Securities Appellate Tribunal
Rdb Rasayans Ltd. vs Sebi on 28 July, 2016
Author: J.P. Devadhar
Bench: J.P. Devadhar
BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Order Reserved On: 14.07.2016
Date of Decision : 26.07.2016
Appeal No. 514 of 2015
RDB Rasayans Ltd.
Room No. 9, 3rd Floor,
Bikaner Building 8/1,
Lalbazar Street,
Kolkata 700 001 ...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. P. N. Modi, Senior Advocate with Mr. Vinay Chauhan, Advocate i/b
Corporate Law Chambers India for the Appellant.
Mr. Kumar Desai, Advocate with Mr. Anubhav Ghosh, Advocate i/b The
Law Point for the Respondent.
WITH
Appeal No. 532 of 2015
Mr. Sunder Lal Dugar
RDB Rasayans Ltd.
Room No. 9, 3rd Floor,
Bikaner Building 8/1,
Lalbazar Street,
Kolkata 700 002 ...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. Vinay Chauhan, Advocate i/b Corporate Law Chambers India for the
Appellant.
Mr. Kumar Desai, Advocate with Mr. Anubhav Ghosh, Advocate i/b The
Law Point for the Respondent.
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WITH
Appeal No. 533 of 2015
Mr. Shanti Lal Baid
RDB Rasayans Ltd.
Room No. 9, 3rd Floor,
Bikaner Building 8/1,
Lalbazar Street,
Kolkata 700 002 ...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. Vinay Chauhan, Advocate i/b Corporate Law Chambers India for the
Appellant.
Mr. Kumar Desai, Advocate with Mr. Anubhav Ghosh, Advocate i/b The
Law Point for the Respondent.
AND
Appeal No. 534 of 2015
Mr. Sandeep Baid
RDB Rasayans Ltd.
Room No. 9, 3rd Floor,
Bikaner Building 8/1,
Lalbazar Street,
Kolkata 700 002 ...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. Vinay Chauhan, Advocate i/b Corporate Law Chambers India for the
Appellant.
Mr. Kumar Desai, Advocate with Mr. Anubhav Ghosh, Advocate i/b The
Law Point for the Respondent.
CORAM: Justice J.P. Devadhar, Presiding Officer
Dr. C.K.G. Nair, Member
Per: Justice J.P. Devadhar
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1.Appellants in these four appeals are aggrieved by the common order passed by the Whole Time Member ("WTM" for short) of Securities and Exchange Board of India ("SEBI" for short) on 19.12.2014. Hence all these appeals are heard together and disposed of by this common decision.
2. RDB Rasayans Ltd. (Appellant in Appeal No. 514 of 2015) is a public limited company ("RDB" for short) and is listed on Bombay Stock Exchange ("BSE" for short). Appellants in Appeal Nos. 532 of 2015, 533 of 2015 & 534 of 2015 were at the relevant time, Chairman, Managing Director and Whole Time Director respectively, of RDB.
3. By the impugned order dated 19.12.2014 the WTM of SEBI in exercise of powers conferred under Section 11, 11A and 11B of the Securities and Exchange Board of India Act, 1992 ("SEBI Act" for short) has debarred the appellants from accessing the securities market and prohibited them from buying, selling and otherwise dealing in securities market directly or indirectly in any manner, whatsoever, for a period of four years. It is further stated in the impugned order that the period of prohibition already undergone by the appellants pursuant to the ex-parte ad-interim order dated 28.12.2011 shall be taken into account for the purpose of computing the period of prohibition imposed under the impugned order. It is not in dispute that the appellants have already undergone the debarment imposed under the impugned order and as such all these appeals have become infructuous.
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4. However, counsel for the appellants, submitted that in the impugned order, the WTM of SEBI has upheld two additional charges against the appellants even though the Adjudicating Officer ("AO" for short) of SEBI, in his order dated 06.08.2014 has dropped those two charges and hence it would be just and proper to hear the appeals on merit.
5. Basic charge held against the appellants is that by suppressing material facts from the investors in the IPO, the appellants have violated Securities And Exchange Board Of India (Issue Of Capital And Disclosure Requirements) Regulations, 2009 ("ICDR Regulations" for short) and by misutilizing the IPO proceeds, the appellants have violated the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 ("PFUTP" Regulations" for short).
6. It is relevant to note that based on the aforesaid violations, the AO of SEBI by his order dated 06.08.2014 had inter alia imposed penalty of ` 2 crore on the directors of RDB. Challenging the said order passed by the AO, the directors of RDB had filed appeals before this Tribunal. In our order passed today in those appeals (lead matter being Appeal No. 404 of 2014 decided on 26.07.2016) we have upheld the decision of the AO of SEBI that the directors or RDB are guilty of violating ICDR Regulations and PFUTP Regulations and accordingly upheld the penalty of ` 2 crore imposed on the appellants.
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7. Accordingly, for the reasons stated in our order in Appeal No. 404 of 2014, we uphold the order passed by the WTM of SEBI that the appellants are guilty of violating the ICDR Regulations and PFUTP Regulations.
8. As regards the two additional charges upheld against the appellants, which were dropped by the AO of SEBI, in our opinion, the WTM of SEBI without recording a finding as to how the order of AO is erroneous with reference to the two additional charges, could not and ought not to have upheld the two additional charges against the appellants.
9. However, going into the question as to whether the WTM of SEBI was justified in upholding the two additional charges would now be futile, because the appellants have already undergone the debarment imposed under the impugned order and as such the appeals have become infructuous.
10. In these circumstances, we see no reason to go into the question as to whether the WTM of SEBI was justified in upholding two additional charges against the appellants. Accordingly, in view of our decision that the appellants are guilty of violating the ICDR Regulations and PFUTP Regulations and the appellants have already undergone the debarment imposed under the impugned order, without going into the question as to whether the WTM of SEBI was justified in upholding the two additional charges, we dispose of all these appeals as infructuous. 6
11. All the appeals are accordingly dismissed as infructuous with no order as to costs.
Sd/-
Justice J.P. Devadhar Presiding Officer Sd/-
Dr. C.K.G. Nair Member 26.07.2016 Prepared & Compared By: PK