BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Order Reserved on: 8.4.2019
Date of Decision :16.4.2019
Appeal No.284 of 2015
Vinod Hingorani
D/63, Punarvasu Srushti,
Sector-3, Mira Road, Thane- 401104.

….. Appellant
Versus
Securities and Exchange Board of India
SEBI Bhawan, Plot C4-A,
G Block, Bandra-Kurla Complex,
Bandra (E), Mumbai – 400 051.

…… Respondent
Ms. Ankita Singhania, Advocate with Ms. Surabhi Agrawal,
Advocate i/b. Govind Solanke for the Appellant.
Mr. Gaurav Joshi, Senior Advocate with Mr. Mihir Mody and
Mr. Sushant Yadav, Advocates i/b. K. Ashar & Co. for the
Respondent.
With
Appeal No.23 of 2016
Damini Suraj Singh
Flat no.104, Bldg-15, Solitaire-3,
Poonam Garden, Opp. S.K. Stone,
Mira Road (E), Thane-401107.
Versus
1. D.V. Sekhar
General Manager & Recovery Officer
Securities and Exchange Board of India
SEBI Bhavan, C4-A,
G Block, Bandra-Kurla Complex,
….. Appellant
2
Bandra (E), Mumbai – 400 051.
2. Pimmi Hingorani
C/o. Juli Singh
A-301, Rekha Retreat Shanti Park,
Mira Road (E), Thane – 401107.
3. Vinod Hingorani
D/63, Punarvasu Co-operative HSG. Soc,
Sector-3, Shrishti Complex,
Mira Road (E), Thane- 401104.

… Respondent
Mr. L.S. Shetty, Advocate with Mr. U.R. Naik, Mr. Arnav
Misra, Ms. Sanika Lalit and Mr. M.M. Nair, Advocates i/b. L.S.
Shetty & Associates for the Appellant.
Mr. Gaurav Joshi, Senior Advocate with Mr. Anubhav Ghosh
and Ms. Vidhi Jhawar, Advocates i/b. The Law Point for the
Respondent No.1.
None for the Respondent Nos.2 and 3.
With
Appeal No.24 of 2016
Sarika Suraj Singh
Flat no.104, Bldg-15, Solitaire-3,
Poonam Garden, Opp. S.K. Stone,
Mira Road (E), Thane-401107.
Versus
1. D.V. Sekhar
General Manager & Recovery Officer
Securities and Exchange Board of India
SEBI Bhavan, C4-A,
G Block, Bandra-Kurla Complex,
Bandra (E), Mumbai – 400 051.
2. Pimmi Hingorani
C/o. Juli Singh
A-301, Rekha Retreat Shanti Park,
Mira Road (E), Thane – 401107.
3. Vinod Hingorani
….. Appellant
3
D/63, Punarvasu Co-operative HSG. Soc,
Sector-3, Shrishti Complex,
Mira Road (E), Thane- 401104.

… Respondents
Mr. L.S. Shetty, Advocate with Mr. U.R. Naik, Mr. Arnav
Misra, Ms. Sanika Lalit and Mr. M.M. Nair, Advocates i/b. L.S.
Shetty & Associates for the Appellant.
Mr. Gaurav Joshi, Senior Advocate with Mr. Anubhav Ghosh
and Ms. Vidhi Jhawar, Advocates i/b. The Law Point for the
Respondent No.1.
None for the Respondent Nos.2 and 3.
With
Appeal No. 25 of 2016
Rinki Suraj Singh
Flat No.104, Bldg-15,
Solitaire-3, Poonam Garden, Opp. S.K. Stone
Mira Road (E), Thane – 401107.

….. Appellant
Versus
1. D.V. Sekhar
General Manager & Recovery Officer
Securities and Exchange Board of India
SEBI Bhavan, C4-A,
G Block, Bandra-Kurla Complex,
Bandra (E), Mumbai – 400 051.
2. Pimmi Hingorani
C/o. Juli Singh
A-301, Rekha Retreat Shanti Park,
Mira Road (E), Thane – 401107.
3. Vinod Hingorani
D/63, Punarvasu Co-operative HSG. Soc,
Sector-3, Shrishti Complex,
Mira Road (E), Thane- 401104.

