TaxTMI 
TaxTMI 
2020 (2) TMI 436
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.... Nair, These three appeals have been filed challenging the ex-parte ad interim order dated November 22, 2019 passed by the Whole Time Member ('WTM' for short) of the Securities and Exchange Board of India ('SEBI' for short) in the matter of M/s. Karvy Stock Broking Ltd. ('Karvy' for short). Since all these appeals challenge the same impugned order and the basic issues are common, by consent of the parties, all these appeals are heard together and disposed of by this common decision. 2. Appellants are banks who lent varying amounts of money to Karvy on the basis of pledged securities. The issues covered in these appeals are the same as in the matter of Bajaj Finance Ltd v. SEBI, [Appeal (L) No. 585 of 2019 dated on ....
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....ies as contained in direction no. (iv) quoted above should have waited for the completion of forensic audit and exact determination of rights of the parties. It was also argued that the second sentence in direction no. (iv) was only an advisory and not a direction and hence NSDL should not have transferred the securities back to the clients accounts. Therefore, transferring the securities, while a forensic audit is pending, and through an ex parte ad interim order is a clear over reach by the Respondents SEBI, NSDL and NSE and beyond the provisions of law. 4. We have heard the learned Senior Counsel and Counsel appearing for the three Appellants as well as for the four Respondents. The learned senior counsel and counsel appearing for the A....
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....ies could not have been alienated without full determination of facts and ownership rights through an ex parte ad interim order. It was also contended that the transfer of securities back to the clients has been done when the matter was pending before this Tribunal, pre-empting the Tribunal action. 5. Learned Senior Counsel representing Respondent No. 1, SEBI contended that the June 20, 2019 circular of SEBI clearly emphasized that the clients' securities could not be pledged by the brokers and an elaborate mechanism was provided for ring fencing the clients' securities and funds and these directions had to be implemented latest by August 31, 2019. Therefore, it was incumbent on the part of the Appellants/lenders to revisit their d....