Securities Appellate Tribunal
Bpl Ltd. vs Securities & Exchange Board Of India on 21 May, 2001
ORDER
1. These six appeals are directed against the common order dated 19-4-2001 made by the Chairman, Securities and Exchange Board of India, where by the Appellant in Appeal No. 14 of 2001 /(BPL) was directed not to access the capital market for a period of four years. It was further ordered that prosecution under section 24 of the Securities and Exchange Board of India Act, 1992 ('the Act') be initiated against BPL through its directors/officers, Shri Rajeev Chandrasekhar, Shri Ajit Nambiar, Shri R. Murali, Shri T.P.G. Nambiar and Shri T.C. Chauhan (the Appellant officers).
2. Brief facts leading to the filing of the present appeals are as follows :
According to the Respondent's perception, large volumes coupled with abnormal price movements were observed in the stock exchanges in respect of shares of BPL, particularly during the period between April and June 1998. Suspecting price manipulation in the scrips of BPL, the Respondent conducted an investigation. Based on the findings of the investigation, the Respondent, on 20-12-1999 issued a show-cause notice to BPL. By the said show-cause notice BPL was called upon to explain as to why directions including directions prohibiting BPL from dealing in securities and accessing the capital market and any other suitable direction in the interest of investors and securities market under section 11 read with section 11B of the SEBI Act and regulation 11 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995 (the 1995 Regulations) should not be issued to it. By the said notice BPL was also asked to show cause as to why prosecution proceedings under section 24 of the SEBI Act should not be initiated against it in respect of the violations mentioned in the notice. Separate show-cause notices, with identical contents were addressed to the Appellant officers also. Show-cause notice was adjudicated by the Chairman, SEBI. Based on the conclusion arrived at in the adjudication, he passed the impugned order.
3. Copies of the appeals have already been served on the Respondent. The Respondent is yet to file the reply. Pending final disposal of the appeals, the Appellants have prayed for interim order staying the impugned order and restraining the Respondent from taking any steps or proceedings in furtherance of the directions contained in paragraph 14.2 of the impugned order to prosecute the Appellants.
4. Since all these six appeals are directed against the common order dated 19-4-2001 and the relief sought in each appeal being identical, it was decided to hear the matter together.
5. At this stage of the proceedings what is being considered is the Appellant's prayer for interim order. It was made known to the parties that the Tribunal would be disposing of the appeals expeditiously, on receipt of the Respondent's reply.
6. Shri Aspi Chinoy, learned Senior Counsel, appearing for the Appellants (except in appeal No. 15/2001) submitted that since the appeals are likely to be disposed of early, he was not pressing for interim order staying the prohibition on BPL accessing the capital market. He wants the rest of the order stayed for the time being as he feels that in case the decision to prosecute flowing from the order is put into effect, the Appellants would be put into considerable hardship, that in the event the appeals are allowed and the order is set aside, unscrambling of prosecution will not be possible. He stated that the balance of convenience is in favour of the Appellants.
7. Shri Chinoy submitted that since an order passed by the Respondent is appealable to the Tribunal, it is well within the jurisdiction of the Tribunal to stay the order, for sufficient reasons. He submitted that since appeal is a substantive right, interim order incidental thereto can be passed. Shri Chinoy made clear that his prayer is only to stay part of the substantive order and not initiation of prosecution. Shri Chinoy did attack the order on several grounds to demolish its very sustainability and the decision flowing therefrom. The learned senior counsel submitted that the impugned order is ex facie without jurisdiction and perverse. He pointed out that even the operative portion of the order in para 14.2 itself is vague as it directs prosecution against BPL "through" its directors.
8. Shri Chinoy referring to the impugned order submitted that it is directed against BPL as is evident from the text of the order and in particular cited the observations in para 3.1 therein. Though show-cause notices were issued to the Appellant officers also, and they had submitted their reply thereto, with specific request for a personal hearing in the matter to enable them to explain their case to the adjudicating authority, no such opportunity was given to them. There is not even any indication in the impugned order as to whether their submissions were at all considered and as to why their request for personal hearing was not acceded to. Shri Chinoy submitted that having put the Appellant officers on show-cause notice, their replies and requests were arbitrarily ignored and passed an order against them, in total disregard to the principles of natural justice. Countering the Respondent's contention that the procedure under the Act/regulations does not contemplate issuance of pre-prosecution notices, the learned Senior Counsel submitted that since the Respondent itself had chosen to issue show-cause notice to the Appellant officers it cannot ignore their response thereto while deciding the matter. To derive support to the proposition he referred to the rule enunciated by Mr. Justice Frankfurter in Vitarelli v. Seaton [1959] 359 US 535 that "an executive agency must be rigorously held to the standards by which it professes its action to be judged.....", if the action "is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed...... This judicially evolved rule of administrative law is now firmly established.......
