Securities Appellate Tribunal
Vijay Kumar Sood vs Sebi on 3 January, 2023
Author: Tarun Agarwala
Bench: Tarun Agarwala
BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Date of Hearing : 08.07.2022
Date of Decision : 03.01.2023
Misc. Application No. 343 of 2021
And
Misc. Application No. 81 of 2021
And
Misc. Application No. 73 of 2021
And
Misc. Application No. 67 of 2021
And
Misc. Application No. 230 of 2015
And
Appeal No. 157 of 2015
1.M/s. MVL Ltd.
1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi - 110019.
2. Shri Prem Adip Rishi, Managing Director, M/s. MVL Limited, 1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi - 110019.
3. Mr. Praveen Kumar, Director, M/s. MVL Limited, 1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi - 110019.
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4. Mr. Rakesh Gupta, Director, M/s. MVL Limited, 1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi - 110019.
5. Mr. Vinod Malik Director, M/s. MVL Limited, 1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi - 110019.
6. Mr. Vinod Kumar Khurana, Director, M/s. MVL Limited, 1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi - 110019.
7. Ms. Kalpana Gupta, Director, M/s. MVL Limited, 1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi - 110019. .....Appellants Versus
1. Securities and Exchange Board of India SEBI Bhavan, Plot No. C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051.
2. Mr. Abhinandan Kumar Abhinanadan Villa, Near Punjab National Bank, Ward No. 15, Pili Bangan, Jaipur - 335 803. ... Respondents 3 Mr. Amish Tandon, Advocate for the Appellant Nos. 1. Mr. Ashwin Ankhad, Advocate with Mr. Naresh Ratnani, Advocate i/b Ashwin Ankhad & Associates for the Appellant Nos. 2 to 4.
Mr. Shantanu Mitra, Advocate for the Appellant Nos. 5 to 6. Mr. Akash Menon, Advocate with Ms. Sukanya Banerjee, Advocate for the Appellant Nos. 7.
Mr. Kevic Setalvad, Senior Advocate with Mr. Mihir Mody, Mr. Arnav Misra, Mr. Mayur Jaisingh, Advocates i/b K. Ashar & Co. for the Respondent Nos. 1.
None for the Respondent Nos. 2.
With Misc. Application No. 333 of 2015 And Appeal No. 158 of 2015
1. Uma Upadhyay W/o Shanti Swarup Upadhyay F-5, Lawyers Colony, Bye Pass Road, Agra, Uttar Pradesh.
2. Deepti Bhardwaj W/o Shri Sharad Bhardwaj, 8/117-D, New Layers Colony, Kushalpur, Agra, Uttar Pradesh.
3. Jim George Mathew S/o Shri Mathew George, 1083, 8th Floor, Block - I, Consulting Engineers CGHS Ltd., 4 Plot No. 11, Sector - 18A, Dwarka, New Delhi.
4. Birhmwati W/o Shri Dharamvir Singh, House No. K-6068, Devender Vihar, Sector 56, Gurgaon, Haryana. .....Appellants Versus
1. Securities and Exchange Board of India SEBI Bhavan, Plot No. C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051.
2. M/s. MVL Ltd.
1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi - 110019. ... Respondents Mr. Shailesh Dalal, Advocate for the Appellants. Mr. Kevic Setalwad, Senior Advocate with Mr. Mihir Mody, Mr. Arnav Misra, Advocates i/b K. Ashar & Co. for the Respondent Nos. 1.
None for the Respondent Nos. 2 to 4.
With Misc. Application No. 581 of 2020 (Delay Application) And Appeal No. 21 of 2021 Vijay Kumar Sood S/o Late Shanti Sarup Sood A 24 CEL Apartments, 8-14 Near Dharamshila Cancer Hospital, 5 Vasundhra Enclave, Delhi- 110096. .....Appellant Versus
1. Securities and Exchange Board of India SEBI Bhavan, Plot No. C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051.
2. M/s. MVL Ltd.
1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi - 110019.
