2025 (6) TMI 540 - AT - SEBI

Delay of 100 days in filing the appeal against the SEBI confirmatory order - grounds pleaded by the Appellant seeking condonation of delay are that the appellant regularly travels to participate in various social purposes the appellant had medical appointments between the date of passing of the impugned order and filing this appeal and appellant had to change his advocates. HELD THAT - A combined reading of the application for condonation of delay and the affidavit dated November 13 2024 shows that appellant was negligent with regard to filing of this appeal. Applying the settled principle of law to the facts of this case we may record that appellant who was a Non-Executive Director and Chairman of a large business corporation cannot be heard to say that his travel schedules for social purposes some medical appointments in between the date of passing of the order and the filing the appeal; and his decision to change the Advocates has caused delay in filing this appeal. There is no sufficient cause to condone the delay by exercising our discretionary jurisdiction. In the result the said Misc. application for condonation of delay is dismissed.

Summary

The core legal issues considered by the Tribunal in this matter are:

• Whether the delay of 100 days in filing the appeal against the SEBI confirmatory order dated August 14, 2023, is liable to be condoned under the law.
• Whether the appellant has demonstrated sufficient cause to justify the delay in filing the appeal.
• Whether the appellant's grounds for delay, including frequent travel for social purposes, medical appointments, and change of advocates, constitute adequate reasons for condonation of delay.
• The applicability and interpretation of relevant precedents and legal principles governing condonation of delay, particularly the meaning of "sufficient cause" in the context of limitation laws.

Issue-wise Detailed Analysis

1. Delay in Filing the Appeal and Condonation of Delay

Relevant Legal Framework and Precedents: The Tribunal considered the principles related to condonation of delay as laid down in various Supreme Court decisions, including Basawaraj v. Special Land Acquisition Officer and Pathapati Subba Reddy v. Special Deputy Collector. These decisions emphasize that "sufficient cause" for delay must be bona fide, reasonable, and not due to negligence or lack of diligence. The Court must exercise discretion judiciously, ensuring that the delay is not a device to prolong litigation.

The appellant relied on Ningappa Thotappa Angadi v. Special Land Acquisition Officer, where the Supreme Court condoned delay in land acquisition cases on grounds of parity and just compensation. However, the Tribunal distinguished this precedent, noting that it arose under special plenary powers of the Supreme Court under Article 142 of the Constitution and dealt with land acquisition matters, which are factually and legally distinct from securities regulation cases. The Tribunal held that parity grounds applicable in land acquisition do not extend to SEBI regulatory matters.

Court's Interpretation and Reasoning: The Tribunal scrutinized the appellant's reasons for delay, which included frequent travel for social welfare activities, medical appointments, and changing advocates. The appellant provided an affidavit detailing extensive travel between August 12, 2023, and January 5, 2024, including visits to various Indian cities and foreign countries. The appellant also listed medical appointments during this period and cited court closures due to Diwali and Christmas vacations as contributing factors.

However, the Tribunal identified inconsistencies in the appellant's affidavit, notably the claim that he was outside Mumbai between August 12 and 23, 2023, while simultaneously stating he had a medical appointment in Mumbai on August 14, 2023, without producing travel records to substantiate presence in Mumbai on that date. This discrepancy undermined the credibility of the appellant's explanation.

The Tribunal emphasized that the appellant, being a Non-Executive Director and Chairman of a major corporation, was expected to exercise due diligence in filing the appeal timely. The reasons offered were deemed insufficient and indicative of negligence rather than unavoidable circumstances.

Key Evidence and Findings: The appellant's affidavit and travel itinerary, medical appointment records, and lack of corroborative evidence for presence in Mumbai on certain dates were critical evidentiary points. The Tribunal found the appellant's explanations vague, unsubstantiated, and contradictory.

Application of Law to Facts: Applying the settled principles from Basawaraj and Pathapati Subba Reddy, the Tribunal held that the appellant failed to demonstrate "sufficient cause" for the delay. The delay was not satisfactorily or convincingly explained, and the reasons did not meet the threshold of bona fide or unavoidable circumstances. The Tribunal also rejected the appellant's reliance on Ningappa as inapplicable.

Treatment of Competing Arguments: The appellant argued that the delay was due to unavoidable circumstances beyond control, including travel for social welfare, medical issues, and advocate change, and relied on a prior Tribunal order in a related case involving his son. The respondent SEBI countered that these reasons were vague, unsupported by evidence, and that the appellant was fully aware of the investigation and order timelines. SEBI emphasized that delay should not be condoned merely on sympathetic grounds and cited authoritative precedents to support strict adherence to limitation rules.

2. Applicability of Precedents and Legal Principles

The Tribunal carefully distinguished the appellant's reliance on Ningappa Thotappa Angadi, noting it was a land acquisition case where delay was condoned to uphold parity and just compensation, and involved the Supreme Court's plenary powers under Article 142. The Tribunal clarified that such exceptional principles do not apply to SEBI regulatory proceedings.

The Tribunal relied heavily on Basawaraj and Pathapati Subba Reddy, which establish that "sufficient cause" must be adequately explained with bona fide reasons, and delay cannot be condoned merely on sympathetic or vague grounds. The Tribunal reiterated that the law of limitation is rooted in public policy to ensure finality of litigation.

3. Conduct and Due Diligence of the Appellant

The Tribunal noted that the appellant's conduct displayed negligence. Despite being a senior corporate figure, the appellant failed to act diligently in filing the appeal within the prescribed 45-day period. The reasons given were insufficient to justify the 100-day delay, and the appellant's inconsistent statements further weakened his case.

Conclusions

The Tribunal concluded that the appellant did not demonstrate sufficient cause for delay. The explanations were vague, contradictory, and unsupported by evidence. The appellant's negligence and lack of bona fide effort to prosecute the appeal in time were evident. The Tribunal declined to exercise its discretionary jurisdiction to condone the delay.

Significant Holdings

"Sufficient cause is the cause for which defendant could not be blamed for his absence. The meaning of the word 'sufficient' is 'adequate' or 'enough', inasmuch as may be necessary to answer the purpose intended. Therefore, the word 'sufficient' embraces no more than that which provides a platitude, which when the act done suffices to accomplish the purpose intended in the facts and circumstances existing in a case, duly examined from the view point of a reasonable standard of a cautious man."

"The applicant must satisfy the Court that he was prevented by any 'sufficient cause' from prosecuting his case, and unless a satisfactory explanation is furnished, the Court should not allow the application for condonation of delay."

"Delay is not to be condoned merely because some other persons have been granted relief. The law of limitation is based upon public policy and there should be an end to litigation by forfeiting the right of remedy rather than the right itself."

"The appellant, who was a Non-Executive Director and Chairman of a large business corporation, cannot be heard to say that his travel schedules for social purposes, some medical appointments in between the date of passing of the order and the filing the appeal; and his decision to change the Advocates has caused delay in filing this appeal."

"There is no sufficient cause to condone the delay by exercising our discretionary jurisdiction."

Consequently, the Tribunal dismissed the miscellaneous application for condonation of delay and the appeal itself.