Dr. Uppal Devinder Kumar vs Sebi on 23 June, 2016

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Securities Appellate Tribunal

Dr. Uppal Devinder Kumar vs Sebi on 23 June, 2016

Bench: J.P. Devadhar

BEFORE THE              SECURITIES APPELLATE TRIBUNAL
                              MUMBAI
                                                              Date : 23/06/2016

                                     Appeal No.87 of 2016

Dr. Uppal Devinder Kumar
58B, Raghunath Enclave,
Aggar Nagar A,
Ludhiana, Punjab.                                        ... Appellant

       Versus

Securities and Exchange Board of India
SEBI Bhavan, Plot No.C-4A, G-Block,
Bandra-Kurla Complex, Bandra (East),
Mumbai - 400 051.                                        ... Respondent


Mr. Somasekhar Sundaresan a/w Mr. Paras Parekh and Mr. Dhaval Kothari,
Advocates i/b J. Sagar Associates for the Appellant.

Mr. Shyam Mehta, Senior Advocate a/w Mr. Saurabh Bachhawat, Advocate i/b
K. Ashar & Co. for the Respondent.

CORAM :       Justice J.P. Devadhar, Presiding Officer
              Jog Singh, Member
              Dr. C.K.G. Nair, Member

Per : Justice J.P. Devadhar (Oral)


1.

The Appellant is aggrieved by the order passed by the Adjudicating Officer ("AO" for short) of the Securities and Exchange Board of India ("SEBI" for short) on 2nd February, 2016. By the said order, the Appellant is directed to pay Rs.2,31,50,000/- under Section 15HA of the Securities and Exchange Board of India Act ("SEBI Act" for short) for violating Section 12(1B) of SEBI Act.

2. The grievance of the Appellant all along had been that he was never appointed as a Director of PACL Ltd. and even PACL Ltd. had not made any filings before the Registrar of Companies stating that the Appellant was a Director of PACL Ltd.

3. In spite of the specific stand taken by the Appellant to the above effect, the AO of SEBI has rejected the contention of the Appellant in para 24.6.9 & 24.6.10 of the impugned order by merely recording that there is no reason to disbelieve the findings recorded in the investigation report. The impugned order does not set out the basis on which the investigation report considers that the Appellant had acted as a Director of PACL Ltd. In any event, without considering the merits of the investigation report qua the register maintained by the Registrar of Companies and recording a specific finding, the AO could not have held that the Appellant had acted as a Director of PACL Ltd. Assuming that there was any material in the investigation report to suggest that the Appellant had acted as a Director, then the AO ought to have given an opportunity to the Appellant to deal with that evidence. In the absence of any such opportunity given, the AO is not justified in holding that the Appellant had acted as a Director of PACL Ltd. and impose penalty on the Appellant along with other Directors of PACL Ltd.

4. For the aforesaid reasons, we quash and set aside the impugned order qua the Appellant and restore the matter to the file of AO of SEBI for passing fresh order on merits and in accordance with law.

5. Appeal is disposed of in the above terms with no order as to costs.

Sd/-

Justice J.P. Devadhar Presiding Officer Sd/-

Jog Singh Member Sd/-

Dr. C.K.G. Nair Member 23/06/2016 Prepared & compared by-ddg

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