TMI Blog2021 (3) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein held even if it is assumed that the information was is a price sensitive information, still the appellant cannot be blamed of insider trading for the reasons that he did not trade on the basis of the information . The appellant was able to show his dire need to infuse fund in the entity under the master restructuring agreement to implement a CDR package as detailed supra. He was even required to sell his agricultural land and flat details of which are already given hereinabove.appellants therein were able to rebut the presumption that they traded on the basis of UPSI as they had a necessity to sell the shares. In the present appeal before us, however, since all the facts are yet to be analysed by the respondent SEBI upon hearing the appellant, we do not propose to make any comment on the merit of the case at this stage. Accordingly, we quash and set aside the impugned Order, except as a Show Cause Notice (SCN), upon deposit of the amounts as specified below. Appellants are directed to file a reply to the SCN within four weeks from today. The respondent will decide the matter finally after giving an opportunity of hearing to the appellant either through physical heari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk accounts held jointly or severally by the persons mentioned under Table-11, except for the purposes of transfer of funds to the Escrow Account. Further, the Depositories are also directed that no debit shall be made, without permission of SEBI, in respect of the demat accounts held by the aforesaid persons. However, credits, if any, into the accounts maybe allowed. Banks and the Depositories are directed to ensure that all the aforesaid directions are strictly enforced. Further, debits may also be allowed for amounts available in the account in excess of the amount to be impounded. Banks are allowed to debit the accounts for the purpose of complying with this Order. 50. The persons mentioned under Table-11 are directed not to dispose of or alienate any of their assets/properties/securities, till such time the individual amount of unlawful loss avoided is credited to an Escrow Account except with the prior permission of SEBI. Further, on production of proof by the persons mentioned under Table-11 that the individual amount of unlawful loss avoided has been deposited in the Escrow Account, SEBI shall communicate to the Banks and Depositories to defreeze their respective account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reafter etc. are matters of record; in fact more funds have been transferred to the company than the sale proceeds and, therefore, there has been no diversion of funds in any manner whatsoever and, therefore, the appellants were trying to help the company to remain within business. It was submitted that since the revival efforts did not succeed, later on, the company has gone under liquidation. Therefore, the learned counsel contended that the investigation started in April 2018 and proceeded till end of 2019 during which a number of correspondences/replies etc. have been exchanged. Since there was nothing to hide, all the information, including that the appellants had made mandatory disclosures under relevant regulations such as SEBI (Prohibition of Insider Trading) Regulations ( PIT Regulations )/SEBI (Substantial Acquisition of Shares and Takeover) Regulations ( SAST Regulations ), and even the fact that no pre-clearances had been taken as the appellants genuinely considered no UPSI existed, were all disclosed. Since the appellants have been cooperating fully with SEBI there was no need for passing an ex-parte order without enabling the appellants to get the benefit of a show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestors need to be protected. 8. Having heard the learned counsel for the parties at reasonable length, we proceed to dispose of the appeal at the stage of admission itself without calling for reply/rejoinder etc. as this matter is squarely covered by our orders in Abhijit Rajan's case (supra) and Dr. Udayant Malhoutra's case (supra.) The relevant paragraph in our Order of Abhijit Rajan's care (supra) is reproduced below:- 13(2) Further, even if it is assumed that the information was is a price sensitive information, still the appellant cannot be blamed of insider trading for the reasons that he did not trade on the basis of the information . The appellant was able to show his dire need to infuse fund in the entity under the master restructuring agreement to implement a CDR package as detailed supra. He was even required to sell his agricultural land and flat details of which are already given hereinabove. In these circumstances he sold the shares. In the case of Rajiv B. Gandhi on fact this Tribunal held that the appellants therein were able to rebut the presumption that they traded on the basis of UPSI as they had a necessity to sell the shares. Similar is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is about to act with the intent to obstruct or delay the adjudication of the proceedings that may be passed against him. We are of the opinion that there is no finding that the appellant will remove the property or will dispose of all the property or that he would obstruct the proceedings or that he would delay the proceedings pursuant to the show cause notice. In the absence of any such finding, the ex-parte interim order cannot be sustained especially when the trades were of 2016 and from 2016 till the date of the impugned order there is no evidence to show that the appellant was trying to divert the alleged notional gain/loss. 11. As held in North End Foods Marketing Pvt. Ltd. (supra) there is no real urgency in the matter to pass an ex-parte interim order especially during the pandemic period. There is no doubt that SEBI has the power to pass an interim order and that in extreme urgent cases SEBI can pass an ex-parte interim 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 prima-facie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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