AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 1283
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....d. ('Oasis' for short) at the relevant time was a stock broker and a Company listed on the Bombay Stock Exchange Ltd. ('BSE' for short). Appellant No. 2 and 3 are the promoters of Appellant No. 1, Oasis and were also the Directors at the relevant time. In 2010 appellants entered into an agreement with a sister concern named Ikab Securities and Investment Ltd. ('IKAB' for short) to consolidate the stock broking and depository participants business and thereby transferred the said business of the appellants to IKAB as a going concern on a slump sale basis. The decision of the Board of Directors to sell its stock broking and depository participants business was taken in November 2008. The shareholders approval for the same was taken on December 20, 2008. During April and June 2010 Appellant No. 1, Oasis, took the approval of the National Stock Exchange of India Ltd. ('NSE' for short) and BSE for the sale / transfer of the broking and depository participants business. 3. On October 30, 2012 SEBI sought certain details from Appellant No. 1, Oasis. Based on further information collected by SEBI over a period of time a show cause notice dated January 1, 2018 was issued to the appellant....
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....mes. 6. Given that all relevant information was available to SEBI the show cause notice was issued with a delay of 8 to 10 years alleging disclosure violation. On this ground alone the impugned order should fail since SEBI issued a show cause notice only in 2018 with an inordinate delay on an issue which they were fully aware of atleast in the year 2010 if not earlier. The learned counsel also relied on the decision of this Tribunal in Ashok Shivlal Rupani & Ors. vs. SEBI (Appeal No. 417 of 2018 along with other connected appeals decided on August 22, 2019) which quashed the impugned orders therein purely on the basis of inordinate delay in issuing show cause notice and in passing the impugned orders therein. It was also submitted that an appeal filed by SEBI against the said order was dismissed by the Apex Court on November 15, 2019, copy of which was also produced on record. 7. Further, on merits the learned counsel for the appellant contended that all the material on record show that the proposed transfer, regulatory compliance, board approval and eventual transfer were available in public domain and hence all material information was disclosed as required under Clause 36 ....
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....of delay before the AO and hence cannot raise it at this stage of appeal. In any case the appellant was not inconvenienced or prejudiced in any manner by the alleged delay because the documents were all available with them. In support of his contention that since the appellant did not raise the issue of delay before the AO the same cannot be raised at the stage of appeal, learned senior counsel also relied on paragraph 35 of the Apex Court judgment in the matter of Adjudicating Officer, Securities and Exchange Board of India vs. Bhavesh Pabari (2019) 5 SCC 90. As regard the violations upheld in the impugned order, the learned senior counsel contended that the violations are supported by facts which are all on record. 12. Since the initial contention of the learned counsel for the appellants is on inordinate delay in issuing the show cause notice, we propose to deal with the same in the facts of this matter. From the records the following dates are noted since the chronology of events is important in deciding the factum of delay. * October 30, 2012 SEBI wrote to the Chairman, Audit Committee of the appellant company seeking number of information on the subject 'examination ....
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....2013 submitting presumably the relevant information. * September 6, 2013 Letter from AGM of SEBI to the Chairman of the appellant articulating the incompleteness of the information furnished and seeking the remaining information and details within 10 days. * September 17, 2013 E-mail from AGM of SEBI to the appellant explaining the differences between the information provided by the appellant and seeking the remaining information by October 5, 2013. * December 7, 2013 Reply from appellant, again giving part of the information stating that detailed information relating to two years (2008-09 and 2009-10) are not available in excel format etc. * April 3, 2014 Letter from SEBI seeking further clarifications and additional information and directing the appellant to provide the same within 15 days from the date of the receipt of this letter. * April 25, 2014 Appellant's letter furnishing purportedly the information sought. * May 19, 2014 E-mail from SEBI to appellant Anil Kumar Bagri seeking further clarifications on the information provided seeking the said clarifications within 7 days. * May 26, 2014 Reply from appellant stating that sinc....
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....held in the impugned order. Those were all material facts to be disclosed particularly given the fact that at the relevant time the broking and depository business of the appellant was the predominant business of the appellant. Only in its disclosure to BSE on July 14, 2010 appellant informed the name of the transferee entity and its affiliation to the appellant and even that disclosure was made after five weeks from the date of effecting the transfer on Jun 7, 2010. Therefore, given these undisputed facts we find no deficiency in the impugned order that the appellant did not make full disclosure of the transfer of its business to a group company as required under Clause 36 of the Listing Agreement. The reach of Clause 36 is clear from the provision itself which reads as follows :- "The Company will also immediately inform the Exchange of all the events, which will have bearing on the performance / operations of the company as well as price sensitive information". Given the wide nature of this clause, it is evident that complete details relating to sale / transfer of its broking and depository business had to be disclosed to the exchange immediately; which clearly was n....