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8. It is the case of the appellant that in spite of aforesaid decision, SEBI issued a fresh show cause notice dated December 13, 2018 against the appellant and other Directors of the company with regard to the issuance of the OCDs by the company. The allegation in the show cause notice, in a nutshell is, that during the tenure of the appellant as Managing Director of the company, the OCDs were issued and allotted and that the appellant as a Managing Director, being an officer in default u/s 5 of the Companies Act, was responsible.
13. The contention of the appellant was the same, namely, that he was never appointed as a Director or Managing Director in the company; that he had no nexus with the company; that he had never issued any OCDs nor attended any meetings of the Board of Directors nor singed any attendance register and therefore u/s 283(1)(g) of the Companies Act, 1956 for not attending the board meetings he is deemed to have been removed as a Director of the company.
14. On the other hand, the respondent acknowledged the judgment of the Gujarat High Court as well as the decision of SEBI dated September 7, 2016 in relation to the appellant but contended that as per the Gujarat High Court the tenure of the appellant as Managing Director of the company was fixed from November 7, 2013 to March 6, 2014 and therefore during this period the appellant was the Managing Director which he cannot escape and cannot contend that he was never a Managing Director. It was also urged that in the financial year 2013-14 the OCDs were issued and the appellant being the Managing Director was responsible and was an officer in default u/s 5 of the Companies Act. It was therefore contended that the order of the WTM does not suffer from any error of law and the appeal consequently should be dismissed.
15. Having head the appellant in person and the learned senior counsel for the respondent and having perused the order of SEBI dated September 7, 2016 and the two judgments of the Gujarat High Court dated July 5, 2017 and February 3, 2018 and upon a perusal of the show cause notice we are of the opinion that the impugned order cannot be sustained. The only reason given by the WTM implicating the appellant is that OCDs appears (emphasis is ours) to have been issued and allotted during the financial year 2013-14 when the appellant was the Managing Director. The word "appears" is of importance. A presumption has been drawn by the WTM that because the appellant was the Managing Director for a limited period from November 7, 2013 to March 6, 2014 it is presumed that the OCDs were issued during the period when he was appointed as a Managing Director.
(iii) Exhibit - J to the memo of appeal indicates that OCDs were issued on various dates and the last OCD was issued on September 30, 2013 i.e. prior to the date of the alleged appointment of the appellant on November 7, 2013. There is no evidence to show that OCDs were issued during the period when the appellant was appointed as a Managing Director.
(iv) The Gujarat High Court in its decision dated February 3, 2018 has categorically held that the appellant had no role to play and that the appointment of the appellant as Managing Director was only a paper arrangement. The Gujarat High Court further held that there was no material to show that the appellant attended any meeting of the Board of Directors and that he was not involved nor had any role in the decision making process for issuance of OCDs / NCDs;