3. Mr. Prem Adip Rishi F-79/18, W1 Lane, Sainik Farms, Khanpur, New Delhi - 110062.
4. Mr. Praveen Kumar 1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi-110019.
5. Mr. Rakesh Gupta 113 Laxmi Apartments, Sector-9, Rohini, New Delhi 110085.
6. Mr. Vinod Malik 1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi-110019.
7. Mr. Vinod Kumar Khurana B-6/67, G.F., Safdarjung Enclave, New Delhi - 110029.
8. Ms. Kalpana Gupta 65A, Pocket A, Dilshad Garden, New Delhi - 110095. ... Respondents Mr. Salim A. Inamdar, Advocate with Mr. Modassir Husain Khan, Mr. Abhishek Thakral, Advocates for the Appellant. 6 Mr. Kevic Setalwad, Senior Advocate with Mr. Mihir Mody, Mr. Arnav Misra, Mr. Mayur Jaisingh, Advocates i/b K. Ashar & Co. for the Respondent Nos. 1.
None for the Respondent Nos. 2 to 8.
With Misc. Application No. 582 of 2020 (Delay Application) And Appeal No. 22 of 2021 Vijay Kumar Sood S/o Late Shanti Sarup Sood A 24 CEL Apartments, 8-14 Near Dharamshila Cancer Hospital, Vasundhra Enclave, Delhi- 110096. .....Appellant Versus
1. Securities and Exchange Board of India SEBI Bhavan, Plot No. C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051.
2. M/s. MVL Ltd.
1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi - 110019.
3. Mr. Prem Adip Rishi F-79/18, W1 Lane, Sainik Farms, Khanpur, New Delhi - 110062.
4. Mr. Praveen Kumar 1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi-110019.
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5. Mr. Rakesh Gupta 113 Laxmi Apartments, Sector-9, Rohini, New Delhi 110085.
6. Mr. Vinod Malik 1201-B, Hemkunt Chamber, 89, Nehru Place, New Delhi-110019.
7. Mr. Vinod Kumar Khurana B-6/67, G.F., Safdarjung Enclave, New Delhi - 110029.
8. Ms. Kalpana Gupta 65A, Pocket A, Dilshad Garden, New Delhi - 110095. ... Respondents Mr. Salim A. Inamdar, Advocate with Mr. Modassir Husain Khan, Mr. Abhishek Thakral, Advocates for the Appellant. Mr. Kevic Setalwad, Senior Advocate with Mr. Mihir Mody, Mr. Arnav Misra, Advocates i/b K. Ashar & Co. for the Respondent Nos. 1.
None for the Respondent Nos. 2 to 8.
CORAM : Justice Tarun Agarwala, Presiding Officer Justice M. T. Joshi, Judicial Member Ms. Meera Swarup, Technical Member Per : Justice M. T. Joshi, Judicial Member
1. Learned Whole Time Member (hereinafter referred to as 'WTM') of the respondent Securities and Exchange Board of India (hereinafter referred to as 'SEBI') passed order dated December 19, 8 2014. Vide this order, the respondent held that the activity of appellant MVL Ltd. (hereinafter referred to as 'MVL') in respect of construction of a project called as India Business Centre (hereinafter referred to as 'IBC') at Gurgaon was in the nature of Collective Investment Scheme (hereinafter referred to as 'CIS') as defined by Section 11AA of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as 'SEBI Act'). As the said scheme was being continued without registration of the same as provided by Section 12(1B) of the SEBI Act by invoking the powers under Section 19 read with Sections 11(1), 11(4) and 11B of the SEBI Act and Regulation 65 of Securities and Exchange Board of India (Collective Investment Scheme) Regulations, 1999 (hereinafter referred to as 'CIS Regulations'), various directions were issued to appellant MVL alongwith its directors. Aggrieved by the said order, Appeal No. 157 of 2015 is preferred by appellant MVL as well as its directors.
2. Vide the said order, respondent SEBI directed these appellants to abstain from collecting any money from the investors, to wind up the existing CIS, to refund the monies collected under the scheme within a period of three months, not to alienate or dispose of 9 any assets of MVL except for making refund to make inventory of the assets owned by MVL. Beside this, appellant MVL and other appellants were restrained from accessing securities market till the said CIS would be wound up. SEBI also reserved its right to make reference to the State Government / Local Police.
3. Appeal No. 158 of 2015 is filed by appellant Uma Upadhyay and Ors. for quashing of the order on the ground that they are the buyers in the said project and the project was not CIS. Appeal Nos. 21 of 2021 and 22 of 2021 were filed by one of the directors of appellant MVL, Mr. Vijay Kumar Sood who had earlier not challenged the impugned order with an application for condonation of delay of 2149 days. In another Appeal No. 22 of 2021, he has also challenged the recovery proceeding started by the respondent SEBI on the basis of the earlier order.
