2014 (1) TMI 1659 - AT - Companies Law

SEBI Appeal: Disputed Interest Liability, Bank Account Attachment, Debarment Lifted

Mr. Dushyant N. Dalal Versus Securities and Exchange Board of India

The appeal was filed challenging SEBI's order attaching bank accounts to recover amounts under a disgorgement order. The appellants were directed to ... Attachment of bank accounts - Challenge of SEBI's disgorgement order - whether appellants are liable to pay interest on disgorgement amount till ₹ 6 crore is paid by appellants - Held that:- Counsel for respondent, though objects to lifting attachment levied on various bank accounts, he does not dispute that value of shares in Demat A/c no. 40333429 are sufficient to cover demands raised against appellants. In these circumstances, since no prejudice is likely to be caused to respondent, we direct that shares in joint demat Account No. 40333429 of appellants shall stand attached forthwith and in lieu thereof attachment levied on all other bank accounts of appellants shall stand raised forthwith. - Since appellants desire to file appeal against communication dated January 16, 2014, respondent shall not take coercive steps to enforce demand for a period of four weeks from today. - Appellants would like to make an application to SEBI for lifting additional debarment imposed, if such an application is made within a period of two weeks from today, SEBI shall consider the same and pass appropriate order within a period of six weeks thereafter. Issues:1. Challenge to SEBI's order attaching bank accounts for recovery under disgorgement order.2. Liability of appellants to pay interest on disgorgement amount.3. Dispute over the demand notice for interest on disgorgement amount.4. Attachment and lifting of attachment on bank accounts and shares in demat account.5. Application for lifting additional debarment imposed by SEBI.Analysis:1. The appeal was filed to challenge SEBI's order attaching various bank accounts to recover amounts due under a disgorgement order dated July 21, 2009. The appellants were directed to disgorge an unlawful gain of Rs. 4.05 crore with interest at 12% for four years. The Tribunal had dismissed the appeal against the disgorgement order, which was upheld by the Apex Court, leading to the attachment of bank accounts by SEBI.2. A key issue was whether the appellants were liable to pay interest on the disgorgement amount until they paid Rs. 6 crore to the respondent during the appeal's pendency. SEBI demanded Rs. 2,13,30,000 as interest on the disgorgement amount, which the appellants denied. The Tribunal considered the demand and the appellants' payment of Rs. 6 crore, deliberating on the interest liability.3. The communication from SEBI confirming the demand raised further questions regarding the interest amount. The appellants expressed their intention to file an appeal against the communication, emphasizing the need for a fair resolution. The Tribunal had to decide on the validity of the demand and the appellants' obligation to pay the specified interest amount.4. Regarding the attachment of bank accounts, the Tribunal lifted the attachment on three accounts subject to certain conditions. Both parties acknowledged that the value of shares in a joint demat account was sufficient to cover the demands. The Tribunal directed the attachment of shares in the demat account while lifting the attachment on other bank accounts, ensuring the security of the demanded amount.5. The appellants sought to make an application to SEBI for lifting the additional debarment imposed due to non-compliance with the disgorgement order. They expressed their intent to submit the application within a specified period, requesting SEBI to consider and decide on the matter promptly. The Tribunal disposed of the appeal with specific directives, allowing the appellants to pursue the application for lifting the debarment.