Securities Appellate Tribunal
Dharam Khurana Huf vs Sebi on 12 October, 2022
Author: Tarun Agarwala
Bench: Tarun Agarwala
BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Date of Decision : 12.10.2022
Misc. Application No. 1136 of 2022
And
Misc. Application No. 1137 of 2022
And
Misc. Application No. 1138 of 2022
And
Appeal No. 683 of 2022
Dharam Khurana HUF
11 Gokul Marg, Civil Lines,
Moradabad,
Uttar Pradesh. .....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. Kunal Kataria, Advocate with Ms. Rinku Valanju,
Mr. Aditya Shah and Mr. Kush Khandelwal, Advocates i/b
R V Legal for the Appellant.
Mr. Gaurav Joshi, Senior Advocate with Mr. Abhiraj Arora
and Shourya Tanay, Advocates i/b ELP for the Respondent.
CORAM : Justice Tarun Agarwala, Presiding Officer
Justice M.T. Joshi, Judicial Member
Ms. Meera Swarup, Technical Member
Per : Justice Tarun Agarwala, Presiding Officer (Oral)
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1.The present appeal has been filed against the order dated March 29, 2022 passed by the Adjudicating Officer ('AO' for short) of the Securities and Exchange Board of India ('SEBI' for short) imposing a penalty of Rs. 5 lakh for creating artificial volume through reversal trades in the market.
2. In this regard the appellant has prayed for the following reliefs:-
(a) Pass an order setting aside, reversing and quashing the impugned order dated 22nd December, 2021 marked as Exhibit A to the appeal memo, passed by the learned Adjudicating Officer, SEBI;
(b) Allow the appellant to apply for settlement under the SEBI Settlement Scheme, 2022;
(c) Direct the respondent to refund the penalty amount of Rs. 3,70,500/- already paid by the appellant;
(d) Provide such other reliefs, as may be warranted on the basis of the facts and circumstances relating to this appeal in furthering justice as the Hon'ble Tribunal deems fit; and
(e) Grant any other reliefs that the Hon'ble Tribunal may consider fit and appropriate of the case. 3
3. Insofar as the delay in the filing of the appeal is concerned, the delay is condoned for the reasons stated therein as well as in view of the order of Supreme Court in Suo Moto Writ Petition (Civil) No. 3 of 2020 dated March 23, 2020, March 8, 2021, April 27, 2021 and January 10, 2022.
4. Having hearing heard the learned counsel for the parties; we find that the controversy involved in the present appeal is squarely covered by the decision of this Tribunal in Global Earth Properties and Developers Pvt. Ltd. vs. SEBI Appeal No. 212 of 2020 decided on September 14, 2020. It was urged that in the meanwhile, the respondent has issued a Settlement Scheme 2022 and that the appellant is entitled for the benefit of that scheme.
5. The prayer that the appellant may be permitted to apply for the Settlement Scheme, 2022 and that the respondent should be directed to refund the penalty amount of Rs. 3,70,000/- cannot be granted in the facts and circumstances of the present case for the reasons stated hereunder.
6. We find that the AO by an order dated March 29, 2022 had imposed a penalty of Rs. 5 lakh pursuant to the said 4 order. The appellant paid the amount unconditionally on April 16, 2022 and consequently the matter came to an end and a quietus in the matter was achieved.
7. The settlement scheme was issued in August 2022 which permitted certain entities to apply for Settlement. Clause 6 of the Settlement Scheme provides the eligibility criteria of such entities who can apply for settlement which is extracted here under:-
"6. Eligibility: Under the scheme, 2022, all the entities who had executed non-genuine trades/trade reversals on the stock option segment of BSE during the period April 01, 2014 to September 30, 2015 and against whom enforcement proceedings have been approved or initiated and are pending before any authority / forum, viz. Adjudicating Officer / Hon'ble SAT/Hon'ble Courts/Recovery Officer etc. shall be eligible to avail the one time settlement opportunity."
8. A perusal of the Clause 6 would indicate that an entity against whom enforcement proceedings have been approved or initiated and are pending before any authority / forum, viz. Adjudicating Officer/ Hon'ble SAT/Hon'ble Courts/Recovery Officer etc. shall be eligible to avail the one time settlement opportunity.
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9. It was contended that the present appeal has been filed and accordingly the appeal is pending and therefore the appellant is eligible for availing the one time settlement scheme under Clause 6 of the Settlement Scheme 2022.
10. The argument so raised seems attractive in the first blush but upon a closer scrutiny we find that the contention so raised lacks merit. We find that on the date of issuance of the scheme no proceedings were pending against the appellant inasmuch as pursuant to the order of the AO the appellant paid the penalty amount and thus accepted the order passed by the AO. Upon payment of the penalty amount all proceedings came to an end and a quietus in the matter was achieved. Nothing remained pending after the deposit of the penalty amount.
11. Reliance placed by the respondent of the decision of the Supreme Court in the matter of Computwel Systems P. Ltd. vs Hasan (2000) 10 SCC 403 is not applicable in view of the fact that we have condoned the delay in the filing of the appeal.
12. Consequently, since nothing was pending on the date when the scheme was issued the appellant was not eligible to 6 avail the one time settlement opportunity under the Settlement Scheme 2022. Thus, no relief can be granted to the appellant. The appeal fails and is dismissed. Misc. Applications are also disposed of.
13. 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 Digitally signed RAJALA byRAJALAKSHMI H 12.10.2022 KSHMI NAIR Date:
H NAIR 2022.10.14 10:35:55 +05'30' msb