4. Respondent Nos. 2 Abhinandan Kumar got himself impleaded as respondent nos. 2. It appears that in the Company Petition filed by this appellant in the High Court of Delhi, appellant MVL is liquidated and the Official Liquidator was appointed on July 5, 2018. In the situation, though earlier Appeal No. 157 of 2015 was filed by the appellant MVL by Mr. Sushil Aggarwal, authorised 10 representative of the MVL and also of other appellants, the appeal is now continued by the Official Liquidator of MVL.
5. Central issue is as to whether the IBC project undertaken by the appellants at Gurgaon fall within the definition of CIS. SEBI conducted investigation and made queries with appellant MVL and collected documents from it regarding the various agreements it has entered into with the investors. After hearing the appellants, learned WTM concluded that the project was nothing but a CIS falling within the definition of Section 11AA of the SEBI Act. Hence the present appeals.
6. We have heard Mr. Amish Tandon, Mr. Ashwin Ankhad, Mr. Naresh Ratnani, Mr. Shailesh Dalal, Mr. Salim A. Inamdar, Mr. Modassir Husain Khan, Mr. Abhishek Thakral, Mr. Shantanu Mitra, Mr. Akash Menon, Ms. Sukanya Banerjee, the learned counsel for the appellants and Mr. Kevic Setalvad, the learned senior counsel with Mr. Mihir Mody, Mr. Arnav Misra, Mr. Mayur Jaisingh, the learned counsel for the respondent Nos. 1 SEBI.
7. The case of the appellants is that MVL is a real estate developer. In its usual course of business, it offers sale of flats, IT 11 space, plots and villas in various parts of the country at a price fixed. IBC was one of such ventures. It purchased land, procured permission for change of land used from the Haryana Authority. It was permitted to set up an IT Project over the said land which was governed by Haryana Apartment Ownership Act. It had sold IT / cyber spaces in the IBC project of different sizes to 232 buyers under assured return plan. About 17 allottees invested under construction link installment plan under assured return from IBC under the scheme of the project. The application for provisional registration was required. Certain amount as an advance for the space allotted to the applicant was to be made. The location or number of IT Cyber spaces was tentative as the building plans approved by the competent authorities was subject to change depending on additional needs of the project. Further, on completion of the project, the right, title and interest in the premises was to be transferred on execution of sale deed in favour of the buyer.
8. The learned WTM took into consideration the contents of the application form. The option of buyback / lease found in the form was considered. Further, copy of the sample Assured Return Agreement (hereinafter referred to as 'ARA') was also considered. 12 The conduct of the appellant MVL that layout plan not forming part of the customer, non-inclusion of any definite identified spaces was considered and it was concluded that the project was nothing but a CIS.
9. Section 11AA of the SEBI Act defines the "CIS" as under :-
"11AA. Collective investment scheme -- (1) Any scheme or ar-rangement which satisfies the conditions referred to in sub-section (2) [or sub-section (2A)] shall be a collective investment scheme.
[Provided that any pooling of funds under any scheme or arrangement, which is not registered with the Board or is not covered under sub-section (3), involving a corpus amount of one hundred crore rupees or more shall be deemed to be a collective investment scheme.] (2) Any scheme or arrangement made or offered by any [person] under which,--
(i) the contributions, or payment made by the investors, by whatever name called, are pooled and utilized for the purposes of the scheme or arrangement;
(ii) the contributions or payments are made to such scheme or arrangement by the investors with a view to receive profits, income, produce or property, whether movable or immovable, from such scheme or arrangement;
(iii) the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors;13
(iv) the investors do not have day-to-day control over the management and operation of the scheme or arrangement.
[(2A) Any scheme or arrangement made or offered by any person satisfying the conditions as may be specified in accordance with the regulations made under this Act.] (3) Notwithstanding anything contained in sub-
section (2),[or sub-section (2A)], any scheme or arrangement --
(i) made or offered by a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912) or a society being a society registered or deemed to be registered under any law relating to co-operative societies for the time being in force in any State;
(ii) under which deposits are accepted by non-banking finan-cial companies as defined in clause (f) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934);
(iii) being a contract of insurance to which the In-surance Act, 1938 (4 of 1938), applies;
(iv) providing for any scheme, pension scheme or the in-surance scheme framed under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952);
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(v) under which deposits are accepted under section 58A of the Companies Act, 1956 (1 of 1956);
(vi) under which deposits are accepted by a company declared as a Nidhi or a Mutual Benefit Society under section 620A of the Companies Act, 1956 (1 of 1956);
(vii) falling within the meaning of chit business as defined in clause (e) of section 2 of the Chit Funds Act, 1982 (40 of 1982);
(viii) under which contributions made are in the nature of subscription to a mutual fund,
(ix) such other scheme or arrangement which the Central Government may, in consultation with the Board, notify,] shall not be collective investment scheme.]"
