Vijay Ghyanshambhai Pujara vs Sebi
- CitationAppeal No. 718 of 2024
Ratio decidendi
The rule this decision rests on
The order is an interim order: it admits the appeal, grants time for pleadings, and adjourns the matter for hearing on a consent date. On the interim prayers, the Tribunal does reason, but only in one respect that bears on the disgorgement direction; the stay of penalty recovery is granted on terms, and the bank attachment point is expressly left for later consideration without any finding. The principle the Tribunal rests its refusal of interim relief against the disgorgement direction on is this: where an appellant has permitted a third party to operate his demat account and is shown to be a repeat offender, he cannot claim equity in resisting liability for disgorgement under Section 11B of the SEBI Act, and an interim stay of the disgorgement direction is therefore refused.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Date : 06.01.2025
Appeal No. 718 of 2024 [Along with Misc. Application No. 1333 of 2024]
Vijay Ghyanshambhai Pujara ...Appellant Versus
Securities and Exchange Board of India ...Respondent
Mr. Abhiraj Arora, Advocate and Mr. Jitendra Sharda i/b Jitendra Sharda & Associates for the Appellant.
Mr. Sumit Rai a/w Mr. Mihir Mody, Mr. Harshvardhan Melanta, Mr. Yash Sutaria and Mr. Tushar Bansode, Advocates i/b. M/s. K. Ashar & Co. for the Respondent.
ORDER:
Admit.
2. Respondent is granted four weeks time to file a reply and
two weeks thereafter to the appellant to file rejoinder.
3. The recovery proceedings relating to penalty shall remain
stayed subject to deposit of 50% of the penalty amount within
two weeks from today. If the said amount is deposited, the same
shall be kept in an interest bearing account by the respondent.
4. With regard to the direction for disgorgement contained in
paragraph 129.4 of the impugned order, it was argued by 2
learned Advocate for the appellant that the amount of gain made
by the appellant, as recorded in the impugned order (table 19 at
paragraph 122) is 24,200/- only and that the direction for joint
and several liabilities is unsustainable. Adverting to Section 11B
of the SEBI Act, it was submitted that while issuing such
directions SEBI will have to consider actual gain made by the
noticees.
5. Shri Sumit Rai, learned Advocate for the respondent
adverted to paragraph 41.1 of impugned order and submitted
that appellant had permitted one Manoj Somani to operate his
account. The said admission is not denied by the learned
Advocate for the appellant.
6. It was also further submitted by Shri Rai, learned
Advocate for the respondent that the appellant had indulged in
more than one such case and he is a repeat offender and this fact
is also not denied.
7. Thus, in our view, the noticee who is a repeat offender and
who has permitted to use of his demat account by a third party
cannot claim equity with regard to the liability for
disgorgement. Hence, the prayer for interim order against 3
directions disgorgement contained in paragraph at 129.4 of the
impugned order stands rejected.
8. With regard to the other directions contained in paragraph
129, learned Advocate for the appellant submitted that there is
no power under Section 11B of the SEBI Act to attach bank
account. Shri Rai seeks time to file short reply within two weeks
from today. Granted. Liberty is reserved to the appellant to
move the Tribunal for consideration of the interim prayers after
the reply is filed by the respondent.
9. By consent, call on 12.03.2025.
Justice P.S. Dinesh Kumar Presiding Officer
Ms. Meera Swarup Technical Member
Dr. Dheeraj Bhatnagar Technical Member 06.01.2025 MADHUKAR Digitally signed by MADHUKAR BHALBAR
msb BHALBAR Date: 2025.01.10 16:38:00 +05'30'
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