… Respondent
4
Mr. L.S. Shetty, Advocate with Mr. U.R. Naik, Mr. Arnav
Misra, Ms. Sanika Lalit and Mr. M.M. Nair, Advocates i/b. L.S.
Shetty & Associates for the Appellant.
Mr. Gaurav Joshi, Senior Advocate with Mr. Anubhav Ghosh
and Ms. Vidhi Jhawar, Advocates i/b. The Law Point for the
Respondent No.1.
None for the Respondent Nos.2 and 3.
With
Appeal No.382 of 2016
1. Damini Suraj Singh
2. Rinki Suraj Singh
3. Sarika Suraj Singh
Flat No.104, Bldg-15, Solitaire-3,
Poonam Garden, Opp. S.K. Stone
Mira Road (E), Thane – 401107.

….. Appellant
Versus
1. D.V. Sekhar
General Manager & Recovery Officer
Securities and Exchange Board of India
SEBI Bhavan, C4-A,
G Block, Bandra-Kurla Complex,
Bandra (E), Mumbai – 400 051.

……
Respondent
2. Pimmi Hingorani
C/o. Juli Singh
A-301, Rekha Retreat Shanti Park,
Mira Road (E), Thane – 401107.
3. Vinod Hingorani
D/63, Punarvasu Co-operative HSG. Soc,
Sector-3, Shrishti Complex,
Mira Road (E), Thane- 401104.
Mr. L.S. Shetty, Advocate with Mr. U.R. Naik, Mr. Arnav
Misra, Ms. Sanika Lalit and Mr. M.M. Nair, Advocates i/b. L.S.
Shetty & Associates for the Appellant.

5
Mr. Gaurav Joshi, Senior Advocate with Mr. Anubhav Ghosh
and Ms. Vidhi Jhawar, Advocates i/b. The Law Point for the
Respondent No.1.
None for the Respondent Nos.2 and 3.
CORAM: Justice Tarun Agarwala, Presiding Officer
Dr. C.K.G. Nair, Member
Justice M.T. Joshi, Judicial Member
Per : Justice Tarun Agarwala
1.

In these group of appeals a common issue is involved and,
therefore, all the appeals are being decided together.

For
facility, the facts in Appeal no.284 of 2015 Vinod Hingorani vs.
Securities and Exchange Board of India is being taken into
consideration.
2.

Three separate orders were passed against the appellant
Vinod Hingorani dated 28th April, 2010, 28th April, 2010 and
10th June, 2010 imposing a penalty of Rs.25 lakhs, Rs. 30 lakhs
and Rs.55 lakhs respectively for violation of Securities and
Exchange Board of India (Prohibition of Fraudulent and Unfair
Trade Practices relating to Securities Market) Regulations, 2003
(referred to hereinafter as ‘PFUTP Regulations’) and Securities
and Exchange Board of India (Prohibition of Insider Trading
Regulations) 1992 (referred to hereinafter as ‘PIT Regulations’).
The three orders became final and the appellant consequently
was aware of his liability to pay his dues in terms of the three
6
orders. The appellant failed and neglected to pay the dues even
after the expiry of 45 days from the date of the orders.
3.

Three recovery certificate nos. 211, 231 and 288 of 2014
dated 11th July, 2014, 11th July, 2014 and 16th July, 2014 were
issued requiring the appellant to pay an amount of
Rs.37,62,644/-, Rs.81,98,863/- and Rs.45,19,904/- aggregating
Rs.1,64,81,411/- which included the principal amount plus
interest failing which it was specified that the amount would be
recovered by following one or any of the modes specified under
Section 28A of the Securities and Exchange Board of India Act,
1992 (referred to hereinafter as ‘SEBI Act’).
4.

Inspite of the issuance of the Recovery Certificate and the
notice of demand the appellant failed to pay the amount as a
result
the
Recovery
Officer
issued
an
order
dated
18th December, 2014 directing civil imprisonment of the
appellant for a period of six months.