10. Though Section 11AA provides that beside the conditions provided therein any other scheme or arrangement as may be specified according to the Regulations made by SEBI would also CIS. It appears that no additional conditions are not prescribed by SEBI in the CIS Regulations.
11. The application form to be filled in by the applicant specified the area in sq. ft. and floor number. However, space 15 number is not identified in the application form. The application also recites that the developer would not be bound to give any specific unit number of the space to be allotted to the applicant. Even application makes it clear that the applicants are making application with knowledge that they are not obtaining any specific unit of space.
12. The assured return plan, also shows that only the area and floor is mentioned in the same. It shows that the appellants had offered to pay assured return at the rate of Rs. 10 per sq. ft. per month till the receipt of full consideration. Further, upon payment of full consideration the assured return is applicable at the rate of Rs. 42 per sq. ft. per month. The existing possession is delivered and the lease commences and the rental is received by allottees by the applicants. In this ARA, the provision of buy-back is given. It provides that after expiry of 30 months from the date of ARA the applicant gets an option for cancellation of the cyber space allotted to the applicant. He would be entitled to receive the buy-back price with a simple interest at the rate of 5%. The appellant MVL submitted before the respondent SEBI that only 46 customers opted this buy-back plan.
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13. Regarding the claim of the appellant MVL that it was a regular business of developing property and selling the same, the respondent SEBI observed that unlike such real estate transaction, in the present case, there was no clearly demarcated area. Further, lay- out plan or floor plans which were submitted to respondent SEBI were not forming part of the agreements with the customers. During personal hearing the appellant MVL was advised to submit the floor plan of the project and to mark the unit allotted to its investors. Upon perusal of the floor plan, the learned WTM observed that area allotted to each of the investor did not match with the floor plan.
14. The learned WTM took the samples of ARA and buyer's agreement for two clients, Manoj Kumar and Dinesh Chand as submitted by the appellant. In so far as Manoj Kumar's case is concerned, he had applied for IT space no. 610 admeasuring 500 sq. ft. on 6th floor. Mr. Dinesh Chand had applied for unit no. 625 admeasuring 500 sq. ft. on 6th floor. However, in the floor plan filed by the appellant MVL, it was found that on 6th floor, there was no unit nos. 610 and 625. On the other hand, the number of units given on the 6th floor were numbered as 01 to 137. Further, the sample documents were also perused of applicant / client no. 156. It was 17 observed that the said client was given buy-back option after 30 months subject to realisation of 100% of the total payment and ultimately after 30 months, the investors would get 96% return as a buy-back offer investment. In another case of a client at serial no. 157, it was found that under buy-back scheme, the client was to get only 15.5% of the total investment. This was against the arguments of the appellant MVL that it has prescribed 5% simple interest on the total investment made by the investors under this scheme.
15. The learned counsel for the Official Liquidator strenuously contended that like any other development project, the appellant has collected amount from the investors, got the land developed and started to make construction over the same. After construction, for initial period the unit was to be lease by the investor and thereafter the investor was free to enjoy his specific space. Even provision of conveyance is clearly recited in all the documents as it recites "upon registration of conveyance, allottee would acquire undivided and impartible share in the land". ARA was opted by such persons who did not wish to use the space for personal use but wanted to earn income from the same. Clause 4 of ARA clearly contemplated the registration of the conveyance.
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16. So far as the Mr. Manoj Aggarwal and Dinesh Chand is concerned, it was argued, the agreement permitted the allottee, to carry out interior work in his space. Conveyance deed was also contemplated in this agreement.
17. The learned counsel for the appellants in Appeal No. 158 of 2015 has supported the submissions made by the learned for the appellant MVL.
18. Appellant Nos. 5, 6 and 7 in Appeal No. 157 of 2015 filed their separate written submissions. They submitted that earlier they had given authority to Mr. Sushil Agarwal, Vice President of MVL. Upon liquidation of the said company to file the present appeal, the Official Liquidator did not argue on behalf of the appellants. They want to put their case separately to show that they cannot be made personally liable. Similar, is the case of the appellant Vijay Kumar Sood who has filed the appeals later on in the year 2021.
