BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Order Reserved on :16.7.2019
Date of Decision : 22.7.2019
Misc. Application No.199 of 2018
And
Appeal No.233 of 2018
1. Mr. Indranath Daw
153/1A, Diamond Harbour Road,
Kolkata-700 034.
2. Mr. Biswarup Santra
Prateek Apartment, Flat No.1A & 1B,
61/25, Manick Bandhopadhyay Sarani
(Moore Avenue), Kolkata 700 040.
3. Mr. Souvik Sankar Ray
P-164C, Metropolitan Cooperative
Housing Society, Sector A,
EM Bypass, Kolkata 700 105.
4. Mr. Subhranath Daw
Flat no.203, Lake View Residency,
4, Gafoor Nagar, Madhapur,
Hyderabad -500 081.
5. Mr. Saumya Banerjee
G-2-49 New, Green Park Road -7,
Amartya Gardens,
PS: Maheshtala, PO: Raipur,
24 Pargannas (South) -700 141.
6. Mr. Arjit Ghosh
153/1A, Diamond Harbour,
Kolkata-700 034.

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7. Mr. Dipanshu Acharjee
51, Garfa Sitala Mandir Road,
Kolkata 700075.

….. Appellants
Versus
Securities & Exchange Board of India
SEBI Bhawan, Plot No.C-4A, G Block,
Bandra-Kurla Complex,
Bandra (East), Mumbai – 400050.

…… Respondent
Mr. Bimal Rajasekhar, Advocate with Mr. Rahul Das,
Advocate i/b. Finsec Law Advisors for the Appellant.
Mr. Sumit Rai, Advocate with Mr. Vivek Shah, Advocate i/b.
ELP for the Respondent.
CORAM: Justice Tarun Agarwala, Presiding Officer
Dr. C.K.G. Nair, Member
Justice M.T. Joshi, Judicial Member
Per : Justice Tarun Agarwala
1.

The present appeal has been filed against the order
dated 15th January, 2016 passed by Securities and Exchange
Board of India (hereinafter referred to as ‘SEBI’) in the
matter of MaxBe Green Provision Limited directing the
appellants to refund an amount of Rs.1,36,00,000/- alongwith
interest raised through the issuance of redeemable preference
shares. The appellants have also challenged the consequential
attachment orders dated 25th August, 2017 issued by the
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Recovery Officer of SEBI attaching the bank accounts and
the demat accounts of the appellants.
2.

There is a delay of 860 days in filing the appeal and
accordingly M.A. No. 199 of 2018 has been filed for
condoning the delay. This application has been opposed by
the respondent.
3.

We have heard Mr. Bimal Rajasekhar, Advocate
assisted by Mr. Rahul Das, Advocate for the Appellant and
Mr. Sumit Rai, Advocate assisted by Mr. Vivek Shah,
Advocate for the Respondent.
4.

It was contended that the appellants are Directors of the
said Company and pursuant to the impugned order the
appellants co-operated with the respondent to arrive at a
practical resolution in the matter. It was contended that they
made attempts to comply with the impugned order and tried
to mobilize the resources necessary for implementing the
directions contained in the impugned order including the
refund of monies to the investors. It was contended that they
made continuous effort to resolve the matter and when there
was no positive outcome the present appeal was filed. It was
contended that the appellants have acted in a bonafide
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manner and co-operated with the respondent to find a
practical way to effectively implement the directions
contained in the impugned order. It was contended that in
this regard, various letters were written to SEBI for necessary
directions which will show that the appellants had bonafide
intention to implement the order.
5.

It was, thus, contended that sufficient cause has been
shown for condoning the delay and the said application for
condoning the delay should be considered alongwith the
merits of the appeal. It was contended that the impugned
order if heard on merits would point out grave infirmities and
that the appellants have a great chance of success. It was
contended that in a similar matter this Tribunal in Pritha Bag
vs. SEBI, Appeal No.291 of 2017 decided on 14th February,
2019 had allowed the appeal of the said appellant and
exonerated her from the responsibility of complying with the
directions of the impugned order. Reliance was also placed
on the decision of this Tribunal in Misc. Application no.292
of 2015 and Appeal no.423 of 2015 Alchemist Holdings Ltd
and Ors. vs. SEBI decided on 29th June, 2018 wherein it was
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held that the refund of interest cannot be compounded at half
yearly intervals.
6.