The order of civil
imprisonment was challenged by the appellant by means of a
Writ Petition No.639 of 2015 before the Bombay High Court
which was allowed by judgement dated 10th March, 2015. The
order of the Recovery Officer requiring the appellant to be
detained in civil imprisonment for a period of six months was
quashed and the appellant was released forthwith. The matter
7
was remitted to the Recovery Officer to decide the same afresh
in accordance with law in the light of the directions and
observations made in the judgement. The Bombay High Court
held that before issuing an order for detention and arrest for
non-payment of dues, the Recovery Officer was required to be
satisfied in accordance with the provisions of Rule 73(1) of
Second Schedule of the Income Tax Act, 1961, namely, that the
appellant with the object of obstructing the execution of the
certificate had dishonestly transferred the property or the
appellant despite having means to pay the arrears or some
substantial part thereof refused or neglected to pay the dues.
The Bombay High Court held that since this satisfaction was not
recorded by the Recovery Officer the order of detention could
not be sustained and was set aside.
5.

Pursuant to the judgement of the Bombay High Court, a
show cause notice dated 10th March, 2015 was served upon the
appellant stipulating therein that inspite of the penalties imposed
by SEBI in the year 2010 the appellant had refused and
neglected to pay the amount. Further, in order to escape from
the recovery of the said amount and to evade the fine imposed
the appellant had dishonestly transferred his Flat No.D 63,
Punarvashu Co-operative Housing Society to his brother-in-law
8
by a registered agreement to sell dated 30th January, 2013. It
was also alleged that fifty percent of the sale consideration was
paid to his wife and the remaining fifty percent to his mother. It
was also alleged that the appellant’s wife in turn purchased
another Flat No.A-1101 in Dev Paradise, Beverly Park Road,
Mira Road East, Thane on 2nd March, 2013 and thereafter
executed an agreement of sale dated 19th January, 2015
transferring the flat to three of her nieces (brother’s daughters,
namely, Ms. Rinki, Ms. Damini and Ms. Sarika). It was also
alleged that the consideration deposited in the name of mother
was subsequently diverted to purchase Flat No.A-1101, Dev
Paradise. The show cause notice also alleged that the appellant
was doing business in the name of ‘Kunal Beer Shop’ and civil
contracts, interior decorations works, real estate brokerage, etc
under the name and style as ‘Om Sai Interiors’ and, therefore,
was directed to show cause that since he had transferred the
property with a dishonest intention and further he still had the
means to pay the arrears he was directed to pay the amount
failing which proceedings for detention and arrest would be
initiated. After giving an opportunity of hearing, the Recovery
Officer passed an order dated 20th April, 2015 indicating that he
was satisfied that the appellant with the object of obstructing
9
execution of the certificate had dishonestly concealed and
transferred some of his properties and also that the appellant
inspite of having sufficient means to pay a substantial part of the
arrears had been continuously avoiding since 2010 to pay the
penalty and, therefore, directed the appellant to pay atleast
Rs.30 lakh within four weeks from the date of the order failing
which steps would be initiated for his arrest in execution of the
certificate. The appellant being aggrieved by the said order of
the Recovery Officer has filed the present Appeal no.284 of
2015.
6.

The appellant Damini Suraj Singh filed Appeal No.23 of
2016, Sarika Suraj Singh filed Appeal No.24 of 2016 and Rinki
Suraj Singh filed Appeal No.25 of 2016 and Damini Suraj Singh
and Ors. filed Appeal No.382 of 2016 challenging the
attachment order dated 2nd December, 2015 passed by the
Recovery Officer vide which Flat no.A1101, Dev Paradise has
been attached for recovery of dues of the appellant Vinod
Hingorani.
7.

We have heard Ms. Ankita Singhania, Advocate assisted
by Ms. Surabhi Agrawal, Mr. L.S. Shetty, Mr. U.R. Naik, Mr.
Arnav Misra, Ms. Sanika Lalit and Mr. M.M. Nair, learned
counsel for the appellants and Mr. Gaurav Joshi, Senior
10
Advocate assisted Mr. Mihir Mody, Mr. Sushant Yadav and Mr.
Anubhav Ghosh, learned counsel for the respondents at length.
8.

