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SAT HAS MADE MOCKERY OF APPEALS – PATENTLY WRONG ORDERS OF THE SECURITIES APPELLATE TRIBUNAL MUMBAI (SAT) – DIRECTING APPELLANTS TO FILE SETTLEMENT APPLICATION WITHIN SHORT TIME THOUGH SCHEME PROVIDE LONGER TIME. |
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SAT HAS MADE MOCKERY OF APPEALS – PATENTLY WRONG ORDERS OF THE SECURITIES APPELLATE TRIBUNAL MUMBAI (SAT) – DIRECTING APPELLANTS TO FILE SETTLEMENT APPLICATION WITHIN SHORT TIME THOUGH SCHEME PROVIDE LONGER TIME. |
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SAT- THE SECURITIES APPELLATE TRIBUNAL MUMBAI SEBI is a powerful institution supposed to protect interest of investors. SEBI have powers inter alia to pass several type of orders. Some administrative and quasi judicial orders are passed by SEBI through its officers as per different regulations. SAT is the first Appellate Authority to hear and decide appeals filed against orders of SEBI. Appeal against orders of SAT is provided only before the Supreme Court. Recent orders of SAT in appeals: Large number of orders have been passed by the SAT on 23.08.2022 and many other days. For example: Date of Decision : 23.08.2022 Appeal No. 341 of 2022 Ajay Kumar Baid 12B, Lord Sinha Road, Shyam Kunj, Flat No. 08, 4th Floor, Kolkata – 700 071 ….Appellant Securities & Exchange Board of India SEBI Bhavan, Plot No. C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. … Respondent.
Some other similar orders: Misc. Application No. 548 of 2022 And Appeal No. 398 of 2022 Sanjay Godha 167B, Gayatri Nagar, B Maharani Farm, Jaipur – 302 018. ….Appellant Versus Securities & Exchange Board of India SEBI Bhavan, Plot No. C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. … Respondent Misc. Application No. 645 of 2022 And Appeal No. 393 of 2022 Vinod Kumar Agarwal HUF HB Villa, C-9, Country Club Compound, Beside Onyx Vertica, Khamardhih, Raipur – 492 001, Chhattisgarh. ….Appellant Versus Securities & Exchange Board of India SEBI Bhavan, Plot No. C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. … Respondent. These judgments and many others are found from the website of SAT- http://sat.gov.in/scripts/search.asp The author is fully aware of this case as it was discussed by him with Smt. Uma Kothari, FCA Counsel of Appellant Shri Ajay Kumar Baid. This is also recorded in the order. To cut short the nature of order salient portions of order of SAT are reproduced below with highlights added by author: BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date of Decision : 23.08.2022 Appeal No. 341 of 2022 Ajay Kumar Baid 12B, ….Appellant VS Securities & Exchange Board of India Respondent Ms. Uma Kothari, CA for the Appellant. Mr. Abhiraj Arora, Advocate with Mr. Deepanshu Agarwal, Mr. Shourya Tanay, Advocates i/b ELP for the Respondent. CORAM : Justice Tarun Agarwala, Presiding Officer Justice M. T. Joshi, Judicial Member Ms. Meera Swarup, Technical Member Per : Justice Tarun Agarwala, Presiding Officer (Oral) 1. An affidavit has been filed by the respondent indicating that a settlement scheme has been issued in terms of Regulation 26 of Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018 which is called SEBI Settlement Scheme, 2022 wherein an opportunity for settlement has been provided to the entities who have executed reversal trades in the stock option segment of Bombay Stock Exchange Ltd. during the period April 1, 2014 to September 30, 2015. 2. In view of the aforesaid, we dispose of the appeal directing the appellant to file an appropriate application for settlement before the authority concerned within two weeks from today. If the same is filed, the authority will accept the settlement application in terms of proposed SEBI Settlement Scheme 2022 as an application filed in a pending proceeding and pass appropriate orders. The appeal is disposed of. Justice Tarun Agarwala Presiding Officer , Justice M. T. Joshi Judicial Member, Ms. Meera Swarup Technical Member 23.08.2022 PTM RAJALA KSHMI H NAIR Digitally signed by RAJALAKSHMI H NAIR Date: 2022.08.27 10:05:42 +05'30 Unquote: From the above order it is crystal clear that the SAT has not at all and in any manner has not considered appeal of appellant. Large number of similar orders have been passed on the same day and many other days – as per cause list cases serial no. 3-53 and many others may be there were decided. For each of case separate order has been passed. In the case of Ajay Kumar Baid CA Uma Kothari was present. Similarly in other cases Authorized Representatives were present. From the orders it is clear that although presence of Counsel is mentioned in the order , but there was no hearing of the case on behalf of appellant. In the cause list similar cases appears under heading: 852-ADMISSION-COURTCODE-ILLIQUIDSTOCKOPTION-11.08 