On the question of delay, the learned counsel has placed
reliance upon the decision of this Tribunal in Jindal Dyechem
Industries Pvt. Ltd., Misc. Application No.220 of 2018 and
Appeal No.268 of 2018 decided on 24th January, 2019,
decision of the Supreme Court in Noted Infortech P. Ltd. vs.
SEBI, Civil Appeal No.4649 of 2006 decided on 4th August,
2008, decision of this Tribunal in SLA Securities Ltd. vs. Mr.
S. Raman, WTM, SEBI & Ors., Misc. Application No.236 of
2017 and Appeal No.229 of 2017 decided on 7th May, 2018,
decision of the High Court of Sikkim in Ram Kumar Goyel
and Ors. vs. Bhuwan Singh Pradhan, AIR 2007 Sik 39
decided on 26th September, 2006, decision of the Hon’ble
Supreme Court in Ram Nath Sao and Ors. vs. Gobardhan Sao
and Ors., AIR 2002 SC 1201 decided on 27.2.2002, and
decision of the Hon’ble Supreme Court in Collector, Land
Acquisition, Anantnag and Ors. vs. Katiji and Ors., Civil
Appeal No.460 of 1987 decided on 19th February, 1987.
7.

On the other hand, the learned counsel for the
respondent submitted that a perusal of the correspondence
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with SEBI clearly indicates that the appellants have accepted
the impugned order and were making every effort of
implementing and complying with the directions and,
therefore, cannot turn around at this stage and contend that
the impugned order was bad in law. It was contended that in
any case the appellants have acquiesced in the impugned
order and cannot challenge the same at this belated stage. It
was also contended that the conduct of the appellant was not
bonafide and, in any case, sufficient cause has not been
shown for condoning the delay.

In support of their
contention, the learned counsel has placed reliance in
Basawaraj and Anr. vs. Special Land Acquisition Officer,
(2013) 14 SCC 81 on the issue that the discretion to condone
the delay has to be exercised judicially based on facts and
circumstances of each case and that sufficient cause cannot
be given a liberal interpretation if lack of bonafide is
attributed to a party. The Supreme Court further held that
delay cannot be condoned on equitable ground beyond the
limits permitted expressly by statute.
8.

Having heard the learned counsel for the parties we are
of the opinion that there has been an inordinate delay in
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approaching the Tribunal questioning the veracity and
legality of the impugned order and the attachment orders.
We are unable to comprehend that even after the attachment
of the appellant’s bank account and demat account was
frozen in August, 2017 the appellants took no steps to file the
appeal. In our opinion, there has been a substantial delay in
filing the appeal for which no sufficient cause has been
shown.
9.

From a perusal of the correspondence made by the
appellant with SEBI it is apparently clear that the appellants
accepted the directions given in the impugned order and were
making efforts to mobilise funds for the purpose of refunding
the monies to the investors. We are thus of a prima facie
opinion that the appellant had acquiesced in the impugned
order and, therefore, after more than two years from the date
of the passing of the impugned order cannot turn around and
contend that the impugned order was manifestly erroneous in
law.
10. The Supreme Court in Ram Nath Sao and Ors. (supra)
held that the expression ‘sufficient cause’ should receive a
liberal construction so as to advance substantial justice when
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no negligence or inaction or want of bonafide is imputable to
a party. The same view was reiterated by the Supreme Court
in Madanlal vs. Shyamlal, (2002) 1 SCC 535.
11.

In Balwant Singh (Dead) vs Jagdish Singh & Ors,
(2010) 8 SCC 685 Supreme Court held that the expression
“sufficient cause” means the presence of legal and adequate
reasons. The decisions cited by the learned counsel for the
appellant are of no avail and, in any case, not applicable in
the present circumstance of the case.
12. This Tribunal is possessed with the exercise of judicial
discretion in condoning the delay if sufficient or adequate
reason is given. It is also a settled proposition of law that the
law of limitation may harshly affect a particular party but it
has to be applied with all its rigour when the statute so
prescribes. The court has no power to extend the period of
limitation on equitable grounds as held by the Supreme Court
in Basawaraj and Anr. (supra).
13. In the instant case, we find that the conduct of the
appellant was not bonafide. They accepted the decision of
SEBI and were making efforts to mobilise the funds in order
to comply with the direction contained in the order. After
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two years the appellants changed their mind and, therefore,
their contention that the impugned order is incorrect is not
bonafide.

We are of the opinion that an application for
condonation of delay cannot be allowed as a matter of right
or in a routine manner on payment of cost especially in the
absence of adequate or legal reason. In the instant case, we
find no adequate or legal reason existing to condone the
inordinate delay.

Consequently, we do not find any
substantial reason to condone the delay in filing the appeal.
The Misc. Application for condonation of delay is rejected as
a result of which the appeal is also dismissed without any
order as to costs.
Sd/Justice Tarun Agarwala
Presiding Officer
Sd/Dr. C. K. G. Nair
Member
Sd/Justice M.T. Joshi
Judicial Member
22.7.2019
Prepared and compared byp
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