BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
DATE : 25.01.2019
Appeal No. 247 of 2018
Yogesh K. Kaji
901, Natraj, Near Madhu Park,
11th Road, Khar West, Mumbai – 400 052.

….. 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. Advait Sethna, Advocate with Ms. Ruju R. Thakker, Advocate for the
Appellant.
Mr. Anubhav Ghosh, Advocate i/b Desai & Diwanji for the Respondent.
CORAM : Justice Tarun Agarwala, Presiding Officer
Dr. C. K. G. Nair, Member
Per : Justice Tarun Agarwala, Presiding Officer (Oral)
1.

This appeal has been filed challenging the order of the Whole Time
Member (‘WTM’ for short) of Securities and Exchange Board of India
(‘SEBI’ for short) dated May 15, 2018. By the said order the appellant has
been prohibited from buying, selling or dealing in securities, either directly
or indirectly or being associated with the securities market in any manner
whatsoever, for a period of one year from the date of the order.

2.

The order impugned in this appeal arises in the matter of Classic
Diamonds (India) Ltd. (‘the company’ for short). An investigation by SEBI
revealed violation of some provisions of Securities and Exchange Board of
India (Substantial Acquisition of Shares and Takeovers) Regulations
(‘Takeover Regulations’ for short). It is held in the impugned order that
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several entities, including the appellant herein, who were part of the
promoters and promoter group entities of the company and who were
holding shares of the company in the range of 55% to 75% during
September 30, 2005 to December 31, 2009 had acquired additional shares /
voting rights in the company on several occasions without making the
required public announcement in terms of Regulation 11(2) of Takeover
Regulations. It is also stated in the impugned order that since the company
in question is in the process of winding up, instead of a direction for open
offer, the appellant has been restrained from accessing the securities market
directly or indirectly for a period of one year. Accordingly, under the
Regulation 44 of the Takeover Regulations, 1997 read with Regulation 35
of the Takeover Regulations, 2011, the impugned order has been passed
restraining the appellant for a period of one year.

3.

Shri Advait Sethna, the learned counsel for the appellant submits
that vide an earlier order of SEBI dated September 22, 2017 in the same
matter the appellant was restrained from the securities market for a period
of one year from the date of that order. Thereafter, from September 23,
2017 the demat account of the appellant as well as that of his wife were
frozen. On November 15, 2017, this Appellate Tribunal quashed the said
order of SEBI dated September 22, 2017 qua the appellant on the ground
that the appellant was not provided an opportunity of being heard before
passing the Order. After issuing a fresh show cause notice and providing
an opportunity of being heard, the order impugned in this appeal was
passed by SEBI on May 15, 2018.

4.

The basic contention of the learned counsel for the appellant is that
since the freezing of his demat account as well as the demat account jointly
with his wife, he did not deal in the securities market from September 23,
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2017. Initially, for a period of two months from September 23, 2017 till
November 15, 2017, the restraint order was in operation.

Even after,
quashing the said order by this Appellate Tribunal on November 15, 2017,
the appellant restrained from dealing in the securities market till May 15,
2018 and from May 15, 2018 the impugned Order became operational and
till date he did not dealt in the securities market. Accordingly, taking all
these three periods into account, he has already undergone a total ban of
one year and four months upto January 25, 2019. He further pleaded that if
the ban is not removed forthwith he would be restrained for a total period of
18 months instead of 12 months as held in the impugned Order. He also
submits that the appellant was only an independent director of the company
and was not a promoter though he was wrongly disclosed as a promoter in
some of the documents filed by the company.

5.

In order to substantiate the submission that the appellant did not deal
in the securities market since September 23, 2017, the appellant filed an
affidavit attaching copies of the statements received from the Central
Depository Services Ltd. (‘CDSL’) regarding the appellant and his wife for
the period April 1, 2017 to December 11, 2018 and from September 25,
2017 to December 6, 2018 respectively. These statements are not disputed
by the counsel for Respondent, SEBI, on instructions.

6.

Given the above facts, while upholding the impugned order on merit
we are of the view that the period of prohibition of 8½ months that the
appellant has already undergone subsequent to the impugned Order is
sufficient to meet the ends of justice.

7.

In the light of the aforesaid the appeal is partly allowed. The restraint
order prohibiting the appellant from buying, selling or dealing in securities
either directly or indirectly or being associated with the securities market in
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any manner whatsoever, for a period of one year from the date of the
impugned order is modified and reduced till January 31, 2019.

8.

In the circumstances of the case, parties shall bear their own costs.

Sd/Justice Tarun Agarwala
Presiding Officer
Sd/Dr. C. K. G. Nair
Member
25.01.2019
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