The basic contention of the appellant Vinod Hingorani is,
that the order directing payment of the dues and initiating
proceedings for detention and arrest is in violation of Rule 73 of
Part V of the Second Schedule of the Income Tax Act and,
therefore, the order is liable to be set aside. It was contended
that Rule 73 is mandatory and the conditions mentioned therein
are required to be satisfied before proceeding to take steps for
detention and arrest. It was contended that there has to be a
specific finding that the defaulter had dishonestly transferred
any part of his property after the drawing up of the certificate.
It was contended that in the instant case the transfer of the
property by the appellant Vinod Hingorani was done prior to the
issuance of the certificate and, therefore, such transfer was not
in violation of Rule 73(1)(a) of the Second Schedule of the
Income Tax Act. It was further contended that the appellant
Vinod Hingorani had also not violated the provisions of Rule
73(1)(b) of the Second Schedule of the Income Tax Act in as
much as the finding of the Recovery Officer that the appellant
Vinod Hingorani had the means to pay the arrears or some
substantial part thereof was based on suspicion and on such
11
suspicion which cannot replace proof cannot lead to the arrest of
the appellant Vinod Hingorani.
9.

To enlarge the submission it was contended by the learned
counsel Ms. Ankita Singhania that Vinod Hingorani admittedly
had transferred the property D 63 in favour of Mr. Suresh
Basantani who is the brother in law of the appellant by a
registered agreement of sale dated 30th January, 2013 whereas
the certificate was drawn up by the Recovery Officer much after
the alleged sale on 11th July, 2014 and 16th July, 2014. It was,
thus, contended that since the appellant had not transferred the
property after the drawing up of the certificate the question of
obstructing the execution of the certificate or dishonestly
transferring the property with a view to avoid the payment of
penalty did not arise. In support of her submission, the learned
counsel has placed reliance on a decision of the Calcutta High
Court in Gajendra Kumar Banthia vs. Union of India, 1996
SCC Online Cal 455 wherein it was held that the provision of
Rule 73 was mandatory in nature. It was also urged that the
finding in the impugned order that the appellant is the owner of
the business in Kunal Beer Shop and Om Sai Interiors and is
therefore earning money and has sufficient means to pay the
arrears or substantial part thereof is based on suspicion. It was
12
urged that there is no evidence to show that the appellant is the
owner of aforesaid two businesses. In support of her
submission, the learned counsel has relied upon a decision of
this Tribunal in Vision Technology India Ltd. vs. SEBI
Appeal no.270 of 2004 decided on 20th February, 2006
wherein the Tribunal held that suspicion howsoever strong
cannot take place of proof while relying upon the observation of
the Supreme Court in Union of India vs. Chaturbhai M. Patel
& Co. AIR 1976 SC 712.
10. In order to address this issue, it is essential to consider
Section 28A of the SEBI Act. For facility, the said provision is
extracted hereunder:
“28A. Recovery of amounts. (1) If a person fails to pay the
penalty imposed under the Act or fails to comply with any
direction of the Board for refund of monies or fails to
comply with a direction of disgorgement order issued
under section 11B or fails to pay any fees due to the
Board, the Recovery Officer may draw up under his
signature a statement in the specified form specifying the
amount due from the person (such statement being
hereafter in this Chapter referred to as certificate) and
shall proceed to recover from such person the amount
specified in the certificate by one or more of the following
modes, namely:—
(a) attachment and sale of the person’s movable property;
(b) attachment of the person’s bank accounts;
(c) attachment and sale of the person’s immovable
property;
13
(d) arrest of the person and his detention in prison;
(e) appointing a receiver for the management of the
person’s movable and immovable properties,
and for this purpose, the provisions of sections 220 to 227,
228A, 229, 232, the Second and Third Schedules to the
Income-tax Act, 1961 (43 of 1961) and the Income-tax
(Certificate Proceedings) Rules, 1962, as in force from
time to time, in so far as may be, apply with necessary
