BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI

         Appeal No.154 of 2011 

Date of Decision: 9.11.2011

Forever Merchants Pvt. Ltd.
25, Black Burn Lane,
4th Floor, Room No.404,
Kolkata – 700 012.

                  ….. Appellant 

Versus

Securities and Exchange Board of India
SEBI Bhavan, Plot No.C4-A, ‘G’ Block,
Bandra Kurla Complex, Bandra (East),
Mumbai – 400 051.

                  …...Respondent     

Mr. Zal Andhyarujina, Advocate with Mr. Ni shit Dhruva, Mr. R.S. Loona, Ms. Dhwani
Mehta and Mr. Abhishek Borgikar, Advocates for the Appellant.
Mr. Shiraz Rustomjee, Senior Advocate with Ms. Daya Gupta and Ms. Harshada Nagare,
Advocates for the Respondent.

CORAM : Justice N. K. Sodhi, Presiding Officer
P.K. Malhotra, Member
S.S.N. Moorthy, Member
Per : Justice N. K. Sodhi, Presiding Officer (Oral)

This order will dispose of two Appeals no.154 and 160 of 2011 both of which are
directed against the common order dated July 19, 2011 passed by the whole time member
of the Securities and Exchange Board of India (for s hort the Board) confirming the
ad-interim ex-parte order dated December 2, 2010 by which the appellants, among others,
have been restrained from accessing the securities market and prohibited from buying,
selling or dealing in securities till further directions. Admittedly, the investigations in the
matter are still on and the Bo ard has found that the scrip of five companies had been
manipulated and that a large number of ent ities had joined hands together in the
manipulation. The learned counsel appearing fo r the appellants contends that his clients
are similarly situated to the two entities refe rred to in para 28(b) of the impugned order
against whom the ad-interim directions have been revoked. Counsel for the parties have
taken us through the impugned order and also the ad-interim ex-parte order which was
treated as a show cause notice against the entities. Since the investigations are still
pending, it may not be appropria te for us to exam ine the merits of the contentions now

2
sought to be urged before us. We are informed that the investigations are in progress. In
this view of the matter, we dispose of the appeal with a direction to the Board to conclude
the investigations expeditiously and, in any case, before the end of this year. It will be
open to the Board to proceed against different entities on the basis of the findings
recorded in the investigations.

2. The learned counsel for the appellants have pointed out that their clients are
   investment companies and are holding shares of a large number of companies by way of
   investment and that in view of the falling market, they may be allowed to dispose of
   some of the scrips with a view to reduce their losses. The pr ayer appears to be
   reasonable. We, therefore, direct that the ap pellants may sell any or all the scrips which
   they are presently holding to safeguard against the erosion of the value of their portfolio.
   The details of the sales shall be furnished to the Board within 24 hours and the sale
   proceeds be invested in a fixed deposit(s) with a nationalised bank. The appellants shall
   not be allowed to withdraw monies from the fixed deposit(s) in cluding the interest
   thereon without the prior permission of the Board. Further, the appellants shall deposit
   the fixed deposit receipts with the Board. In case the appellants wish to deal with the sale
   proceeds lying in fixed deposit(s) or the intere st that accrues thereon, they shall seek the
   permission of the Board which should be cons idered expeditiously within a reasonable
   time. Liberty is given to the parties to apply in case of any difficulty. No costs.
   Sd/-
   Justice N.K.Sodhi
   Presiding Officer Sd/- P.K. Malhotra Member Sd/- S.S.N. Moorthy
   Member
   9.11.2011
   Prepared and compared by
   RHN

Download Order Copy