AI Drafter 
TaxTMI 
TaxTMI 
2020 (6) TMI 742
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....G. Nair, J. 1. The present appeal has been filed against an ex-parte order dated June 15, 2020 passed by the Whole Time Member ("WTM‟ for short) of Securities and Exchange Board of India ("SEBI‟ for short) directing the appellant to deposit a sum of Rs. 2,66,59,215/-plus interest till date totaling Rs. 3,83,16,230.73 in an Escrow Account towards notional loss allegedly avoided by him by using unpublished price sensitive information and further directed that the bank accounts / demat accounts of the appellant shall remain frozen till such time the amount is not deposited. The WTM further directed the appellant to show cause as to why an order of disgorgement should not be passed. 2. The facts leading to the filing of the pr....
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.... accounts of the appellant during these time was wholly arbitrary. It was further urged that an ex-parte order cannot be sustained in as much as the same is violative of the principles of natural justice. The appellant contended that the shares were sold on account of a loan agreement entered by the company with a consortium of banks and that appellant was required to reduce its pledge holdings for the purpose of disbursement of a loan of 3,69,00,00,000 (Rupees Three Hundred and Sixty Nine Crores Only). It was urged that had an opportunity of hearing been given these relevant facts could have been intimated which could have been considered by the respondent. It was also contended that the prices of the scrip went down not because of the dis....
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....from Section 11 and 11B of the SEBI Act. A plain reading of Section 11 and 11B shows that SEBI has to protect the interests of the investors in securities and to regulate the securities market by such measures as it thinks fit and such measures may be for any or all of the matters provided in sub-section 2 of Section 11 of the Act. SEBI has power to pass interim orders and such interim orders can also be passed exparte. Interim orders are passed in order to prevent further possible mischief of tampering with the securities market. If during a preliminary enquiry, it is found prima-facie, that the person is indulging in manipulation of the securities market, it would be obligatory for SEBI to pass an interim order or for that matter an ex- p....
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....] decided on May 1, 1984, the urgency must be infused by a host of circumstances, viz. large scale misuse and attempts to monopolise or corner the market. In the said decision, the Supreme Court further held that the regulatory agency must move quickly in order to curb further mischief and to take action immediately in order to instill and restore confidence in the capital market." 8. The aforesaid decision is fully applicable in the instant case and the reasoning given therein are not being repeated. In the instant case, we find that the trades were executed in October 2016. The investigation started in 2017 and continued till 2019 and, during this period, there was no shred of any evidence to suggest that the appellant was trying to di....
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....attachment before judgment. The said principles are fully applicable in the instant case. The object of attachment before judgment is to prevent any attempt on the part of the appellant to defeat the realization of the final order on disgorgement that may be passed against the appellant. But this principle applies only when it is found that the appellant is about to dispose of the property in question. Further, this principle can only be applied when there is evidence to show that the appellant has acted, or is about to act with the intent to obstruct or delay the adjudication of the proceedings that may be passed against him. We are of the opinion that there is no finding that the appellant will remove the property or will dispose of all t....