2020 (12) TMI 36

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....SEBI Act". The appeals arise out of the orders passed by the Securities Appellate Tribunal-"Tribunal" on 27 June 2020 and 23 July 2020. The Tribunal set aside an interim order dated 15 June 2020 passed by the Whole Time Member of SEBI under Section 19 read with Sections 11(1), 11(4)(d), 11(4A), 11(5) and 11B of the SEBI Act read with Regulation 10 of the SEBI (Prohibition of Insider Trading) Regulations 2015. 2 By the interim order, the Whole Time Member quantified an amount of Rs. 3,83,16,230.73, being the notional loss sought to be avoided on account of trades carried out by the respondent in the scrips of Dynamatic Technologies Ltd over unpublished price sensitive information. The respondent was directed by the Whole Time Member to cr....

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.... of a diversion of the notional gain made by the respondent. In arriving at its conclusion in the impugned order, the Tribunal placed reliance on its earlier decision in North End Foods Marketing Pvt Ltd v Securities and Exchange Board of India Appeal 80 of 2019 decided on 12 March 2019. In paragraph 11 of the decision, the Tribunal held as follows: "11. As held in North End Foods Marketing Pvt. Ltd. (supra) there is no real urgency in the matter to pass an ex-parte interim order especially during the pandemic period. There is no doubt that SEBI has the power to pass an interim order and that in extreme urgent cases SEBI can pass an ex-parte interim order but such powers can only be exercised sparingly and only in extreme urgent ma....

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....articular, the attention of the Court was drawn to the following paragraph: "9. ...We are of the opinion that no amount towards disgorgement can be directed to be deposited in advance unless it is adjudicated and quantified unless there is some evidence to show and justify the action taken. An order of the like nature can only be passed during the pendency of the proceedings and such orders cannot be passed at the time of initiation of the proceedings." 8 Section 11(4) of the SEBI Act confers power on SEBI in the following terms: "11. Functions of Board: *** *** *** (4) Without prejudice to the provisions contained in sub-sections (1), (2), (2A) and (3) and section 11B, the Board may, by an order, for reason....