Securities Appellate Tribunal, Mumbai (SAT): The Coram of Tarun Agarwala, J (Presiding Officer) and M.T. Joshi, J (Judicial Member), while withdrawing the attachment order on account of old age and medical exigencies, directed the Appellants to deposit a sum of Rs.2000 crore before SEBI. However, the time given to deposit the amount is four weeks pursuant to which the attachment order against the Company and its Directors will be lifted. It also very sternly pointed to the fact that no serious attempt was made to argue on the interim relief. And despite being aware of the fact that the Recovery Officer had initiated proceedings under Section 28A of the SEBI Act, the appellants did not bring it before the Tribunal. Holding it, the Coram stated,
“…we are of the opinion that even though it would have been appropriate for the respondent to await the result of the decision of this Tribunal, however, there is no embargo upon the Recovery Officer to proceed independently to recover the amount under Section 28A of the SEBI Act since there was no stay of the impugned order”.
In the present matter, the order of SEBI was challenged stating that SEBI directed the appellant to jointly and severally refund the monies collected by the Company and its Directors through issuance of Optionally Fully Convertible Debentures (OFCDs) including the application money collected from investors pending allotment of securities along with interest of 15% per annum. The appellants were further restrained from accessing the securities market till four years from the date of the refund. The Company was also directed to provide a full inventory of all the assets and properties and details of bank accounts, demat accounts and holdings of mutual funds/shares/securities, if held in physical form and demat form.
Counsel for the appellants submitted that ‘there was no tearing hurry’ and the Recovery Officer should have awaited the result of the appeal instead of attaching the bank accounts of the Company and its Directors. It was further submitted that salaries to employees, taxes to the government and other business expenditure are required to be made on a daily basis which has come to a halt on account of the attachment order. It was urged that the Company cannot survive unless it has funds to run and manage the affairs of the Company. It was thus contended that it is essential for this Tribunal to lift the attachment order otherwise there would be a colossal damage.
Counsel for the respondents submitted that the appeal of the appellants becomes infructuous by attaching the recovery of the impugned amounts.
The Tribunal considering the factual matrix, the capacity to deposit and the aim to balance the equities, till the pendency of the trial, thus held that the appellants are required to refund a sum of Rs.14,106 crores along with interest at the rate of 15 percent per annum to the investors, which is again subject matter of appeal. Therefore, the Tribunal directed the Appellants to deposit a sum of Rs.2000 crores before SEBI, pursuant to which attachment orders will be lifted. And while considering the relevant reasons of Lt. Gen (Retd.) A.S. Rao and Shri Ranoj Das Gupta, directed to withdraw their attachment orders forthwith. Further, the Appellants were directed to provide a full inventory of all the assets and properties and details of all the bank accounts in India and abroad, demat accounts and holding of mutual funds/shares/securities.[Sahara India Commercial Corporation Ltd (SICCL) v. SEBI, Misc. Application No.440 of 2019 In Appeal No.250 of 2019, decided on 18-11-2021]
Agatha Shukla, Editorial Assistant has reported this brief.
Counsel for the Parties:
Mr. Gaurav Joshi, Senior Advocate with Mr. Feroze Patel, Mr. Satyen Vora, Mr. Ankur Kalal, Mr. Jigar Shah, Advocates i/b. M/s. Markand Gandhi and Co. for the Appellants.
Mr. Rafique Dada, Senior Advocate and Mr. Kevic Setalvad, Senior Advocate with Mr. Mihir Mody, Ms. Sneha Prabhu, Mr. Arnav Misra, Mr. Mayur Jaisingh, Advocates i/b K. Ashar & Co. for the Respondent.
Mr. Somasekhar Sundaresan, Advocate with Ms. Neeta Jain, Mr. Satyen Vora, Mr. Ankur Kalal, Mr. Jigar Shah, Advocates i/b. M/s. Markand Gandhi and Co. for the Appellants.
Mr. Kevic Setalvad, Senior Advocate with Mr. Mihir Mody, Ms. Sneha Prabhu, Mr. Arnav Misra, Mr. Mayur Jaisingh, Advocates i/b. K. Ashar & Co. for the Respondent.
