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2021 (2) TMI 1177

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....6, the provisions of the Securities and Exchange Board of India Act, 1992, and violates Article 14 and Article 19(1)(g) of the Constitution of India. 2. The petitioner states that they are a Public Limited Company registered with the Reserve Bank of India (RBI). The petitioner is a Non-Banking Finance Company (NBFC). The Company is holding a Certificate of Registration from the RBI as a NBFC under Section 45 of the Reserve Bank of India Act, 1934. The petitioner is subjected to stringent monitoring by its Auditors and RBI Inspectors. The petitioner has been regularly filing its compliances and returns with all the statutory authorities from time to time. 3. To augment its capital base and resources, the petitioner made private placement o....

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.... has held that in the absence of any period of limitation, the authority is required to exercise its powers within a reasonable period of time. The Apex Court has reiterated the said position in a number of subsequent judgments. 6. The belated initiation of investigation by the respondent is highly prejudicial to the petitioner. During the last 20 years, funds emanating from private placements have been utilised for business. The petitioner has been subjected to constant inspections by the RBI. The unreasonable delay in initiation of the investigation would be highly arbitrary, contended the learned Senior Counsel. 7. The learned Senior Counsel would further argue that the notice issued to the petitioner is vague. The respondent has not d....

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....he law laid down by the Apex Court in Joint Collector Ranga Reddy District and another v. D. Narsing Rao and others [(2015) 3 SCC 695], Palitana Sugar Mills (P) Ltd. and another v. State of Gujarat and others [(2004) 12 SCC 672] and State of Punjab and others v. Bhatinda District Co-operative Milk Producers Union Ltd. [(2007) 11 SCC 363] are flouted, contended the Senior Counsel appearing at the instance of the petitioner. 10. The learned Senior Counsel assisted by the Standing Counsel for the respondent, on the other hand, submitted that by Ext.P8 letter dated 19.10.2017, the petitioner was required to make available certain documents. The petitioner did not provide all the documents sought for. Therefore, Ext.P9 letter dated 07.11.2017 w....

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.... of the law laid down by the Apex Court in State of Bihar v. Deokaran Nenshi and another [(1972) 2 SCC 890] and Adjudicating Officer, Securities and Exchange Board of India v. Bhavesh Pabari [2019) 5 SCC 90]. The learned Senior Counsel emphatically denied the allegation that the SEBI has pre-judged the issue. Taking the court to the statements made in show-cause notices, the learned Senior Counsel pointed out that jurisdictional facts exist justifying initiation of the proceedings. The writ petition filed at show-cause stage is therefore without any merit and it is liable to be dismissed, contended the Senior Counsel. 14. I have heard the learned Senior Counsel appearing for the petitioner and the learned Senior Counsel assisted by Advocat....

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.... under Section 11(2)(f) of the SEBI Act, 1992, promoting investor education is one of the functions of the Board. In one of such meetings of investors, allegations were raised against the petitioner. The SEBI made their own enquiry and noted that the annual reports of the Company indicated authorising issue of shares to any person including existing members of the Company in any manner the Board may deem fit. The language of the resolutions indeed gives rise to a suspicion or indication that the Company proposed to issue shares to the public. It is for the said reason that the SEBI sought explanation from the petitioner. 18. The petitioner, instead of cooperating with the SEBI, providing requisite information, has approached this Court cha....