Securities Appellate Tribunal
Securities & Exchange Board Of India Vs ... vs Sebi on 17 November, 2016
Author: J. P. Devadhar
Bench: J. P. Devadhar
BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
DATE : 17.11.2016
Misc. Application No. 193 of 2016
In
Appeal No. 52 of 2016
Securities & Exchange Board of India
SEBI Bhawan, Plot No. C-4A, G-Block, ..... Applicant
Bandra Kurla Complex, Mumbai - 400 051. (Org. Respondent)
Versus
Pancard Clubs Ltd.
111/113, Kalyandas Udyog Bhawan, Near ...... Respondent
Century Bhavan, Prabhadevi, Mumbai - 400 025. (Org. Appellant)
With
Appeal No. 53 of 2016
Securities & Exchange Board of India
SEBI Bhawan, Plot No. C-4A, G-Block, ..... Applicant
Bandra Kurla Complex, Mumbai - 400 051. (Org. Respondent)
Versus
1.Mr. Sudhir Shankar Moravekar
2. Ms. Shobha Ratnakar Barde
3. Ms. Usha Arun Tari
4. Mr. Manish Kalidas Gandhi
5. Mr. Chandrasen Ganpatrao Bhise 6 Mr. Ramachandran Ramakrishnan 111/113, Kalyandas Udyog Bhawan, Near ...... Respondents Century Bhavan, Prabhadevi, Mumbai - 400 025. (Org. Appellants) Mr. Fredum DeVitre, Senior Advocate with Mr. Mihir Modi, Mr. Vivek Rana, Advocates i/b K. Ashar & Co. for the Applicant. Mr. Ragesh Mehta, Advocate with Mr. Aayush Singhvi, Ms. Sandhya Iyer, Advocates i/b Vaish Associates for the Respondents. Mr. Rabindra Hazari, Advocate with Mr. Niket Mehta, Advocate for the Intervener.
CORAM : Justice J. P. Devadhar, Presiding Officer Jog Singh, Member Dr. C. K. G. Nair, Member 2 Per : Jog Singh (Oral)
1. Misc. Application No. 193 of 2016 has been preferred by SEBI seeking vacation of the partial stay orders dated March 9, 2016 and March 15, 2016 granted in favour of the appellants, inter-alia, directing SEBI not to take any coercive steps or write any letters to third parties in implementation of orders in these two appeals. This order of March 9, 2016 was subsequently extended by order dated March 15, 2016 till the next date of hearing. Further the time to comply with the directions of SEBI contained in para 34(b) of the impugned order dated February 29, 2016 was also extended as an interim measure.
2. The appellants have filed reply to the said misc. application no. 193 of 2016. We have heard extensively both the learned counsel for the parties as well as Shri Rabindra Hazari, learned counsel who has preferred misc. application nos. 251, 276 and 312 of 2016 for intervention in the matters. Shri DeVitre, learned senior counsel for SEBI has brought to our notice that after grant of abovesaid stay order, SEBI, however, called upon the appellants to provide list of assets of the company and the directors as contained in para 34(e) of the impugned order in respect of which there was no stay. Despite repeated letters by SEBI, the appellants gave vague and evasive information, that too, in the piecemeal manner.
3. It is brought to our notice that by letter dated August 16, 2016, the appellants provided certain information as regards the list of assets / properties held by the company, namely, Pancard Clubs Ltd. and Shri Sudhir Moravekar, who is director of the company. It is also argued that in the list of assets reflected in Annexure A, annexed with letter dated August 16, 2016 i.e. assets stated to be owned by the company at serial No. 9 it is 3 written "Bungalows in Lonawala, Maharashtra". Similarly in the list of properties mentioned in the said Annexure A there are six properties in respect of which most vague details have been provided in a sketchy manner. It is stated that other than list of assets etc. no information has been given about rest of the properties. Similarly, in case of list of assets / properties owned by the said director Shri Sudhir Moravekar, it is stated in Annexure B of the letter dated August 16, 2016 that "Bungalow at Versova, Mumbai, Maharashtra", plot at Vanjarwadi, Tal. Karjat, Dist. Raigad alongwith Sai Baba Temple". Shri DeVitre states that no bungalow no. and plot no. etc. have been given. Similarly, size of plot has been not given. It is submitted by the learned senior counsel that in the absence of the said details, SEBI is not in a position to effectively implement its own order which is jeopardizing the interest of the investors for whose interests the Regulator has passed this order.
4. We have heard learned counsel for the appellants Shri Ragesh Mehta with Mr. Ayush Singhvi. Shri Mehta has fairly stated that there are discrepancies and inadequacies in information being supplied by the appellants to SEBI. Shri Mehta further submits that all the details should have been truly disclosed by the appellants the moment SEBI directed the appellants to do so. He, however, submits that although belatedly ,but step by step, the details have been supplied and later on by letter dated September 22, 2016 all the details of the properties owned by the company as well as by the director have been supplied to SEBI. Shri Mehta also submits that if there is any shortcoming or inadequacy in supplying the information, the appellants will do needful.
5. After hearing the learned counsel for parties at length, we have also perused the documents brought on record and to our notice by the parties. 4 It is noted that in the letter dated August 16, 2016, the appellant no. 1 i.e. the company - Pancard Clubs Ltd. has categorically stated that except the abovementioned director Shri Sudhir Moravekar, none of other directors of the company has any assets / properties on his / her name. This statement has been found to be patently wrong as we have noted from the records brought to our notice that there are other specific properties in the name of various directors. In this connection, our attention is drawn towards the balance sheet of 2015-16 of Pancard Clubs Ltd. etc. It is surprisingly noted that the same company and the directors have filed along with letter dated September 22, 2016 a list of number of properties owned and possessed by them in addition to about 168 accounts held by the company at various places in the country. It is clearly written that the director Shri Sudhir Moravekar additionally owns plots at Baner collectively admeasuring area of 0-3-9 Hectare land which have not been disclosed even in the letter dated September 22, 2016. We have minutely perused letter dated September 22, 2016 also. Land at Lonavla, Versova bungalow and various details are not given regarding various properties situated at Vardhaman Industrial Complex and Office premises at Khatau House, Mahim have also been given. In all fairness, the appellants should have disclosed all these details to SEBI to enable it to perform its duties effectively and properly. It is, therefore, apparent from these details regarding bank accounts and other assets held by the company as well as its directors have been deliberately withheld and suppressed by the appellants from SEBI in violation of the direction in para 34(e) of the impugned order. In this background, keeping in view the blameworthy conduct of the appellants and dilatory tactics adopted by the appellants to deliberately suppress or delay the vital information, the interim order and directions granted on March 9, 2016 read with order of March 15, 2016 are hereby vacated. These two appeals are 5 listed, with the consent of the parties, on December 5, 2016 for final hearing as the pleadings are complete.
6. Misc. Application Nos. 251, 276 and 312 of 2016 filed by the Interveners alongwith the appeals shall be taken up for hearing on December 5, 2016.
Sd/-
Justice J. P. Devadhar Presiding Officer Sd/-
Jog Singh Member Sd/-
Dr. C. K. G. Nair Member 17.11.2016 Prepared & Compared by PTM