He that takes the procedural sword shall perish with the sword". Shri Chinoy stated that the above proposition was followed by Supreme Court in (i) Dr. Amarjit Singh Ahluwalia v. State of Punjab AIR 1975 SC 984 at page 990, (ii) Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi AIR 1975 SC 1331 at page 1331, (iii) Ramana Dayaram Shetty v. International Airport Authority of India AIR 1979 SC 1628 at p. 1636.
9. Shri Chinoy submitted that the impugned order had relied on certain materials which were not disclosed in the show cause or made available to the Appellants. For a list of such materials he referred to para E of the appeal. He submitted that the Appellants were not shown any material based on which the Respondent had come to the conclusion that Damayanti group is linked to Shri Harshad Metha, a person who is notified under the Special Courts Act. It was also submitted that though cross-examination of Shri Shripal Morakhia, a representative of Sevanlilal Kantilal Securities Private Ltd. (SSKI), who allegedly approached BPL on the request of office bearers of Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), whose evidence has been relied on by the Respondent, was sought by BPL, it was not allowed by the Respondent for obvious reasons. According to the learned senior counsel cross-examination of Shri Morakhia is considered very relevant to establish that BPL had acted at the behest of BSE and NSE, not on its own, as is being alleged.
10. Shri Chinoy pointed out that on a perusal of the impugned order it is clear that the transactions with Damayanti group were carried out by BPL Sanyo Finance Ltd. (BSFL) and not by BPL, BSFL is an entirely separate legal entity in which BPL's holding was just 50 per cent and its Board was not dominated by BPL's nominees. It is a joint venture company with a Japanese firm with equal rights and power and by no stretch of imagination it can be said that BSFL is a front company of BPL and BPL was acting through BSFL. According to the Respondent's own version the entire transaction was made by BSFL, still no show-cause notice was issued to the said company or it was subjected to any investigation, that there was no evidence to show that BSFL's controlling mind was BPL, as alleged, that the show-cause notice is silent on this aspect.
11. The learned senior counsel submitted that the impugned order has been passed without jurisdiction, that the show-cause notice was issued alleging violation of regulation 4(a) and 4(d) of the 1995 Regulations; and the order has been passed under sections 11 and 11B. He submitted that both these sections have no application to the instant case, that power under section 11B is preventive and remedial in nature and certainly not punitive. Section 11B is meant for emergent situations. Since the alleged price manipulation reportedly relate to the year 1998, after a lapse of nearly 3 years, section 11B cannot be invoked now as a preventive or remedial measure. The learned senior counsel stated that the impugned order is a penal order, and beyond the scope of section 11B. He further submitted that the Respondent had failed to establish any case attracting the provisions of regulation 4(a) and 4(d) of the 1995 Regulations. He pointed out that regulation 4 is on market manipulation, manipulation should be for somebody's benefit, that in the light of what is stated in the show-cause notice, no case of manipulation can be made out, and the order also has not made out any such case.
12. Shri Chinoy also pointed out that the order suffers from several infirmities. By way of an example he pointed out the Respondent's observation that public holding in BPL is 40 lakh shares. According to the learned senior counsel public holding in BPL is about 107 lakh shares, that the Respondent had deliberately understated the true size of public holding only to impressively show that the number of shares involved in the transactions was of huge size vis-a-vis public holding.
13. Shri Chinoy submitted that on several grounds as put forth by him, the conclusion drawn by the authority in the adjudication cannot sustain and consequently the order passed based on such findings also cannot sustain. He submitted that therefore the order, need be temporarily stayed so as to restrain the Respondent acting in furtherance to the order or giving effect to the same.
14. Shri Somsekhar Sundaresan, the learned counsel appearing for the Appellant in appeal No. 15 of 2001, submitted that the Appellant was looking after BPL's telecom business and not in any way involved in the decisions relating to management of the investment portfolio of BPL, that the Appellant was not an officer incharge and responsible to the company for the conduct of its business, at the relevant of point of time, to attract the penal provisions of section 27 of the SEBI Act. To show the Appellant's non-involvement Shri Sundaresan stated that the Appellant had attended only 2 Board meetings in 1997 and not even a single meeting in 1998 and 1999, that the Appellant is a non-executive director like any such other director. It was also pointed out that the Appellant was holding only 5,000 shares in BPL and from that angle also he had no stake in the BPL's finances.
