BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Order Reserved on : 1.8.2019
Date of Decision : 7.8.2019
Misc. Application No.98 of 2018
And
Appeal No.115 of 2018
Quantum Securities Private Limited
103, AVG Bhavan,
M-3 Connaught Circus,
New Delhi-110001.
….. Appellant
Versus
1. Securities & Exchange Board of India
Plot No.C-4/A,
G Block, BKC, Bandra (East),
Mumbai – 400051.
2. New Delhi Television Limited
207, Okhla Industries Estate,
Phase III, New Delhi – 110020.
…… Respondents
Mr. Sandeep Parekh, Advocate with Ms. Deepika Goyal,
Advocate i/b. Finsec Law Advisors for the Appellant.
Mr. Sumit Rai, Advocate with Mr. Abhiraj Arora and Mr.
Vivek Shah, Advocate i/b. ELP for the Respondent No.1.
Mr. Lukesh Aidasani, Advocate i/b. DMD Advocates for the
Respondent no.2.
CORAM: Justice Tarun Agarwala, Presiding Officer
Dr. C.K.G. Nair, Member
Per : Justice Tarun Agarwala
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Misc. Application No.98 of 2018
For the reasons stated in the application, the delay in
filing the appeal is condoned.
The Misc. Application is allowed.
Appeal No.115 of 2018
1.
The appellant is a private Company and is a minority
shareholder in New Delhi Television Ltd. (hereinafter
referred to as ‘NDTV’). With regard to non-disclosure of a
tax demand under Clause 36 of the Equity Listing Agreement
prescribed by the Stock Exchange (hereinafter referred to as
‘Listing Agreement’) by the Company, the appellant made a
complaint to the stock exchange as well as to the Securities
and Exchange Board of India (hereinafter referred to as
‘SEBI’), based on which adjudication proceedings were
initiated by the Adjudicating Officer under Sections 23A and
23E of the Securities and Exchange Board of India Act, 1992
(hereinafter referred to as ‘SEBI Act’) read with 23-I of the
Securities Contracts (Regulation) Act, 1956 (hereinafter
referred to as ‘SCRA’). These proceedings culminated in an
order being passed by the Adjudicating Officer dated
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4th June, 2015 wherein the Company NDTV was imposed a
penalty of Rs.2 crore.
2.
The appellant being aggrieved by the said order filed
Appeal no.343 of 2015 contending that the penalty of Rs.2
crores should not have been imposed upon the Company but
should have been imposed on the Key Managerial Personnel
of the Company who took a conscious decision of not
disclosing the event under Clause 36 of the Listing
Agreement.
3.
The appellant prayed that the order of the Adjudicating
Officer dated 4th June, 2015 should be quashed and the
matter should be remanded to the Adjudicating Officer to
pass a fresh order on penalty on Key Managerial Personnel.
The Tribunals while considering the matter disposed of the
appeal permitting the appellant to make a fresh representation
to SEBI with regard to the grievances made in the appeal.
For facility the order of the Tribunal dated 10th October, 2017
is extracted hereunder:
“1. After the matter was argued for some time,
counsel for the appellant states that in relation to the
grievances made in the appeal, the appellant would
make a fresh representation within a period of two
weeks from today before the Securities and Exchange
Board of India (“SEBI” for short).
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2. If the appellant makes a representation within two
weeks from today then the appropriate authority of
SEBI shall consider the said representation and pass
appropriate order thereon in accordance with law
within a period of eight weeks from the date of
receiving the representation.
3. Appeal is disposed of in the aforesaid terms with
no order as to costs.”
4.
It transpires that a modification application was filed
for modification of the order dated 10th October, 2017. The
said application was rejected by an order dated 12th October,
2017. The relevant extract of the order dated 12th October,
2017 passed by the Tribunal is extracted hereunder:
“1.
Not on board. Taken up by consent of parties.
2. By this misc. application, the applicant seeks
modification of our order passed in aforesaid appeal on
October 10, 2017.
3. First Grievance of the applicant is that in para 1
of our order it is recorded that counsel for the appellant
has agreed to make a fresh representation to SEBI
when in fact the suggestion was made by counsel for
SEBI and not by the counsel for the appellant. Since
counsel for appellant has accepted the suggestion, we
see no reason to modify our order.
