TMI Blog2020 (12) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy for passing an ex-parte interim order of the nature that was issued by the Whole Time Member. It was, in this background, that the Tribunal, while affirming the power of SEBI to pass an ex parte interim order in appropriate cases, observed that this should be exercised only in extreme urgent matters Since we have come to the conclusion that the Tribunal was on the facts of the case correct in setting aside the ex-parte order of the Whole Time Member on the ground that no urgency has been made out to sustain such an order, it is necessary for this Court to clarify that the interpretation which has been placed by the Tribunal on the powers of SEBI, particularly in paragraph 9 of the impugned order, which has been extracted above, shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price sensitive information. The respondent was directed by the Whole Time Member to credit the amount into an Escrow Account. 3 For the purpose of the present appeals, the facts lie in a narrow compass. The respondent is the Chief Executive Officer and Managing Director of the Company in question. It was alleged that he had sold 51,000 shares of the Company on 24 October 2016 having inside knowledge of price sensitive information, namely, the unaudited financial results of the quarter ending on 30 September 2016. It was alleged that the financial results were approved by the Board of Directors on 11 November 2016, upon which the price of the scrips of the Company sustained a drastic reduction. The allegation against the respondent was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m order but such powers can only be exercised sparingly and only in extreme urgent matters. In the instant case, we do not find any case of extreme urgency which warranted the respondent to pass an ex-parte interim order only on arriving at the primafacie case that the appellant was an insider as defined in the SEBI (Prohibition of Insider Trading) Regulations, 2015 ('PIT Regulations' for short) without considering the balance of convenience or irreparable injury. 5 On the facts before it, the Tribunal, in our view, was correct in coming to the conclusion that since the investigation was pending since 2017 and information had been supplied on 28 November 2019, there was no urgency for passing an ex-parte interim order of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), (2), (2A) and (3) and section 11B, the Board may, by an order, for reasons to be recorded in writing, in the interests of investors or securities market, take any of the following measures, either pending investigation or inquiry or on completion of such investigation or inquiry, namely:- (a) *** (b) *** (c) *** (d) impound and retain the proceeds or securities in respect of any transaction which is under investigation; 9 Since we have come to the conclusion that the Tribunal was on the facts of the case correct in setting aside the ex-parte order of the Whole Time Member on the ground that no urgency has been made out to sustain such an order, it is necessary for this Court to clarify that the interpretatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