AM. Serial no. 3-53 are under this heading. The time is fixed at 11.08AM The next heading in cause list is as follows: 939-ADMISSION-COURTCODE-DECCANWTM-AT 11.15A.M For these cases time fixed in 11.15 A.M This means that for 51 cases total time allotted was just seven minutes. This itself shows that SAT has preset mind about order to be passed without any factual hearing. Is it not a simple case of mockery. From the order it is crystal clear that simply on the basis of affidavit of Respondent/ SEBI directions have been issued to appellants to file application for settlement. In this way, we can say that SAT HAS MADE MOCKERY OF APPEALS Now questions are that: Although SEBI and SAT may be considered as very power full institution but how they derive power for: Issuing directions to appellants to file settlement applications? How time to file settlement application can be restricted to two weeks from date of hearing and order? The Settlement scheme will be opened on 22.08.22 and will end on 21.11.2022, AS PER PUBLIC NOTICE available on https://www.sebi.gov.in/media/public-notices/aug-2022/public-notice-in-respect-of-sebi-settlement-scheme.
Non consideration of even grounds of appeal: SAT has not at all considered grounds of appeal filed, brief notes filed and detailed submission filed, well in time before hearing. This clearly shows a case of mockery of appeals by SAT. The order passed by adjudicating authority was also in nature of mockery . In the case of Ajay Kumar Baid brief note was filed on following lines: Brief of submissions SEBI is an authority expected to act on real time basis and in any case within reasonable time to protect interest of traders and investors by regulating various parties and agencies mentioned in S.12 and 12A of SEBI Act and who are required to be registered with SEBI. Appellant is not a person covered by S.12 of SEBI Act and is not required to be registered with SEBI. So SEBI has no jurisdiction to issue any SCN and order to levy penalty on appellant. SCN was void being non-specific of charges and provision , omnibus and vague notice. It was time barred due to unreasonable delay from date of impugned transactions. A reasonable and short limit need to be applied when matter relates to general public and small persons like appellant whose transactions are miniscule. Case of appellant does not fall in any of provisions for which SCN was issued and penalty order has been passed. Transactions done by appellant were permitted and carried on portal of BSE , so these were not prohibited transactions or deals, so no penalty can be imposed. There is no complainant claiming loss suffered by him due to dealings of appellant. Maximum penalty can be up to three times of profits , if any , earned by prohibited dealing. There was no prohibited dealing and there is no unfair profit earned so minimum and maximum penalty will be NIL . And not Rs. Five lakh , minimum penalty as assumed by the learned Adjudicating Officer (in short AO). Without proper quantification base for amount of penalty and without pointing out related provision and amount of penalty , penalty levied is void. As I understand many of vital grounds and contentions raised by me have not been decided by learned AO and in earlier orders of SAT, therefore, kindly consider my entire case thoroughly without applying any precedence in a routine and mechanical manner as has been done by the Ld. AO If the appeal was considered properly, the order of AO was likely to be declared void. SAT has failed in discharging its duty: From these orders it can be said that SAT has completely failed in discharging its onerous duties and responsibilities. SAT is charging substantial fees for filing of appeal from appellants. It can be said that SAT has not acted and worked in a manner which is expected by appellants who have also paid substantial fees. Problem of Appellants: Appellants in similar cases are small traders and investors. They cannot afford to file and pursue appeal before the Supreme Court in such small matters. Perhaps considering such helplessness of similar appellants, the Adjudicating Authority and SAT are passing orders totally in unjust manner. Thus , public feeling is that SEBI is not a protector of investors rather it is acting as looter in legal but unjustified manner. SAT is also helping SEBI in such loot. The loot is further extended when we find that a substantial fees and GST is payable even for a settlement application. The amount payable in settlement is also huge and disproportionate to gains, if at all made , by appellants which is considered and alleged to be unfair gains, in presumptive manner. The article is written with assitance of CA Uma Kothari, who represented the case before SAT.
By: DEV KUMAR KOTHARI - September 13, 2022
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