modifications as if the said provisions and the rules made
thereunder were the provisions of this Act and referred to
the amount due under this Act instead of to income-tax
under the Income-tax Act, 1961.
Explanation 1.— For the purposes of this sub-section, the
person’s movable or immovable property or monies held in
bank accounts shall include any property or monies held in
bank accounts which has been transferred directly or
indirectly on or after the date when the amount specified
in certificate had become due, by the person to his spouse
or minor child or son’s wife or son’s minor child, otherwise
than for adequate consideration, and which is held by, or
stands in the name of, any of the persons aforesaid; and so
far as the movable or immovable property or monies held
in bank accounts so transferred to his minor child or his
son’s minor child is concerned, it shall, even after the date
of attainment of majority by such minor child or son’s
minor child, as the case may be, continue to be included in
the person’s movable or immovable property or monies
held in bank accounts for recovering any amount due from
the person under this Act.
Explanation 2.— Any reference under the provisions of
the Second and Third Schedules to the Income-tax Act,
1961 (43 of 1961) and the Income-tax (Certificate
Proceedings) Rules, 1962 to the assessee shall be
construed as a reference to the person specified in the
certificate.
Explanation 3.— Any reference to appeal in Chapter
XVIID and the Second Schedule to the Income-tax Act,
1961 (43 of 1961), shall be construed as a reference to
14
appeal before the Securities Appellate Tribunal under
section 15T of this Act.
(2) The Recovery Officer shall be empowered to seek the
assistance of the local district administration while
exercising the powers under sub-section (1).
(3) Notwithstanding anything contained in any other law
for the time being in force, the recovery of amounts by a
Recovery Officer under sub-section (1), pursuant to noncompliance with any direction issued by the Board under
section 11B, shall have precedence over any other claim
against such person.
(4) For the purposes of sub-sections (1), (2) and (3), the
expression “Recovery Officer” means any officer of the
Board who may be authorised, by general or special order
in writing, to exercise the powers of a Recovery Officer.”
11. The aforesaid provision was inserted by Act no.27 of
2014. The object of inserting Section 28A to the SEBI Act was
to provide a mechanism for recovery of the amounts due to
SEBI. Instead of prescribing an independent mechanism for
collection and recovery of the amounts due to SEBI, the
legislature deemed it fit to follow the mechanism provided
under the Income Tax Act and accordingly inserted Section 28A
to SEBI Act wherein the provisions of the Income Tax Act
relating to ‘collection and recovery’ have been incorporated.
Thus, the legislature by inserting Section 28A to SEBI Act has
provided that if a person fails to pay the amounts referred in
Section 28A, then the RO shall draw up a statement/certificate
and proceed to recover the amounts specified in the certificate
15
by any one or more of the five modes specified therein and for
that purpose the provisions of Section 220 to 227, 228A, 229,
232, the Second and Third Schedules to the Income-tax Act,
1961 and the Income-tax (Certificate Proceedings) Rules, 1962
as in force from time to time, in so far as may be, would apply
with necessary modifications as if the said provisions and the
rules made thereunder were the provisions of SEBI Act and
referred to the amount due to SEBI under the SEBI Act.
12. The aforesaid provision clearly indicates that where a
person fails to pay the penalty imposed under the Act the
Recovery Officer would draw a certificate and proceed to
recover from such person the amount specified in the certificate
by one or more modes mentioned therein and for recovery of the
amount the provisions of Sections 220 to 227, 228A, 229, 232,
of the Second and Third Schedule of the Income Tax Act and
the Income Tax Certificate Proceedings Rules, 1962 in so far as
it may be applied with necessary modifications. Explanation 1
expressly provides that the defaulter’s moveable or immovable
property or monies would include any movable or immovable
property or monies transferred directly or indirectly or after the
date when the amount specified in the certificate had become
due.

