2025 (11) TMI 966 - AT - SEBI

Review applications dismissed; factual findings upheld as record-based, A.O. orders set aside and remitted for fresh disposal

Arvind Babulal Goyal, Abhay Javlekar Versus Securities and Exchange Board of India, Mumbai

AT dismissed both review applications. The Tribunal held the original factual findings were based on appraisal of the record and not mere affidavits, so ... Review jurisdiction of the Tribunal - violations have neither been recorded nor dealt with - allegation in the show cause notice against the applicant is that he was a ‘Person Acting in Concert’ - Imposition of penalty for violation of SAST Regulations - SEBI is seeking this Tribunal to consider and render findings with respect to findings on violations as set out in A.O.’s order Review application filed by the Abhay Javlekar - HELD THAT:- In our view, the finding of tribunal is not based only on affidavit but on other materials also. In any event, it is a finding returned on appreciation of material on record. Learned Advocate for the appellant is right in his submission that a finding of a fact recorded by a co-ordinate bench cannot be reversed in a review application, since it is not an error apparent on the face of a record but a finding based on material on record. Therefore, the review application is meritless and liable to dismissed. Review application filed by the SEBI - learned Advocate for the applicant is that the impugned order is based on the facts contained in WTM’s order - Tribunal has not taken into consideration the other findings recorded in A.O.’s order - HELD THAT:- Both orders passed by WTM as well as the A.O. are based on same set of facts and therefore, SEBI’s contention that facts in A.O’s order have not been considered is hyper technical and not a ground to review and upset a finding rendered on facts of the case by a coordinate bench. No error apparent on the face of record warranting interference while exercising review jurisdiction is pointed out. Hence, in our view, the review application filed by the SEBI is also meritless. In any event, the orders passed by the A.O. have been set aside and remitted for fresh disposal. In the result, both Review Applications are dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether a review application is maintainable to re-open or re-appreciate factual findings recorded by a coordinate bench of the Tribunal, absent an error apparent on the face of the record. 2. Whether an affidavit filed after adjudication (containing call records and asserting who placed orders) and not served on the affected party can provide grounds for review of the Tribunal's factual finding that the affected party placed the orders from his trading account. 3. Whether the Tribunal's common order disposing of multiple appeals that arise from different adjudicatory orders (Adjudicating Officer's order and Whole Time Member's order) failed to consider material findings from either order so as to justify review. 4. Whether remittance of matters to the Adjudicating Officer for fresh disposal, and setting aside of AO orders, amounts to a decision susceptible to review by the Tribunal at SEBI's instance on the ground that certain violations recorded by the AO were not separately dealt with. ISSUE-WISE DETAILED ANALYSIS Issue 1: Reviewability of factual findings of a coordinate bench Legal framework: Review jurisdiction of the Tribunal is confined to correction of errors apparent on the face of the record and not to rehearing or re-appreciation of evidence which has produced a factual finding by a coordinate bench. Precedent treatment: The Tribunal adhered to the established principle that a co-ordinate bench's factual findings, arrived at after appreciation of material on record, are not open to be revisited in review proceedings unless demonstrable error apparent on the face of the record is shown. Interpretation and reasoning: The impugned common order contained express factual findings - including a specific observation that an affidavit with call records indicated the affected person was placing orders - formed after consideration of multiple materials. The Tribunal held that such findings are results of evidentiary appreciation and do not constitute errors apparent on the face of the record that would justify review by a co-ordinate bench. Ratio vs. Obiter: Ratio - a finding of fact by a coordinate bench based on material on record cannot be reversed in review absent an error apparent on the face of the record. Conclusion: Review Application contesting the Tribunal's factual finding was dismissed as meritless; the Tribunal declined to re-open its fact-finding in review. Issue 2: Effect of an affidavit with call records that was not served on the affected party Legal framework: Principles governing review require an apparent error or new material that was unavailable and could not have been produced earlier; additionally, procedural fairness requires that material placed before the Tribunal should be available to the parties for response where appropriate. Precedent treatment: The Tribunal treated the affidavit and call records as part of the record relied upon in the impugned order, noting the findings were not solely dependent on that affidavit but on other materials as well. Interpretation and reasoning: While the applicant contended non-service of the affidavit rendered the Tribunal's finding unsustainable, the Tribunal observed its finding was made having regard to multiple preceding findings and materials (paras 18-21 of the impugned order) and not only upon the affidavit. Hence, lack of service of that affidavit did not constitute an error apparent on the face of the record sufficient for review. Ratio vs. Obiter: Ratio - absence of service of a post-decisional affidavit does not automatically afford ground for review where the Tribunal's finding rests on other materials and on cumulative appreciation of record. Conclusion: The contention that non-service of the affidavit vitiated the Tribunal's order was rejected; the review application based on that ground was dismissed. Issue 3: Whether the Tribunal failed to consider AO findings and whether that omission merits review Legal framework: Review is not available for re-arguing merits or to correct alleged omissions in the Tribunal's comprehensive consideration of the record unless the omission results in an error apparent on the face of the record. Precedent treatment: The Tribunal recognized that it had disposed of a batch of appeals together, which included appeals arising from both the AO's order and the WTM's order, and that its order was comprehensive addressing relevant facts. Interpretation and reasoning: The regulatory applicant argued that the Tribunal's order was 'overtly based' on WTM's findings and overlooked violations listed in the AO's order. The Tribunal held that both sets of orders emanated from the same factual matrix and that the contention of non-consideration was 'hyper technical.' The Court found no error apparent on the face of the record warranting review and noted that AO orders had in any event been set aside and remitted for fresh disposal. Ratio vs. Obiter: Ratio - a perceived failure to separately annotate every finding from multiple antecedent orders does not constitute a ground for review where the Tribunal has passed a comprehensive order addressing the relevant facts arising from the shared factual matrix. Conclusion: The review application seeking re-examination of alleged non-consideration of AO findings was dismissed as meritless. Issue 4: Scope and consequences of remittal of AO orders and the correctness of review by the Tribunal at the regulator's instance Legal framework: The Tribunal may remit matters to the AO for fresh disposal where necessary; review of such remedial directions requires demonstration of an error apparent on the face of the record or illegality in the exercise of jurisdiction. Precedent treatment: The Tribunal confirmed that it had set aside AO orders and remitted them for fresh disposal in light of its observations. The regulatory applicant's challenge to the remittal on the ground that AO's imposed penalties were not considered on merits was rejected. Interpretation and reasoning: The applicant's call to have the Tribunal re-evaluate AO findings on violations was characterized as an attempt to reopen merits rather than pointing out an apparent legal or factual error in the Tribunal's decision-making process. The Tribunal emphasized that setting aside and remittance for fresh disposal precluded the regulator's contention that the Tribunal had failed to vindicate AO findings on the merits. Ratio vs. Obiter: Ratio - remittal to the AO for fresh decision is a permissible remedial course and is not subject to review by a coordinate bench unless an error apparent on the face of the record is shown. Conclusion: The regulatory review application seeking substantive rehearing of violations held by the AO was dismissed; the remittal stands and no interference in review was warranted. Overall Conclusion The Tribunal dismissed both review applications: the individual's review seeking to undo the Tribunal's factual finding that he placed orders, and the regulator's review seeking re-examination of alleged omissions and AO-recorded violations. The Tribunal held that factual findings made after appreciation of material on record by a coordinate bench are not susceptible to review absent an error apparent on the face of the record, and that the common order disposing of multiple appeals was a comprehensive decision based on the shared factual matrix; consequently, no ground for review was established. Pending interlocutory applications were disposed of and no costs were awarded.