TMI Blog2020 (2) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2017 for the investigated period April 1, 2010 to January 10, 2011 which had been investigated in September 2011. We find that the respondents were aware of the alleged violation and thus there is no justification for waiting for more than five years to issue the second show cause notice dated July 20 2017. In our view there is an inordinate delay in initiating the proceedings. Without going into the question of res judicata or estoppel raised by the appellants we are of the opinion that on account of the inordinate delay in initiating the proceedings, the impugned penalty order cannot be sustained. Even on merits, we find that during the investigation period the observed variations in prices as well as of quantities traded are less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecurities Market) Regulations, 2003 ('PFUTP Regulations' for short). The AO found that the appellants had indulged extensively as a group executing match trades and self trades in a manipulative manner which had an element of fraud and unfair practice and therefore imposed a penalty under Section 15HA of the SEBI Act. 3. The facts leading to the filing of the appeals are that SEBI conducted investigation in the group of Shree Global Tradefin Ltd. for the period March 1, 2009 to November 30, 2009 and again investigated for the same scrip for the period April 1, 2010 to January 10, 2011. For the first investigation period a show cause notice dated April 20, 2012 was issued. The AO passed an order dated September 14, 2012 imposing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave issued a second show cause notice dated July 20, 2017. It was contended that the grounds for issuing the show cause notice is the same, namely, that the appellants have committed an offence of Regulation 3 and 4 of the PFUTP Regulations for match trades and self trades for the scrips of Shree Global Tradefin Ltd. and consequently the second show cause notice dated July 20, 2017 is barred by the principle of res judicata. It was urged that the principle of Order II Rule 2 of the Code of Civil Procedure would squarely apply in the instant case and consequently the respondents are estopped from initiating any proceeding pursuant to the second show cause notice. In support of his contention the learned counsel placed reliance upon a decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that the first show cause notice dated April 20, 2012 was issued to such noticees who were different to the noticees issued in the second show cause notice dated July 20, 2017. It was contended that barring a few noticees which were common there were other noticees which had no role to play in the scrip of the earlier investigated period. It was thus contended that there was separate cause of action and the principle of res judicata was not applicable. 9. The learned counsel for the respondent further contended that there is no inordinate delay in the initiation of the proceedings and as and when it was noticed the matter was investigated and thereafter the proceedings were initiated. It was also contended that this ground w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of limitation is prescribed in the Act or the Regulations for issuance of a show cause notice or for completion of the adjudication proceedings. The Supreme Court in Government of India v. Citedal Fine Pharmaceuticals, Madras and Others, [AIR (1989) SC 1771] held that in the absence of any period of limitation, the authority is required to exercise its powers within a reasonable period. What would be the reasonable period would depend on the facts of each case and that no hard and fast rule can be laid down in this regard as the determination of this question would depend on the facts of each case. This proposition of law has been consistently reiterated by the Supreme Court in Bhavnagar University v. Palitana Sugar Mill (2004) Vol.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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