Vusa Ravi vs Sebi

Date of Decision : 27.07.2023

Misc. Application No. 904 of 2023 And Misc. Application No. 905 of 2023 And Appeal No. 624 of 2023

Vusa Ravi A/116, Chinna Venthurla, Mylavaram, Cudappah - 516432. ..... 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. Kunal Katariya, Advocate with Mr. Mahir Shah, Advocate i/b Triad Law Chambers for the Appellant.

Mr. Sumit Rai, Advocate with Mr. Manish Chhangani, Ms. Samreen Fatima, Mr. Sumit Yadav, Mr. Abhay Chauhan, Advocates i/b The Law Point for the Respondent.

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

Per : Justice Tarun Agarwala, Presiding Officer (Oral) 2

1.

The appellant has challenged the order dated April 28, 2023

passed by the Whole Time Member (hereinafter referred to as

'WTM') of Securities and Exchange Board of India (hereinafter

referred to as 'SEBI') directing the appellant to refund the money

received from any investors / clients in respect of his unregistered

investment advisory activities and further restrained him from

accessing the securities market directly or indirectly for a period of

two years from the date of completion of refund to clients / investors.

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

appellant was the sole proprietor of Global Advisors. On the basis of

certain complaints received from the clients of the appellant, SEBI

conducted an investigation and found that the appellant was engaged

in investment advisory services without obtaining a certificate of

registration in violation of Section 12(1) of the Securities and

Exchange Board of India Act, 1992 (hereinafter referred to as 'SEBI

Act') and Regulation 3 of the Securities and Exchange Board of

India (Investment Advisers) Regulations, 2013 (hereinafter referred

to as 'AI Regulations').

3. Accordingly, a show cause notice was issued to show cause as

to why suitable direction including the refund of fees collected,

debarment, etc. should not be issued under Section 11 and 11B of the 3 SEBI Act. After considering the material evidence on record and

after giving an opportunity of hearing to the appellant, the WTM

found that the appellant was carrying on investment advisory

services without obtaining a registration under Regulation 3(1) of the

IA Regulations.

4. We have heard Mr. Kunal Katariya, the learned counsel with

Mr. Mahir Shah, the learned counsel for the appellant.

5. Admittedly, the appellant was carrying on investment

advisory services without obtaining registration under Regulation

3(1) of the IA Regulations. This resulted in violation of Section

12(1) of the SEBI Act. The only contention raised by the appellant is

that the direction to refund is patently erroneous in as much as the

entire amount shown in the bank accounts was not towards advisory

services but was for other services. It was urged that these facts were

provided which aspect has not been considered.

6. In view of the admitted position, we are of the opinion that the

appellant was lending investment advice in an unauthorized manner

without getting registered under Regulation 3 of the IA Regulations,

2013. However, we find that the amount collected towards advisory

services needs to be crystalized.

4

7. For the reasons stated aforesaid, we do not find any manifest

error in the impugned order. The appeal fails and is dismissed.

However, with regard to the direction for refund, considering the

facts and circumstances that have been brought above, we direct the

appellant to move an appropriate representation within three weeks

from today giving details of the credit entries of the three bank

accounts and indicate with precision as to which amount relates to

advisory services and which amount does not relate to advisory

services. The authority will consider each and every entry and

thereafter crystalize the amount to be refunded within two months

thereafter.

8. 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 PRAMILA Digitally signed by PRAMILA 27.07.2023 TANAJI TANAJI MISAL PTM Date: 2023.07.28 MISAL 10:23:38 +05'30'