2020 (2) TMI 133 - SCH - SEBI

Supreme Court: Dilution of Adverse Remarks, Importance of Prompt Complaint Handling

Securities and Exchange Board of India Versus Ashok Dayabhai Shah

The Supreme Court diluted adverse observations made in Paragraph No. 20 of the impugned order, noting that remarks were unnecessary and casting aspersions ... Dilution of adverse observations - HELD THAT:- Certain observations made in Paragraph No. 20 of the impugned order were not called for, such as 'the computer generated disposal of a serious complaint speaks volume on the conduct of the respondents' as well as the part of the order relating to 'vested interest in not deciding the matter' were not at all called for. May be there was some remiss on the part of SEBI to act as a regulator, but casting aspersion was not warranted in the facts and circumstances of the case. As such, the adverse observations made in Paragraph No. 20 are hereby diluted. As prayed for, time is granted to deal with the complaints positively and objectively within four months from today in accordance with law. Appeal is disposed of. Issues involved:Observations made in Paragraph No. 20 of the impugned order, dilution of adverse observations, granting time to deal with complaints, not going into the merits of the case.Analysis:The Supreme Court, comprising Justices Arun Mishra and Indira Banerjee, heard the senior counsels for both parties at length. The Court noted that certain observations in Paragraph No. 20 of the impugned order, such as remarks on the conduct of the respondents and the vested interest in not deciding the matter, were unnecessary. The Court acknowledged a possible oversight by the Securities and Exchange Board of India (SEBI) in its regulatory role but found that casting aspersions was unwarranted in this case. Consequently, the adverse observations in Paragraph No. 20 were diluted by the Court.Upon considering the circumstances, the Court granted time for dealing with the complaints positively and objectively within four months from the date of the order, in compliance with the law. The Court clarified that it had not delved into the merits of the case, as the complaints fell under the jurisdiction of SEBI. Therefore, the Court refrained from making any observations on the remaining aspects of the case, given the limited relief sought by the appellant.In conclusion, the appeal was disposed of by the Court, and the signed order was to be followed. Any pending interlocutory applications were also disposed of as per the Court's decision. The judgment emphasized the need to address the complaints in a timely and lawful manner while refraining from making unwarranted aspersions against the parties involved.