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of <h1>Petition Dismissed: Court Requires Exhaustion of Appeal Remedy Under Section 15T of SEBI Act Before Article 226 Relief</h1> <h3>Peers Allied Corporation Limited Versus Securities And Exchange Board Of India</h3> Peers Allied Corporation Limited Versus Securities And Exchange Board Of India - TMI 1. ISSUES PRESENTED and CONSIDEREDThe core legal issues considered in this judgment are:- Whether the attachment notices issued by the Recovery Officer under the SEBI Act, 1992, and the Income Tax Act, 1961, are valid and enforceable.- Whether the petitioner can seek relief under Article 226 of the Constitution of India, given the existence of an alternate statutory remedy under the SEBI Act.- Whether the principle of double jeopardy applies to the proceedings initiated by SEBI against the petitioner.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Validity of Attachment Notices- Relevant legal framework and precedents: The attachment notices were issued under Section 28A(1)(b) and 11(2)(ia) of the SEBI Act, 1992, read with Section 226 of the Second Schedule of the Income Tax Act, 1961. These provisions empower SEBI to recover penalties by attaching and selling the defaulter's properties.- Court's interpretation and reasoning: The Court noted that the attachment orders stemmed from a penalty imposed by SEBI for operating a Collective Investment Scheme without registration. The Court emphasized that the petitioner had an alternate remedy to challenge these orders under Section 15T of the SEBI Act.- Key evidence and findings: The adjudication order dated 23rd January 2020 imposed a penalty of INR 25 lakhs on the petitioner, which was not paid, leading to the attachment proceedings.- Application of law to facts: The Court found that the petitioner had not exhausted the statutory remedy of appeal available under the SEBI Act, which should have been the first course of action before approaching the Court under Article 226.- Treatment of competing arguments: The petitioner's argument that the penalty was unjust due to partial refunds to investors was countered by SEBI's counsel, who highlighted the availability of an appeal process.- Conclusions: The Court concluded that the attachment notices were procedurally valid, and the petitioner should seek recourse through the statutory appeal process.Issue 2: Availability of Relief under Article 226- Relevant legal framework and precedents: Article 226 of the Constitution provides for the issuance of writs by High Courts. However, when an alternate statutory remedy is available, courts generally refrain from exercising this jurisdiction.- Court's interpretation and reasoning: The Court emphasized that the existence of an alternate remedy under the SEBI Act precluded the need to entertain the writ petition.- Application of law to facts: The Court noted that the petitioner had not availed the appellate remedy under Section 15T of the SEBI Act, which was the appropriate forum for addressing grievances related to the attachment orders.- Conclusions: The Court decided not to entertain the writ petition due to the availability of an alternate statutory remedy.Issue 3: Principle of Double Jeopardy- Relevant legal framework and precedents: The principle of double jeopardy, as enshrined in Article 20(2) of the Constitution, prevents a person from being prosecuted and punished for the same offense more than once.- Court's interpretation and reasoning: The Court did not delve deeply into the double jeopardy argument, as it was primarily focused on the procedural aspects of the case. However, it acknowledged the petitioner's claim of multiple proceedings.- Conclusions: The Court left the merits of the double jeopardy claim open for consideration by the appropriate appellate authority.3. SIGNIFICANT HOLDINGS- Core principles established: The judgment reinforced the principle that when a statutory remedy is available, it should be exhausted before invoking the writ jurisdiction of the High Court. The Court also highlighted the procedural validity of SEBI's attachment orders under the relevant statutory framework.- Final determinations on each issue: The Court disposed of the writ petition, directing the petitioner to file an appeal within thirty days, which would not be barred by limitation due to the peculiar facts of the case. The Court made it clear that it had not commented on the merits of the case, leaving all rights and contentions open for the appellate authority to decide.
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