TaxTMI 
TaxTMI 
2013 (5) TMI 435
X X X X Extracts X X X X
X X X X Extracts X X X X
....shares. It is contended by the Appellants that both the schemes of buy-back and bonus shares did not materialize at all. In the process they suffered huge losses. Therefore, they are praying for a direction to SEBI to consider their prayer for grant of compensation for the loss suffered by them in the course of the transaction. They are seeking a direction to get compensation in respect of 1,71,773 shares in question @ Rs.30 per share at least. 2. The precise prayers of the Appellants are as under:- "(a) As the BSE has failed to save the investor from the fraudulent and unfair practice adopted by VCL for the promotion of sale of their shares duly listed at BSE for wrongful gain against the land laws of the country as well as SEBI and BSE, BSE and VCL may kindly be ordered to compensate the Complainant/Appellant up to the extent of(a) Rs.51,53,190/- in the name of Appellant No.1 for Rs.1,171,773/- shares @ Rs.30/- per share at least, who has invested her valuable money in the purchase of shares or in alternative Rs.51,53,190/- in the name of joint account holder Smt. Ram Kishore Gupta & H.C. Gupta, after deducting an amount of Rs.4,41,767/- the value o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hey made deceptive and alluring promises of buy-back of equity shares at a maximum price upto Rs.30 per share and also preferential allotment to promoters at a price upto Rs.35/- per share which was never done. They exhibited false allurement of issuing bonus shares in 8:10 proportion in order to attract and wrongfully induce the public including the consumer/investor, like Appellants, to invest in their goods/shares to which neither were they entitled in accordance with company law nor with SEBI law, resulting in heavy losses to the Appellants. 4. Subsequently, the Appellants approached the consumer forum under the Consumer Protection Act, 1986 for redressal of their grievances and payment of alleged compensation suffered by the Appellants due to the above facts. The National Consumer Disputes Redressal Commission, New Delhi, while hearing the appeal of the Appellants on 17/1/2010 simply opined that the complaint of the Appellants was not within the purview of Consumer Protection Act, and if the Appellants wished to pursue their remedy, they might approach SEBI for the redressal of their grievance as per law. Accordingly, they preferred a petition before SEBI dated 21/8/2010 wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... such matters of various investors who lose money in the process of trading in the shares, etc., it would be flooded with cases and may divert SEBI from its main objectives for which it was created. 7. Both the learned counsel have been heard at length and the pleadings and documents have been perused. 8. The Appellants have raised a twofold issue in the present appeal. Firstly, they seek a clear relief in the form of a direction to the BSE and VCL to compensate them for the alleged losses suffered on account of purchase/sale of 1,71,773 shares of the company in question. The claim is to the tune of Rs.51,53,190 in the form of damages for the alleged loss. Secondly, the Appellants have raised grievances regarding misleading advertisements by VCL in various newspapers which motivated the Appellants to purchase the shares of the company. Such allegations have also been made against the BSE. 9. First, we deal with the issue as to whether any compensation can be granted by SEBI to an investor who loses money in the process of sale and purchase of certain securities, etc. We have minutely perused the scheme of the SEBI Act, 1992 and we note that its express object is to protect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rtinent to note that SEBI itself has stated in its affidavit in reply dated 6th March, 2013 filed by Ms. Doel Saha, Assistant Legal Advisor that SEBI has already taken action against VCL and its directors under Section 11B and by an order dated 20th February, 2008, VCL was barred from accessing the securities market and from buying, selling or dealing in securities for a period of two years. However, this Tribunal by its Order dated 28th August, 2008 allowed the appeals preferred by VCL and remanded the matter to SEBI for fresh investigation. Further, a simple perusal of the objects mentioned in the preamble of the Act, read with the provisions of Section 11(1) of the SEBI Act, reveals beyond a doubt that a sort of development philosophy underlies the whole SEBI Act, 1992 and SEBI is required to operate keeping in view the spirit of the legislation as enacted by the Legislature. Consideration and imposition of one or more of the penalties prescribed under Section 15, including a direction to a company to refund an amount collected by the company in an irregular or illegal manner is entirely a different aspect and well within the domain of SEBI. 11. Learned counsel for BSE, Shri ....