19. The learned counsel for the appellant MVL further submitted that in the case of one Purvankara Project Ltd. (hereinafter referred to as 'Purvankara'), respondent SEBI vide its informal guidance letter dated May 5, 2014 had informed the said entity that 19 it's a similar project would not attract the provisions of Section 11AA of the SEBI Act. The copy of the said letter is filed on record. The learned counsel for the respondent however pointed out that the representation made by Purvankara showed that definite property was to be conveyed to the allottee and further the informal guidance was issued on the basis of the fact mentioning the said request and is liable to be changed in case the facts would be different. We find that in the case of Purvankara the informal guidance was issued on the basis of the fact mentioned in the application. Therefore, the facts of those cases would not be applicable in the present case.
20. Upon hearing both the sides, in our view, scheme / project undertaken by appellants was clearly a CIS. The provision of Section 11AA of the SEBI Act as reproduced hereinabove would show that the payment made by the investors was pooled and utilized for the purpose of said project. The contribution was with a view to make or to receive profit, income on property from such scheme. The property was to be managed by the appellant MVL and the investors would not have any day to day control over the management.
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21. As found earlier even the agreement did not provide for any specific unit in many cases. In some cases, where the unit is identified on a different floor that units did not exist on the approved floor plan. There was ARA which showed that gullible investors were made to believe that they would have assured return. The buy- back agreement also, though according to the MVL showed that it has offered to buy-back by paying additional interest of 5% over the capital invested by the allottees, in fact, it was much lesser as detailed supra.
22. In the case of PGF Ltd. & Ors. vs. Union of India & Anr. in Civil Appeal No. 6572 of 2004, the Hon'ble Supreme Court has observed as under :-
"Therefore, the paramount object of the Parliament in enacting the SEBI Act itself and in particular the addition of Section 11AA was with a view to protect the gullible investors most of whom are poor and uneducated or retired personnel or those who belong to middle income group and who seek to invest their hard earned retirement benefits or savings in such schemes with a view to earn some sustained benefits or with the fond hope that such investment will get appreciated in course of time. Certain other Section of the people who are worstly affected are those who belong to the middle income group who again make such investments in order to earn some extra financial benefits and thereby improve their standard of living and on 21 very many occasions to cater to the need of the educational career of their children.
38. Since it was noticed in the early 90s that there was mushroom growth of attractive schemes or arrangements, which persuaded the above vulnerable group getting attracted towards such schemes and arrangements, which weakness was encashed by the promoters of such schemes and arrangements who lure them to part with their savings by falling as a prey to the sweet coated words of such frauds, the Parliament thought it fit to introduce Section 11AA in the Act in order to ensure that any such scheme put to public notice is not intended to defraud such gullible investors and also to monitor the operation of such schemes and arrangements based on the regulations framed under Section 11AA of the Act. ...
... ...
40. It will have to be stated with particular reference to the activity of the PGF Limited, namely, sale and development of agricultural land as a collective investment scheme, the implication of Section 11AA was not intended to affect the development of agricultural land or any other operation connected therewith or put any spokes in such sale-cum- development of such agricultural land. It has to be borne in mind that by seeking to cover any scheme or arrangement by way of collective investment scheme either in the field of agricultural or any other commercial activity, the purport is only to ensure that the scheme providing for investment in the form of rupee, anna or paise gets registered with the authority concerned and the provision would further seek to regulate such schemes in order to ensure that any such investment based on any promise under the scheme or arrangement is truly operated upon in a lawful manner and that by operating such scheme or arrangement the person who makes the investment is able to really reap the benefit and that he is 22 not defrauded ... ... It is, therefore, apparent that all other schemes/arrangements operated by all others, namely, other than those who are governed by sub- section 3 of Section 11AA are to be controlled in order to ensure proper working of the scheme primarily in the interest of the investors.
......
42. Therefore, in reality what sub-section (2) of Section 11AA intends to achieve is only to safeguard the interest of the investors whenever any scheme or arrangement is announced by such promoters by making a thorough study of such schemes and arrangements before registering such schemes with the SEBI and also later on monitor such schemes and arrangements in order to ensure proper statutory control over such promoters and whatever investment made by any individual is provided necessary protection for their investments in the event of such schemes or arrangements either being successfully operated upon or by any misfortune happen to be abandoned, where again there would be sufficient safeguards made for an assured refund of investments made, if not in full, at least a part of it.
