr. Anant Upadhyay, Advocate for the Appellant in Appeal No.133/2014.
Mr. Vinay Chauhan a/w Mr. K.C. Jacob and Mr. Ayush Agarwal, Advocates for the Appellants in Appeal Nos.146/2014, 157/2014, 158/2014, 178/2014.
Mr. Ayush Agarwal, Advocate for the Appellant in Appeal No.148/2014.
Mr. Deepak R. Shah, Advocate for the Appellants in Appeal Nos.152/2014, 188/2014.
Mr. Jaikishan Lakhwani, Advocate for the Appellants in Appeal Nos.153/2014, 154/2014, 161/2014.
Mr. K.C. Jacob a/w Mr. Jaikishan Lakhwani and Mr. Ayush Agarwal, Advocates for the Appellants in Appeal Nos.155/2014, 156/2014.
Mr. Prakash Shah, Advocate for the Appellants in Appeal Nos.162/2014, 163/2014, 164/2014, 165/2014.
Mr. Shiraz Rustomjee, Senior Advocate a/w Mr. Mihir Mody, Mr. Harekrishna Ashar and Mr. Saurabh Bachhawat, Advocates i/b K. Ashar & Co. for the Respondent.
CORAM : Justice J.P. Devadhar, Presiding Officer Jog Singh, Member Dr. C.K.G. Nair, Member
Per : Justice J.P. Devadhar (Oral)
Misc. Application No.57 of 2015 in Appeal No.127 of 2014:
Counsel for the Appellant states that he has instructions to withdraw
the Misc. Application. Accordingly, Misc. Application is allowed to be
withdrawn with no order as to costs. -9-
Misc. Application No.58 of 2015 in Appeal No.142 of 2014:
Counsel for the Appellant states that he has instructions to withdraw
the Misc. Application. Accordingly, Misc. Application is allowed to be
withdrawn with no order as to costs.
Appeal Nos.100, 127, 132, 133, 142, 146, 148, 152, 153, 154, 155, 156, 157, 158, 161, 162, 163, 164, 165, 178 & 188 of 2014
1.
In all these Appeals, Appellants have challenged the common order
passed by the Adjudicating Officer ("AO" for short) of Securities and
Exchange Board of India ("SEBI" for short) on 25th March, 2014 whereby
varying penalties have been imposed upon the Appellants under Section
15HA of the SEBI Act, 1992, and in few cases, penalties have also been
imposed under Section 15HB of the SEBI Act. Since common order is
challenged in these Appeals, all these Appeals are heard together and
disposed of by this common order.
2. It is not in dispute that although the AO in the impugned order has
recorded the individual submission made by each Appellant separately, the
AO has not considered the merits of those submissions independently and
has sought to impose penalty by making only general observations.
3. Without considering the merits of the submissions made by each
Appellant independently, the AO could not have imposed penalty merely on
the basis of general observations. Since the AO has failed to consider the
submission made by each Appellant, in our opinion, it is just and proper to
set aside the impugned order and restore the matters to the file of AO for
passing fresh order on merits and in accordance with law. -10-
4. Apart from the above, in view of the decision of the Apex Court in the
case of SEBI vs. Roofit Industries Ltd., reported in (2016) 194 Comp. Cas.186
(S.C.), and in the case of Siddharth Chaturvedi vs. SEBI (Civil Appeal
No.14730 of 2015) decided on March 14, 2016, AO may also reconsider the
issue as to whether there is any discretion to impose lesser penalty than the
penalty prescribed under Section 15HA of SEBI Act.
5. Accordingly, the impugned order dated 25th March, 2014 is set aside
qua the Appellants herein and all the matters are restored to the file of AO for
passing fresh order on merits and in accordance with law after giving
personal hearing to each of the Appellant.
6. All contentions of both parties are kept open.
7. All these Appeals as well as Misc. Applications are disposed of in the
above 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 06/04/2016 Prepared & compared by-ddg
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