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2015 (8) TMI 485 - SECURITIES APPELLATE TRIBUNAL MUMBAINon-compliance of CIS regulation – Ex-parte order of termination was issued to protect rights of investors against Appellant’s activities considering it beyond ambit of CIS Regulations – Held that :-Respondent passed Impugned Order to protect interest of investors as per Sections 11(1), 11(4) and 11B read with Sections 11AA(1), 11AA(2) of SEBI Act, 1992 along with Regulation 65 of CIS Regulations of 1999 – Appellant who was directly and adversely affected by ex-parte interim impugned order had atleast legitimate expectation of getting opportunity of being heard before such directions were issued – Impugned Order was based more on speculative inferences rather than legal conclusions. Although, SEBI have power to pass ex-parte interim orders but it must do so only upon showing existence of circumstances which warrant such drastic measure – If Respondent, after conducting in-depth analysis of scheme comes to conclusion that schemes do not fall within ambit of CIS, Appellant would already have suffered irreparable loss due to its Members not being able to avail themselves of services offered by Appellant – Unless necessity or emergency of grave nature was shown by SEBI to take ex parte interim action in form of extreme directions there was no reason to halt business of Appellant especially in light when SEBI has not yet determined whether or not provisions of CIS were attracted to Appellant’s business – Impugned order cannot be sustained in eyes of law –Decided in favour of Appellant.
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