... ... In the light of our above conclusions on this ground it will have to be held that Section 11AA is a valid provision, not suffering from any infirmity, as it does not intrude into the specific activities of sale of agricultural land and its development. ... ...
It is needless to state that as per the agreement between the customer and the PGF Limited, it is the responsibility of the PGF Limited to carry out the developmental activity in the land and thereby the PGF Limited undertook to manage the scheme/arrangement on behalf of the customers. Having regard to the location of the lands sold in units to the customers, which are located in different states while the customers are stated to be from different parts of the country it is well-neigh 23 possible for the customers to have day to day control over the management and operation of the scheme/arrangement. In these circumstances, the conclusion of the Division Bench in holding that the nature of activity of the PGF Limited under the guise of sale and development of agricultural land did fall under the definition of collective investment scheme under Section 2(ba) read along with Section 11AA of the SEBI Act was perfectly justified and hence, we do not find any flaw in the said conclusion.
... ....
53. We, therefore, hold that Section 11AA of the SEBI Act is constitutionally valid. We also hold that the activity of the PGF Limited, namely, the sale and development of agricultural land squarely falls within the definition of collective investment scheme under Section 2(ba) read along with Section 11AA (ii) of the SEBI Act and consequently the order of the second respondent dated 06.12.2002 is perfectly justified and there is no scope to interfere with the same. In the light of our above conclusions, the PGF Limited has to comply with the directions contained in last paragraph of the order of the second respondent dated 06.12.2002 ... ..."
23. Considering all these facts, in our view, the project was clearly a CIS. This takes us to find out the personal liability of directors.
24. Appellant Nos. 5, 6 and 7 in Appeal No. 157 of 2015 filed their separate written submissions. They submitted that the Official Liquidator of appellant MVL did not put their case before this 24 Tribunal while presenting argument on behalf of MVL. They submit that they had given individual consent authority to Mr. Sushil Agarwal, the then Vice President of the appellant MVL to file the appeal and, therefore, the common appeal was filed. Each of them tabulated their own case to show that how as a director simplicitor cannot be made liable for the breach. It is however to be noted that admittedly before the learned WTM none of them raised any of the issue. They in common had raised the only plea that the project was not CIS. They had also not pleaded their individual case regarding their personal liability in the appeal. In the circumstances their case put only in the written submission for the first time cannot be considered.
25. As regards the appeals of Mr. Vijay Kumar Sood bearing appeal Nos. 21 and 22 of 2021, he submitted that copy of the order was not served upon him neither the same was available on the website of respondent SEBI and, therefore, delay from the date of the order till the appellant became aware of the order i.e. June 15, 2020 cannot be treated as a delay. For the rest of the delay of 148 days i.e. from the date of having knowledge of the order, he submitted that it 25 was an inadvertent mistake and lenient view may be taken in condoning the delay considering all the facts the delay is condoned.
26. In the application for condonation of delay, he did not take a plea that he was not represented before the respondent SEBI on that the matter proceeded ex-parte before SEBI. In appeal memo however he took the said plea. Respondent SEBI filed affidavit-in- reply in his case. It was also submitted in written note of argument that the appellant did not deny that he was served with the ex-parte order. Further, the minutes of hearing would record that all the individual directors as well as the appellant MVL had engaged a common representative who placed their case before the respondent SEBI. None of the directors put any case regarding their individual liability, if any, and, therefore, now in the appeal Mr. Vijay Kumar Sood also cannot be permitted to raise the same.
27. It is not the case of appellant Vijay Kumar Sood that he was not served with the ex-parte order passed earlier by respondent SEBI. The respondent submit that he like other directors was also represented by a common authorised representative. Taking into consideration all these facts, in our view, case of the appellant has no force.
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28. All the appeals are hereby dismissed without any order as to costs. The Misc. Applications also stand disposed of.
29. This order will be digitally signed by the Private Secretary on behalf of the bench and all concerned parties are directed to act on the digitally signed copy of this order. Certified copy of this order is also available from the Registry on payment of usual charges.
Justice Tarun Agarwala Presiding Officer Justice M. T. Joshi Judicial Member Ms. Meera Swarup Technical Member PRAMILA Digitally by PRAMILA signed TANAJI TANAJI MISAL 03.01.2023 Date: 2023.01.06 MISAL 16:54:42 +05'30' PTM