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2021 (1) TMI 1174 - HC - SEBIDelay of 5 years or more in initiating action by the SEBI - SEBI proceedings for companies act violations - Non-payment of dividends - Show-cause notice to the Company and its Directors calling upon the noticees as to why action under Section 11 and 11B of the SEBI Act, 1992 should not be initiated for violation of Section 205(1A) of the Companies Act, 1956 - HELD THAT:- In the case on hand, complaints with regard to non-payment of dividends were registered between 2010 and 2012. Annexure-D is the screen shot of the case status. It shows that SEBI has closed the complaints between 2013 and 2014. The show-cause notice is issued in October 20, 2016. No further action is taken till issuance of communication as per Annexure-B in 2019, calling upon the petitioner to remain present during the hearing. A perusal of the orders passed by Securities Appellate Tribunal shows that the said Tribunal has consistently held delay of five years and more in initiating action by the SEBI as unsustainable - even if petitioner is relegated to SEBI to attend the hearing as contemplated in communication Annexure-B and if petitioner were to suffer any adverse order, he can challenge the same before the Appellate Tribunal - Tribunal has decided the matter only on the point of delay without going into the merits. In this case, reckoned from the date of complaints, the delay is about four to six years in issuing the show-cause notice and seven to nine years in holding the hearing. In this case, no useful purpose would be served in relegating the petitioner to the SEBI. Hence, this petition merits consideration and it is accordingly allowed.
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