15. It was also pointed out that the show-cause notice issued to the Appellant did not allege any violation or contravention of the law by him and that he had explained his version in writing in his reply to the notice. His submissions were not taken into consideration by the Respondent while passing the impugned order. Though he had specifically asked for a personal hearing, the request was not acceded to by the Respondent. The Respondent passed the order without following the basic principles of natural justice, and on this ground alone the order is untenable.
16. Shri Sundaresan, submitted that the Appellant is aggrieved by the order passed by the Respondent. In as much as the order is not legally sustainable, he is entitled to file an appeal before the Tribunal and the Tribunal has adequate power to pass suitable interim order during the pendency of the appeal, and the appellate remedy provided by the statute should not be negated by holding that the Tribunal has no power to pass interim orders.
17. Shri Sundaresan cited the following cases to support his view point that a criminal prosecution does not He against the Appellant. The cases relied on him by are (1) Hindustan Steel Ltd. v. State of Orissa AIR 1970 SC 253, (2) Hindustan Steel Ltd. v. A.K. Roy AIR 1969 Ori. 252, (3) R.K. Khandelwal v. State 1964 ALJ 625, (4) Sham Sundar v. State of Haryana AIR 1989 SC 1982, (5) Girdharilal Gupta v. D.N. Mehta AIR 1971 SC 2162 (6) Rovindra Narayan v. Registrar of Companies [1994] 81 Comp. Cas. 925, (7) C.V. Siva Prasad v. Registrar of Companies [1997] 88 Comp. Cas. 420 and (8) Sanman Consultants v. SEBI[2001] 30 SCL 45.
18. In Hindustan Steel Ltd. 's case (AIR 1970) (supra) the Appellant has relied on the guiding principles laid down by the Supreme Court, required to be followed in imposing monetary penalties in an adjudication which is quasi-criminal in nature. In Hindustan Steel Ltd.'s case (AIR 1969) (supra) the Appellant has relied on the court's observation on the exercise of discretion by the Industrial Tribunal in a matter involving reinstatement of a dismissed employee. Khandelwal case and Shamsunder case were cited to show that a director/partner simpliciter is not liable to be punished for an offence committed by a company/firm. Girdharilal's case has been cited to show that a director cannot be punished for an offence if he proves that the contravention of a legal provision took place without his knowledge. In Ravindra Narayan's case (supra) and C.V. Sivaprasad's case (supra) the court had viewed the position of directors vis-a-vis officer who is in default' under the Companies Act. In Sanman Consultant's case (supra) the Tribunal's observation on the role of the company in price rigging as discussed, has been cited.
19. The learned counsel submitted that the order has prejudicially affected the Appellant's reputation in the national and international market. According to him, the order needed be stayed, to protect the Appellant's reputation and goodwill which is at stake so long the order holds on. According to him in the absence of any stay of the impugned order, the Appellant would suffer irreparable injury.
20. Shri R.A. Dada, the learned senior counsel appearing for the Respondent stated that at this stage, the Tribunal is considering the limited question of passing an interim order as sought for by the Appellants. Therefore, all that is required to be considered at present is that whether (a) the Appellants have a prima facie case (b) the balance of convenience is in their favour (c) they would suffer any irreparable injury if their prayer for stay of the impugned order is disallowed.
21. Shri Dada submitted that since the Appellants have decided not to seek any interim order against the direction prohibiting BPL accessing the capital market, all that is left to be decided at this stage is the rest of the Respondent's order confining to the direction to initiate prosecutions under section 24 of the Act against BPL and the Appellant officers. In this context the learned senior counsel referred to the Supreme Court decision in United Commercial Bank v. Bank of India [1981] 2 SCC766 there in the court had viewed that the first question that necessarily arise while considering a case for injunction of an order is whether in the facts and circumstances of the case, there is a prima facie case, and, if so between whom. According to him in the instant case, the Appellants have not established any prima facie case in their support.
