TaxTMI 
TaxTMI 
2019 (12) TMI 1144
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....e Forward Contract (Regulation) Act, 1952 (hereinafter referred to as 'FCR Act') and registered with FMC under Section 14B of the FCR Act. Appellant no. 1 is the core promoter of NMCE and appellant no. 2 is the Managing Director and Chairman in Neptune Overseas Limited (appellant no. 1). Thus, appellant no. 2 was wearing two hats, one as a Managing Director and Chief Executive Officer of NMCE and the other as Managing Director and Chairman in Neptune Overseas Limited. Pursuant to the scheme of amalgamation, NMCE has merged with Indian Commodity Exchange Limited ('ICEL' for short) in 2018. 3. FMC is the regulatory authority set up by the Government of India in accordance with the provisions of Section 3(1) of the FCR Act to regulate the commodity futures markets. Section 3(2) of the FCR Act provides for constitution of the FMC. 4. A complaint dated November 28, 2010 relating to the trading irregularities and abuse of its position in the NMCE committed by appellant no. 1 and appellant no. 2 was received by the FMC, based on which an enquiry was initiated on December 14, 2010 which resulted in the inspection of the books of accounts. An enquiry into the affairs of NM....
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....ould issue a show cause notice to appellant no. 1 as well as to respondent no. 2 NMCE. Accordingly, the Gujarat High Court without going into the merits held that in the absence of show cause notice to appellant no. 1 or to respondent no. 2 the impugned order dated July 23, 2011 being contrary to the principles of natural justice could not be sustained and was quashed. The Division Bench also recorded that if any documents are in possession of the FMC and the same has not been supplied to the appellants the same would be supplied on payment of usual charges, if any. 7. The said order of the Division Bench of the Gujarat High Court was challenged by FMC before the Supreme Court of India by filing a Special Leave Petition. The Supreme Court while entertaining the SLP passed an interim order staying the effect and operation of the order of the Division Bench of the Gujarat High Court and further directed that the impugned order would stand revived and remain operative. Subsequently, the Supreme Court by an order dated March 7, 2018 quashed and set aside the orders of the Gujarat High Court and granted permission to the appellants to file a statutory appeal before the Securities Appel....
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....placed on a decision in Chandrama Tewari v. Union of India 1987 (supp) SCC 518 and Radhakrishnan Prabhkaran v. State of T.N. [2000] 9 SCC 170. 12. It was contended that the scheme of the Act made it apparently clear that the FMC had the jurisdiction and authority to issue the show cause notice and impose a penalty upon the appellants. In support of the submission, the respondent no. 1 relied upon a decision of the Supreme Court in First Commodities Exchange of India v. Union of India 2015 SC Exchange Online Ker 3808. 13. Learned counsel for the Respondent no. 2 submitted that pursuant to the directions issued by FMC in the impugned order dated July 23, 2011, respondent no. 2 NMCE has carried out and executed the said directions and thus contended that the appeal has become infructuous. 14. We are of the opinion that even if the directions have been carried out by respondent no. 2 the appellants have a legal right to question the veracity of the order on merits and contend that no such direction could have been issued. 15. On the issue of violation of natural justice, we find that admittedly appellant no. 1 and respondent no. 2 were not issued any show cause notice. This fact wa....
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....otice and on this ground also prayed for an adjournment. The request of the appellants to allow an advocate to address the question of jurisdiction was rejected and the matter was closed for orders. Thereafter the impugned order was passed on July 23, 2011 which according to the appellants was a Saturday when the FMC was closed. The respondents contend that the aforesaid sequence of events clearly indicates that sufficient time was granted to the appellants to place their view point which they failed and consequently there was no violation of the principles of natural justice. 18. Having heard the learned counsel for the parties on this issue we find that admittedly the show cause notice was issued on June 21, 2011 which was received by appellant no. 2 shortly thereafter. The documents in part were only supplied on July 5, 2011. Accordingly, the appellant no. 2 cannot be faulted for the adjournment made on July 4, 2011. According to the appellant voluminous documents running into thousands of pages were provided and many documents were not provided for which further request was made which was rejected by the respondent. Request for further time to place their written submissions w....