16
13. It thus becomes clear that any amount which has been
specified in an order passed under the SEBI Act if not paid can
be recovered by any of the modes specified under Section 28A
for which purpose a certificate would be drawn up by the
Recovery Officer. In the instant case, the order of penalty was
passed in the year 2010 and the appellant Vinod Hingorani was
directed to pay the penalty within forty five days from the date
of the order.

The said amount was not paid within the
prescribed period and accordingly the order became final and
the amount became due and payable. Under Explanation 1 of
Section 28A the amount can be recovered from the defaulter’s
moveable or immovable property or monies held in bank
account which has been transferred directly or indirectly after
the amount had become due. The word “certificate” indicated
in Explanation 1 of Section 28A has to be read in the light of the
words “had become due”. The amount of penalty specified in
the original order had become due and payable after 45 days
from the date of the order. Thus, the word “certificate” used
under Explanation 1 of Section 28A would include the penalty
imposed under an order passed by SEBI.
14. Rule 73 of the Second Schedule of the Income Tax Act
provides as under:-
17
“73. Notice to show cause. – (1) No order for the arrest and
detention in civil prison of a defaulter shall be made unless
the Tax Recovery Officer has issued and served a notice
upon the defaulter calling upon him to appear before him
on the date specified in the notice and to show cause why
he should not be committed to the civil prison, and unless
the Tax Recovery Officer, for reasons recorded in writing,
is satisfied—
(a ) that the defaulter, with the object or effect of
obstructing the execution of the certificate, has,
after the drawing up of the certificate by the Tax
Recovery Officer, dishonestly transferred, concealed,
or removed any part of his property, or
(b ) that the defaulter has, or has had since the
drawing up of the certificate by the Tax Recovery
Officer, the means to pay the arrears or some
substantial part thereof and refuses or neglects or has
refused or neglected to pay the same.
(2) Notwithstanding anything contained in sub-rule (1), a
warrant for the arrest of the defaulter may be issued by the
Tax Recovery Officer if the Tax Recovery Officer is
satisfied, by affidavit or otherwise, that with the object or
effect of delaying the execution of the certificate, the
defaulter is likely to abscond or leave the local limits of
the jurisdiction of the Tax Recovery Officer.
(3) Where appearance is not made in obedience to a notice
issued and served under sub-rule (1), the Tax Recovery
Officer may issue a warrant for the arrest of the defaulter.
(3A) A warrant of arrest issued by a Tax Recovery Officer
under sub-rule (2) or sub-rule (3) may also be executed by
any other Tax Recovery Officer within whose jurisdiction
the defaulter may for the time being be found.
(4) Every person arrested in pursuance of a warrant of
arrest under this rule shall be brought before the Tax
Recovery Officer issuing the warrant as soon as
18
practicable and in any event within twenty-four hours of
his arrest (exclusive of the time required for the journey):
Provided that, if the defaulter pays the amount entered in
the warrant of arrest as due and the costs of the arrest to
the officer arresting him, such officer shall at once release
him.
Explanation.—For the purposes of this rule, where the
defaulter is a Hindu undivided family, the karta thereof
shall be deemed to be the defaulter.”
15. The usage of the word “after the drawing up of the
certificate” contained in Rule 73(1)(a) and the usage of the word
‘since the drawing up of the certificate’ contemplated under
Rule 73(1)(b) has to be read in the light of the provision of
Section 28A requiring the person to pay penalty imposed under
an order passed under SEBI Act.

Such drawing up of the
certificate or since the drawing up of the certificate would
include the order of SEBI imposing penalty under the SEBI Act.
Viewing from this angle it becomes apparently clear that
pursuant to an order imposing penalty and directing the
defaulter to pay the amount within 45 days and subsequently
failure on the part of the defaulter to pay the said amount and
dishonestly transferring or removing any part of the property
would amount to obstructing the execution of the certificate. In
our view, the contention that there was no obstruction of the
19
execution of the certificate by the appellant Vinod Hingorani
after the drawing up of the certificate is patently erroneous and
cannot be accepted.
16. At this stage, we may point out that it is true that
ordinarily we should follow the literal rule of interpretation
while construing a statutory provision, but if the literal
interpretation
makes
the
provision
unconstitutional
or
unworkable we can depart from it so that the provision becomes
constitutional or workable. Sometimes the plain language of the
provision has to be read down in order to uphold the validity of
the statute as invalidating a statute is a grave step. Hence we
may sometimes have to read down a statute in order to make it
constitutional.
17. The Supreme Court in several cases has adopted the
principles of reading down the provisions of the statute. The
reading down of a provision of a statute puts into operation the
principle that so far as it is reasonably possible to do so, the
legislation should be construed as being within within its power.
It has the principle effect that where an Act is expressed in
language of a generality which makes it capable, if read
literally, of applying to matters beyond the relevant legislative
provision, the Court will construe it in a more limited sense so
20
as to keep it with provision. Accordingly, Rule 73 has to be
read in this light along with the main provisions, i.e., Section
28A of the Act.
18. Similarly, the contention that Rule 73(1)(b) is also not
applicable as the appellant Vinod Hingorani has no means to
pay the arrears and is not earning from any business as he is not
the owner thereof is patently erroneous and cannot be accepted.
There is conclusive evidence which has come on record to
indicate there were large transfer of monies from the accounts
of Kunal Beer Shop to the accounts of the appellant and his wife
which leads to an irresistible inference that the appellant Vinod
Hingorani had the means to pay the arrears or some substantial
part of the amount. Refusal or neglecting to pay the amount
inspite of having means satisfies the condition contemplated
under Rule 73(1)(b). The decisions cited by the learned senior
counsel for the respondent, namely, Gajendra Kumar Banthia
(supra) and Vision Technology India Ltd. are distinguishable
and not applicable to the present facts and circumstances of the
case.