22. Shri Dada referred to the provisions of sections 24, 26 and 27 of the SEBI Act and submitted that there is built in provision in the law itself to protect the persons facing prosecution under the Act. In this context he referred to the provisions of section 27 and submitted that a person will not be liable to any punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence. Referring to subsection (2) of section 27, learned senior counsel submitted that the penal consequences will visit only those who are really involved in the commission of the offence. He submitted that ordering prosecution should not be construed as imposition of penalty. A person against whom prosecution has been launched, can prove his innocence in terms of the proviso to the said section 27. There are also provisions available under Code of Criminal Procedure to protect the interest of such persons. One cannot stifle prosecution. Countering the Appellants' charge that there is no material to proceed with prosecution against the Appellants, Shri Dada submitted that the Respondent has adequate evidence in its possession to prove the charges, that the Respondent is not required to disclose all the evidence available with it to the Appellants at this stage. Referring to the allegation that the Appellant officers were not given personal hearing, Shri Dada submitted that it was not considered necessary especially in view of the safeguards available in section 27, and that in any case the Appellants had put forth their submissions in writing before the adjudicating authority.
23. The learned senior counsel further submitted that the adjudication and prosecution are two parallel matters and that there is no bar in launching prosecution, even if there is an adjudication/appeal pending. In support he cited the Supreme Court decision in P. Jayappan v. S.K. Perumal[1984] 149 ITR 696 that pendency of the reassessment proceeding (adjudication) cannot act as a bar to the institution of the criminal prosecution for offences punishable under the Income-tax Act, that the institution of the criminal proceedings can not in the circumstances also amount to an abuse of the process of the court. Shri Dada referred to the Bombay High Court's decision in ANZ Grindlays Bank v. Directorate of Enforcement (W.P. No. 1972 of 1994 dated 7-11-1998) there in the court had discussed in detail the scope of penalty proceedings and prosecution for offences under the Foreign Exchange Regulations Act, 1973. In the said case, the Respondent's submission that the enforcement directorate could not invoke section 61 for launching prosecution till the completion of adjudication was held untenable. The court did not agree with the Respondent's plea therein that the impugned provisions abrogate prestige or reputation of the official because he/she had to face prosecution. He referred to sections 24,26 and 27 of the SEBI Act and stated that the Respondent is empowered, independent of adjudication to launch prosecutions for offences punishable under the Act.
Shri Dada referred to section 41(d) of the Specific Relief Act and stated that an injunction cannot be granted by the Tribunal to restrain the Respondent from instituting or prosecuting any proceeding in a criminal matter, in a criminal court.
Referring to the Appellants' contention that BPL had no role in the price manipulation covered under the inquiry, Shri Dada stated that the sum of Rs. 5 crores provided by BPL to purchase the shares created havoc in the market. The fact that it had made available funds to the tune of Rs. 47 crores to bail out some stock brokers also need be born in mind. The Appellants' submission that such huge amount was made available at the behest BSE/SEBI is nothing but an alibi to justify its action. The Appellant has not explained that as to why it provided funds to SSKI. The learned senior counsel submitted that the entire correspondence based on which the Respondent did come to the conclusion that Damayanti Group is linked to Shri Harshad Mehta, was shown to BPL. Shri Dada, submitted that the case law cited by the learned counsel for the Appellant in appeal No. 15 of 2001 has no application to the matter before the Tribunal, as all those cases relate to post prosecution events and other unrelated matters.
24. On a query from the Tribunal that since the main appeal itself is likely to be disposed of expeditiously, and that the matter relates to the alleged market manipulation stated to have taken place about 3 years ago what was the need to hurry with the prosecution at this stage, Shri Dada staled that for certain reasons, it may be necessary to launch prosecution early. But, he stated that even if the prosecutions are launched, during the pendency of the appeal no further proceedings will be taken therein till such time the appeals are finally disposed of by the Tribunal.
25.1 have very carefully considered the submissions made by the parties and also the material available before me. There are several contentious issues in these appeals which need detailed consideration. But not now for the limited purpose of deciding the Appellants' prayer for interim order.
26. The impugned order comprises of (1) a direction to BPL not to access the capital market for a period of four years and (2) order to initiate prosecution proceedings under section 24 for violation of clauses (a) and
(d) of regulation 4 of the 1995 Regulations, against BPL 'through' its directors /officers named therein.
