2020 (2) TMI 538

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.... No. 102 of 2019 is being taken into consideration. 2. The appellants have filed the present appeal against the order dated October 25, 2018 passed by the Adjudicating Officer ('AO' for short) of the Securities and Exchange Board of India ('SEBI' for short) under 15-I(2) of the Securities and Exchange Board of India Act, 1992 ('SEBI Act' for short) imposing a penalty for violation of Section 12(A)(a),(b) and (c) of the SEBI Act and Regulations 3(a),(b),(c),(d),4(1), 4(2)(a) and (g) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 ('PFUTP Regulations' for short). The AO found that the appellants had indulged extensively as a group executing match....

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....he learned counsel for the respondent. The learned counsel for the appellants submitted that the impugned order cannot be sustained as the principle of res judicata would squarely apply in the instant case. It was contended that when the first show cause notice dated April 20, 2012 was issued, the investigation of the present appeal for the period April 1, 2010 to January 10, 2011 had already been conducted and all information was with the respondent and therefore the first show cause notice dated April 20, 2012 should have included all the grounds and should not have issued a second show cause notice dated July 20, 2017. It was contended that the grounds for issuing the show cause notice is the same, namely, that the appellants have commit....

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.... an inordinate delay in the initiation of the proceedings. 7. It was further contended that the finding of the AO on the issue of self trades and match trades is patently erroneous and does not lead to a finding that the appellants were indulging in self trades and match trades in a manipulative manner which amounted to fraud and unfair trade practice. 8. On the other hand, the learned counsel for the respondent submitted that the principle of res judicata is not applicable nor the principle of estoppel would apply in the facts of the given case. It was contended that the first show cause notice dated April 20, 2012 was issued to such noticees who were different to the noticees issued in the second show cause notice dated July 20, 201....

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....notice dated July 20, 2017 for the investigated period April 1, 2010 to January 10, 2011 which had been investigated in September 2011. We find that the respondents were aware of the alleged violation and thus there is no justification for waiting for more than five years to issue the second show cause notice dated July 20 2017. In our view there is an inordinate delay in initiating the proceedings. 12. In Rakesh Kathotia v. SEBI in [Appeal No. 7 of 2016, dated 27-5-2019] by this Tribunal on it was held:- '23. It is no doubt true that no period of limitation is prescribed in the Act or the Regulations for issuance of a show cause notice or for completion of the adjudication proceedings. The Supreme Court in Government of Ind....