4. Second grievance of the applicant is that the
applicant must be permitted to make representation on
all issues relating to the violation of securities laws by
the respondent No.2 and not restricted to the violation
set out in the appeal.
5. In our opinion, permitting the appellant to make
representation on issues which are not subject matter of
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appeal would amount to enlarging the scope of the
representation beyond the grievances set out in the
memo of appeal. Therefore, we see no reason to modify
our order on this issue as well.
6. Accordingly, we see no merit in the misc.
application and the same is hereby dismissed with no
order as to costs.”
5.
It was categorically asserted that the representation
would only contain the issue which was the subject matter of
the appeal and other issues would not be entertained as it
would amount to enlarging the scope of the representation
beyond the grievances set out in the memo of appeal.
6.
Based on the orders of the Tribunal dated 10th October,
2017 and 12th October, 2017, a representation was filed
which was rejected by the Whole Time Member (hereinafter
referred to as ‘WTM’) by an order dated 20th December,
2017. The appellant being aggrieved by the said order has
filed the present appeal.
7.
In the representation, the appellants had enumerated
that the violations which is alleged to have been made by the
Company NDTV was required to be investigated and
appropriate orders were required to be passed. The WTM
found that out of the nine violations only two violations
formed the cause of grievance which was mentioned in the
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appeal filed before this Tribunal.
The remaining seven
violations so alleged were beyond the scope of the directions
of this Tribunal. On the two violations which were part of
the appeal, the WTM held that the complaint of the appellant
in this regard was considered and appropriate orders of
penalty was passed against the Company.
8.
We have heard the learned counsel for the parties.
9.
Before this Tribunal it was asserted that the imposition
of Rs.2 crores was only made against the Company whereas
the penalty should have been imposed against the Key
Managerial Personnel of the Company which has not been
done.
In our opinion, this contention is wholly
misconceived.
We find that parallel proceedings for the
same offence, namely, violation of Clause 36 of the Listing
Agreement was also initiated against Key Managerial
Personnel which also culminated into an order dated
16th March, 2018 being passed by the Adjudicating Officer
under Section 15A(b) of the SEBI Act as well as under
Section 23A(a) and Section 23E of the SCRA for violation of
Regulation 13(6) of SEBI (Prohibition of Insider Trading)
Regulations (“PIT Regulations” for convenience) read with
Clauses 2.1 and 7.0(ii) of Schedule II for Code of Corporate
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Disclosure Practices for Prevention of Insider Trading
specified in Schedule II read with Regulation 12(2) of PIT
Regulations as well as violation of Clause 36 of the Listing
Agreement imposing penalties against the Key Managerial
Personnel. Thus, the grievance of the appellant to the extent
that the Key Managerial Personnel should be penalized has
now been set at rest.
10. The contention of the appellant that the remaining
seven alleged violations should also be considered as they
were part of the appeal that was filed before this Tribunal is
patently misconceived. In this regard, the learned counsel
tried to impress upon the Tribunal by placing reliance on the
additional affidavit dated 17th November, 2015 contending
that the said affidavit was part of the record of the Tribunal
which contained the allegations and, therefore, the said
allegations were required to be considered by the WTM.
11. The contention of the learned counsel for the appellant
is patently misconceived and cannot be accepted. The order
of the Tribunal dated 12th October, 2017 clearly rejected the
contention of the appellant for making the representation on
issues other than the issue which related to the order dated 4th
June, 2015.
The Tribunal rejected the modification
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application holding that permitting the appellant to make a
representation on issues which are not the subject matter of
appeal would amount to enlarging the scope of the
representation beyond the grievances set out in the memo of
appeal. Thus, the allegations made in the additional affidavit
could not be considered.
In any case, we find that the
additional affidavit on which reliance has been made was
filed on 17th November, 2015 much after the disposal of the
appellant’s appeal on 10th October, 2017 and disposal of his
modification application dated 12th October, 2017.
Any
additional affidavit filed after the disposal of the appeal
cannot form part of the memo of appeal.
12. In the light of the aforesaid, the appeal is devoid of any
merit and is dismissed.
Sd/Justice Tarun Agarwala
Presiding Officer
Sd/Dr. C. K. G. Nair
Member
7.8.2019
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