27. The learned senior counsel for the Appellants had made it very clear that they are not pressing their prayer for interim order on the prohibition on BPL accessing the market. The leaned Senior Counsel had also made it clear that the Appellants are not seeking any order restraining the Respondent initiating prosecutions against them. Shri Chinoy had made it clear that he is seeking a stay of the substantive portion of the order relevant in the context and laboured considerably to show that the order itself is not sustainable for several reasons. He had advanced arguments to show that the order is bad in facts and in law and as such any decision based on such a perverse order can not be allowed to be acted upon. Shri Somesekhar Sundaresan appearing for the Appellant in appeal No. 15 of 2001 had tried to establish that the Appellant was a non-executive director of BPL or say a director simpliciter, and not in charge or responsible to the conduct of the business of BPL to be proceeded against for the alleged offences. He had cited quite a few court decisions to show that in the light of the ratios of those cases the Appellant cannot be prosecuted and penalised. Shri Dada had countered the submissions made by the Appellants and said that there was no justification for any interim order at this stage of the appellate proceeding.
28. On a careful perusal of the contents of para 14.2 of the order it is seen that the prohibition order on BPL accessing the capital market is made invoking the provisions of sections 11 and 11B of the Act and prosecution against the Appellants has been ordered under section 24 for violation of clauses (a) and (d) of regulation 4 of the 1995 Regulations.
29. In terms of section 24(1), if any person contravenes or attempts to contravene or abets the contravention of the provisions of the Act or any rules or regulations made thereunder he shall be punishable with imprisonment for a term which may extend to one year, or with fine or with both. In terms of section 26( 1), cognizance of an offence punishable under the Act etc. by a court is permissible only on a complaint made by the SEBI (the Respondent).
30. On a combined reading of sections 24 and 26 it is clear that prosecution for offences can be launched by the Respondent and the power to launch such prosecution is not in any way circumscribed by any of the provision of the Act. It is left to the discretion of the Respondent to decide to launch or not to launch prosecution under the Act. It is also to be noted that no 'order' as such is required to launch prosecution in view of the clear provisions of section 26 of the Act because it is only the SEBI which is competent to file prosecution and none else. It is clear that under the Act the Respondent has uninhibited power to launch prosecution against persons contravening the provision of the Act, rules or regulations made thereunder. It is not within the appellate powers of the Tribunal to stall launching of prosecution by the respondent under section 24/26.
31. Now coming to the question of the penal liability of the directors/ officers of a company proceeded against for an offence, we need look into the provisions of section 27 of the Act, which reads as under :
"27. Offences by Companies.--(1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly :
Provided that noting contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly."
32. On a perusal of the section, it is thus clear that for the offence committed by a company its directors/officers are not automatically punished along with the company. Section provides safeguards by giving opportunity to them to prove their non-involvement in commission of the offence, to escape from the attendant penal consequences. It could be seen that as per the provisions of section 27 only those persons in charge and responsible at the relevant point of time for conduct of business of the company alone are deemed to be held guilty for contravention. So legal fiction comes into operation against the persons indicated only on establishing facts, which are appurtenant with the contravention. Such persons can successfully resist the prosecution by establishing want of knowledge about the contravention or exercises of due deligence to prevent the same. Such onus on a person cannot be considered so heavy. Ordinarily the same could be discharged.
33. Referring to the Appellant's submission that criminal prosecution results in diminishing the personal reputation of the concerned person, I would only refer to the following observation made by the Bombay High Court in ANZ Grindlays Bank's case (supra):
"We are unable to accept the plea that impugned provisions abrogates prestige or reputation of the official because he/she had to face prosecution. No person can maintain the dignity or cherish prestige by avoiding due process of law. Law being a guardian, it maintains and protects the dignity and honour of every person. Dignified and honourable persons have to stand the test and trial articulated by Law. And in obedience, he or she has to submit to the process. Cherishing Majesty of law and its process is a inner core of the dignity of individual in a Democratic World, which runs on the wheel of Rule of Law."
34. With reference to the Appellants' submission to stay the impugned adjudication order leading to prosecution and thereby expecting reprieve from the proposed prosecution for the time being, I would like to refer to the following observation from ANZ Grindlays Bank's case (supra).