The contention raised by the learned counsel for the
appellant thus lacks merit.

21
19. In so far as Appeal nos.23, 24, 25 and 382 of 2016 are
concerned, the learned counsel for the appellant Shri Shetty
contended that the appellants are bonafide purchasers of the flat
for value and, therefore, the attachment orders cannot be
sustained and are liable to be set aside.
20. In this regard, we find that property No.D-63, Punarvashu
Co-operative Housing Society was registered in the name of
Vinod Hingorani, appellant in Appeal no.284 of 2015 by
registered agreement to sell dated 30th January, 2013. The said
appellant transferred the flat to his brother-in-law Mr. Suresh
Basantani by a registered agreement to sell dated 30th January,
2013 for a consideration of Rs.44 lakhs.

Part of the
consideration of Rs.22 lakhs was paid to the wife of the
appellant Vinod Hingorani. The wife of the appellant Vinod
Hingorani purchased Flat No.1101, Dev Paradise on 2nd March,
2013 and subsequently executed a registered agreement of sale
dated 19th January, 2015 in favour of the appellants Ms. Damini,
Ms. Sarika and Ms. Rinki, appellants in Appeal nos.23, 24 and
25 respectively. The Recovery Officer has found evidence that
Flat No.D 63, Punarvashu Co-operative Housing Society which
was owned by Vinod Hingorani and against whom an order of
22
SEBI was passed imposing a penalty and in order to evade the
payment initially transferred the property to his brother in law
as part amount was paid to his wife Pimmi Hingorani. She in
turn purchased Flat no.1101, Dev Paradise in her name and
thereafter transferred it to Ms. Damini, Ms. Sarika and Ms.
Rinki, the appellants who are her nieces. The Recovery Officer
has found a clear trail of the monies of Vinod Hingorani and has
also given a categorical finding that Vinod Hingorani’s wife
Pimmi Hingorani was a house wife. A feeble attempt was made
contending that Vinod Hingorani and Pimmi Hingorani were
living separately and that Rs.22 lakhs paid to Pimmi Hingorani
was with regard to settlement of their marital dispute. This
contention cannot be accepted as we find there is no judicial
order of separation. Further ample evidence has come on record
to show that joint account were being continuing and in
operation.
21. In the light of the aforesaid, it is clear that Vinod
Hingorani in order to avoid and evade the imposition of penalty
transferred the flat in a malafide manner. Consequently, the
attachment of Flat No.1101, Dev Paradise by the Recovery
Officer was perfectly justified.

The decision cited by the
23
learned counsel namely M/s. Sree Foundation vs. The Tax
Recovery Officer-I, 2015 (5) LW 244, Samson John vs. Tax
Recovery Officer, Raigad and Others, 2008 (4) SCC Online
771, Electro Zavod (India) Pvt. Ltd. and Others vs.
Commissioner of Income-Tax and Others, 2005 SCC Online
Cal 735, Jaymac Lasetron P. Ltd. and another vs.
Commissioner of Income-Tax and Others, 2006 SCC Online
Cal 825 are not applicable and distinguishable in the facts and
circumstances of the case.
22. For the reasons stated aforesaid all the appeals lack merit
and are dismissed. In the circumstances of the case there shall
be no order as to costs.
Sd/Justice Tarun Agarwala
Presiding Officer
Sd/Dr. C. K. G. Nair
Member
Sd/Justice M.T. Joshi
Judicial Member
16.4.2019
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RHN
24
After the pronouncement, the learned counsel for the
appellant in Appeal No.284 of 2015 has prayed for stay of the
operation of our judgement on the ground that the appellant is
bedridden. Be that as it may. We do not find any justification
to stay the effect and the operation of our order. The oral
request is rejected.
Sd/Justice Tarun Agarwala
Presiding Officer
Sd/Dr. C. K. G. Nair
Member
Sd/Justice M.T. Joshi
Judicial Member
16.4.2019
Prepared and compared by
RHN