2025 (11) TMI 534 - AT - SEBI

Condonation refused for 1,059-day appeal delay where explanations were found palpably false and the application unsatisfactory

Khelo MCX Research Services Versus Securities and Exchange Board of India, Mumbai

SAT refused condonation of a 1,059-day delay in filing an appeal. The tribunal found the appellant's explanations-being ousted from home, financial ... Condonation of delay - delay of 1059 days in filing this appeal - appellant was ousted from his paternal house - facing financial difficulties - No knowledge about the impugned order as also the recovery proceedings - HELD THAT:- Appellant conduct is contrary to the averment that he was ousted from his home and that he learnt about SEBI’s order from the Crime Branch in Indore. We are conscious of the fact that procedural law is handmaid of justice and normally consider the delay aspect liberally. However, in cases where the litigant approaches with palpably incorrect and false statements, the same will have to deal with firmly. The cause shown for the condonation of delay is wholly unsatisfactory. Therefore, Misc. Application for condoning the delay is liable to be rejected and it is accordingly rejected. ISSUES PRESENTED AND CONSIDERED 1. Whether the delay of 1,059 days in presenting the appeal can be condoned. 2. Whether the explanation offered for the delay-(a) being ousted from paternal house causing lack of knowledge of the impugned order and recovery proceedings, and (b) learning of the order only upon contact by the Crime Branch-is satisfactory and bona fide. 3. The legal consequences of the appellant's prior participation in regulatory proceedings before the authority on the question of condonation of delay. 4. Whether manifestly incorrect or false averments in the condonation application justify rejection of the application and dismissal of the appeal notwithstanding the general liberality in procedural law. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Condonation of delay (legal framework) Legal framework: The Tribunal exercises judicial discretion to condone delay in filing appeals, ordinarily applying a liberal approach in view of the maxim that procedural law is a handmaid of justice. The applicant bears the burden of explaining delay with satisfactory and bona fide reasons. Precedent Treatment: The Court reaffirmed the established approach of liberality in condoning delays but qualified it by referring to the settled principle that relief will be denied where explanations are palpably false or prima facie falsehoods are shown. Interpretation and reasoning: The Tribunal examined the length of delay (about three years), the material placed on record in the condonation application, and the surrounding circumstances. The Tribunal emphasized that a liberal approach does not extend to cases where the applicant's averments are inconsistent with recorded conduct and available material. Ratio vs. Obiter: Ratio - A long delay requires a cogent, credible, and documentary explanation; mere bald or implausible assertions will not suffice. Obiter - The general maxim of procedural liberality remains applicable but is not absolute. Conclusion: The Tribunal found the explanation for the delay legally inadequate; condonation was liable to be rejected. Issue 2 - Sufficiency and bona fides of the appellant's explanation Legal framework: Explanations for delay must be supported by credible evidence and consistent with a party's conduct; affidavits and contemporaneous notices, if relied upon, must reflect true circumstances. Precedent Treatment: The Tribunal followed the principle that where an applicant has engaged in the underlying proceedings or otherwise displayed conduct inconsistent with claimed ignorance, courts may infer lack of bona fides and reject the explanation. Interpretation and reasoning: The Tribunal scrutinized the affidavit of the appellant's mother and a public notice purporting to show ouster from home, alongside averments that the appellant only learned of the impugned order upon a Crime Branch call in June 2024. The Tribunal found contradictions: (a) the appellant had participated in SEBI proceedings; (b) the application itself records family involvement and attendance on family matters (sister's matrimonial issues, father's illness) during relevant periods; (c) no independent material corroborated the asserted discovery of the order through the Crime Branch; and (d) the suggestion that a local Crime Branch would have notified the appellant about a SEBI order was implausible. Ratio vs. Obiter: Ratio - Where the claimed cause for ignorance of a decision is contradicted by the party's own participation in proceedings and by other averments, the explanation is prima facie unreliable. Obiter - Authorities are expected to coordinate such administrative information, but lack of such coordination cannot excuse deliberate non-action by a litigant. Conclusion: The Tribunal concluded the explanation lacked bonafides and was wholly unsatisfactory; the appellant's averments were palpably incorrect or false for the purposes of condonation. Issue 3 - Effect of prior participation in regulatory proceedings on delay excuse Legal framework: Active participation in the administrative/regulatory proceedings from which appeal arises is relevant and material to an applicant's asserted ignorance of the resulting order; it undermines claims of non-receipt or lack of knowledge. Precedent Treatment: The Tribunal applied settled doctrine that participation in the parent proceeding is a strong indicium against claims of ignorance and weakens excuses for delay. Interpretation and reasoning: The appellant's recorded participation in the SEBI proceedings was given weight. The Tribunal reasoned that an appellant who engaged with the authority and replied to a show cause notice cannot legitimately claim complete ignorance of the final order without compelling supporting evidence. Ratio vs. Obiter: Ratio - Prior engagement with the regulatory process is a relevant factor militating against condonation when ignorance of the order is asserted without corroboration. Obiter - Administrative systems may fail, but absent evidence of such failure, the party must demonstrate due diligence. Conclusion: The appellant's prior participation significantly undermined the explanatory narrative and supported rejection of condonation. Issue 4 - Rejection of condonation application for palpably incorrect or false statements Legal framework: Courts will refuse discretionary relief, including condonation of delay, where the applicant advances statements that are palpably incorrect or false, as such conduct defeats the equitable basis for seeking indulgence. Precedent Treatment: The Tribunal adhered to the principle that the discretion to condone delay is not exercised in favour of a litigant who approaches the court with demonstrably false averments. Interpretation and reasoning: Applying that principle, the Tribunal treated the inconsistencies and implausibilities in the condonation affidavit as fatal. The Tribunal observed that liberal treatment of procedural defaults does not extend to rewarding insincerity; fairness to the respondent and institutional integrity require firm treatment of falsehoods. Ratio vs. Obiter: Ratio - Palpably false or inconsistent explanations in a delay condonation application justify rejection of the application. Obiter - The Tribunal's remark on institutional integrity and firmness is explanatory but aligns with the operative rule. Conclusion: The Tribunal rejected the condonation application on the stated ground of palpably incorrect/false statements and absence of credible justification. Consequential Determination Interpretation and reasoning: Given the rejection of the condonation application, the statutory time-bar could not be excused; the Tribunal therefore dismissed the appeal as time-barred. Pending interlocutory applications were disposed of. The Tribunal exercised its discretion to award no costs. Ratio: Dismissal of the appeal followed directly from the legally adequate refusal to condone delay based on lack of bona fide explanation and demonstrable inconsistency.