"34. The scheme under the Act of 1973 is without any alternative. Preventive measures are more stringent, regard having to growing menace of foreign exchange violation. Section 56 deals with offences and prosecutions. This section opens with the phraseology 'without prejudice to any award of penalty by the adjudicating officer under this Act, if any person contravenes any of the provisions......he shall be, upon conviction by a court, be punishable'. Under the present scheme of the Act, 1973 prosecutions for offences are totally independent from the penalty proceedings. The Prosecutions are not made subject to the result of those proceedings. Further sections 53 and 55 independently provide for procedure and power of the Adjudicating Authority. Moreover, in case of penalty, independent remedy of appeal is provided by sections 52 and 54 of the Act of the 1973. However, in case of punishment on conviction remedy can be availed under Code of Criminal Procedure. In view of this, the submission of the learned Counsel that the Directorate could not invoke, section 61 for launching prosecution till the completion of adjudication of penalty is totally untenable.
35. Mr. Diwan, learned Counsel attempted tocontent that if the Directorate simultaneously is permitted to invoke section 61 for launching prosecution, it would lead to multiplicity of proceedings. If the person is not held responsible for contravention in adjudication proceedings, he had to face prosecution on the same set of facts. Moreover exercise of the Directorate is without any guideline. Reliance is placed on decision in the case of Ramana Dayaram Shetty v. I.A. Authority of India reported in AIR 1979 SC 1628 which dealt the matter of tender of the Government. Submissions are totally untenable in view of the scheme of Act 1973 as discussed above. Mandate of section 56 is clear and absolute and does not leave any scope for the discretion of the Authority. Both the proceedings are statutory permissible and they are not in any manner unjust. Mr. Chandrachud rightly asserted that the parallel proceedings are legally admissible." [Emphasis supplied]
35. Scheme of the SEBI Act is no way different on this issue. As discussed above power to prosecute criminal proceedings is independent of any other action under the Act.
36.1 have gone through all those cases cited by Shri Sundaresan, but find them of little help to the Appellant at this juncture.
37. No doubt granting an interim order in favour of the Appellants pending disposal of the appeal is discretionary, but to my mind the discretion has to be exercised on sound judicial principles. In case it is established that the party has a prima facie case, that the balance of convenience is in his favour ie., whether it would cause greater inconvenience to him if the interim order in his favour is not made than the convenience which the opposite party would be put to if the interim order is made and that whether the party would suffer irreparable injury, then only an interim slay order can be made.
38. The purpose and the effect of an interim order has been clearly enunciated in the following words by the Madhya Pradesh High Court in Durg Transport Co. v. Regional Transport Authority MR 1965 MP 142, that "a stay order or an ad interim injunction is issued to maintain and preserve the status quo existing at the time of initialing the proceedings. The real point which has to be decided when an application for stay or for a temporary injunction is made, is not how the question ought to be investigated; but it is whether the matter should not be preserved in status quo until the question can be finally disposed of".
39. As already stated above, launching prosecution in terms of section 24 Act for contravention of the statutory provisions is a totally independent course of action left to the discretion of the Respondent. In the instant case it is seen from the impugned order that the Respondent has ordered to initiate prosecution proceedings under section 24 for violation of clauses (a) and (d) of the 1995 Regulations. I do not think it is necessary, at this stage for the Tribunal to examine as to whether a prima facie case of violation of the said regulation has been made out in the impugned order to justify launching of prosecution against BPL and the Appellant officers. Since prosecution being entirely independent of the adjudication and the prosecuting authority and defendants would be getting enough opportunity to prove or disprove their case in the proceedings in the court, I do not consider it necessary to go into the sustainability of the impugned order vis-a-vis decision to launch prosecution. Even if it is held for argument sake that the impugned order is untenable, still nothing stops the Respondent from launching prosecution against the Appellants, in view of the statutory provisions discussed above. As stated above the learned Senior Counsel sought only a temporary stay of the substantive order. He had made it very clear that he was not at present seeking stay on the prohibition on BPL accessing the capital market or on the Respondent's order to initiate prosecution against the Appellants. If these two spin off effects are not required to be contained now through an interim order, I do not find any other imminent action emanating from the impugned order endangering the interests of the Appellants warranting emergent intervention by the Tribunal through an interim order. In my view the Appellants have not made out a prima facie case in their favour. In the light of the facts and circumstances of the case, I am also of the view that the balance of convenience is also not in their favour. I agree with Shri Dada that an order to prosecute the Appellants by itself is not a penalty. By launching prosecution the Appellants are not likely to suffer any irreparable injury.
40. For the reasons stated above, I am of the view that in the present appeals, passing an interim order as prayed for by the Appellants would not be justified. Therefore, the Appellant's request for interim order is rejected.
41. The appeals, taking into consideration the convenience of the parties, are posted for final disposal on 6-8-2001 at 11.30 AM.