AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2022 (2) TMI 907
X X X X Extracts X X X X
X X X X Extracts X X X X
...... 16 C.2 Duty to Disclose Investigative Material ...................................................... 23 C.3. Exceptions to the Duty to Disclose ............................................................ 43 D. Conclusion ...................................................................................................... 47 A. Factual Background 1 By a judgment dated 29 September 2020, a Division Bench of the Bombay High Court dismissed the petition instituted by the appellant under Article 226 of the Constitution for challenging a show cause notice which was issued by the first respondent "SEBI" or the "Board" alleging a violation of the provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations 2003 "PFUTP Regulations". A petition seeking a review of the judgment of the Division Bench was disposed of by an order dated 22 October 2020. The appellant moved a Special Leave Petition against the judgment in the writ petition and the order in review. The principal issue is whether an investigation report under Regulation 9 of the PFUTP Regulations must be disclosed to the person to whom a notice to show cause is issued. 2 The appel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icting the investigation period mandated to PwC, the Company intended to restrain PwC from examining the transactions of the previous years and thereby ring-fence the earlier MD & CEO, T. Takano." 4 Based on the investigation, it was noted that the financial misstatements commenced from 2012-13 and the Company suffered a loss due to, inter alia, transfers to third parties, write-offs and a sale made to Fourth Dimension Solutions Limited "FDSL" without inventory. It was further noted that the share price of the Company had gone up due to the misstatements. Hence, it was observed that the appellant, along with five others, has prima facie violated the provisions of Section 12A(a), 12(A)(b) and 12A(c) of the Securities and Exchange Board of India Act 1992 "SEBI Act" read with Regulations 3(b), 3(c), 3(d), 4(1), 4(2)(e), 4(2)(k) and 4(2)(r) of the PFUTP Regulations. Hence, the first respondent issued the following directions under Sections 11(1), 11(4) and 11B of the SEBI Act and Regulation 11 of the PFUTP Regulations: (i) The appellant and the other five key managerial persons were restrained from accessing the securities market or buying, selling or otherwise dealing in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsic auditors was submitted on 25 October 2019. 7 The appellant challenged the confirmatory order before the Securities Appellate Tribunal "Tribunal", Mumbai. The appeals were allowed and the order against the appellant was quashed on 29 January 2020 on the grounds that: (i) The confirmatory order is based on a suspicion about the role of the appellant; (ii) The submissions of the appellant were not dealt with appropriately; (iii) Since the company is in liquidation, the appellant is not in a position to influence decisions; and (iv) The appellant cannot be prevented from dealing in the securities market when the appellant is held to be vicariously liable due to the position he held as MD/CEO. The tribunal, however, directed that the first respondent is at liberty to issue a fresh show cause notice if the evidence against the appellant is made available through the forensic report or through the first respondent's investigation. 8 A fresh show cause notice was issued to the appellant on 19 March 2020 under the provisions of Sections 11(1), 11(4), 11(4A), 11B(1) and 11B(2) and 15HA of the SEBI Act and Section 12A(2) read with Section 23H ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t petition before the Bombay High Court challenging the show cause notice which was issued on 19 March 2020. In the alternative, inspection of all documents relied on to issue the show cause notice was sought. The appellant submitted before the High Court that to non-disclosure of all relevant documents relied on to issue the show cause notice violated the principles of natural justice. 12 By its judgment dated 29 September 2020, the High Court held that the investigation report prepared under Regulation 9 of PFUTP Regulations is solely for internal purposes. In concluding that the investigation report need not be furnished while issuing a show cause notice, the High Court has relied on the decision of this Court in Natwar Singh v. Director of Enforcement (2010) 13 SCC 255. In sum and substance, the High court has held that the report does not form the basis of the show cause notice and therefore need not be disclosed. The review petition challenging the judgment of the Division Bench of the High Court was rejected. B. Submissions of Counsel 13 Mr Ashim Sood, learned Counsel appearing for the appellant made the following submissions: (i) Regulation 10 has two sync....
X X X X Extracts X X X X
X X X X Extracts X X X X
....person to whose prejudice such material may be used for taking adverse action; (vii) In Khudiram Das v. State of West Bengal (1975) 2 SCC 81, this Court held that once a statute prescribes reliance on certain material, such material should be disclosed to the opposite party. This principle has been followed in multiple contexts, including proceedings under the Companies Act 1956 and Special Courts Act 1979; (viii) If the entire investigation report is not provided, it would be difficult to come up with a metric for determining which parts of the report are relevant to the noticee; (ix) Permitting the respondent to selectively disclose portions of the investigation report carries with it the risk of conferring unfettered discretion upon the first respondent. The first respondent will attempt to disclose the least possible information in an adversarial proceeding, undermining the mandate of Regulation 10; (x) Without having access to the entirety of the investigation report, the noticee will be incapable of effectively challenging the decision of the first respondent. It will result in the adoption of an opaque process where SAT or the High Courts ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....otice. Together with the show cause notice all the documents that have been relied upon by the investigator are provided to the noticee. In the present, case all the relevant documents have been provided to the noticee, including the report of Pipara and Co. which formed the basis of the show cause notice. The appellant is not entitled to any other documents; (iii) The quasi-judicial proceedings that are initiated by SEBI proceed on the basis of the allegations that are mentioned in the show cause notice and the documents that are annexed to it. No other material, document or investigation is considered for adjudication by the competent authority. Orders are passed only after an opportunity to file a reply is given and a personal hearing is provided to comply with the principles of natural justice; (iv) Regulation 9 of PFUTP Regulations requires the Investigating Authority to submit the report, after completion of the investigation, to the appointing authority. However, the provision does not require the furnishing of the report to the noticee. The report is only in the nature of an inter-departmental communication between officers investigating the matter and the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....notified by SEBI in exercise of powers conferred by Section 30 of the SEBI Act. Regulation 2(c) defines the expression 'fraud' in the following terms: "2(c) "fraud" includes any act, expression, omission or concealment committed whether in a deceitful manner or not by a person or by any other person with his connivance or by his agent while dealing in securities in order to induce another person or his agent to deal in securities, whether or not there is any wrongful gain or avoidance of any loss, and shall also include- (1) a knowing misrepresentation of the truth or concealment of material fact in order that another person may act to his detriment; (2) a suggestion as to a fact which is not true by one who does not believe it to be true; (3) an active concealment of a fact by a person having knowledge or belief of the fact; (4) a promise made without any intention of performing it; (5) a representation made in a reckless and careless manner whether it be true or false; (6) any such act or omission as any other law specifically declares to be fraudulent, (7) deceptive behaviour by a person depriving another of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....call for information or records from any person specified in section 11(2)(i) of the Act; (2) to undertake inspection of any book, or register, or other document or record of any listed public company or a public company (not being intermediaries referred to in section 12 of the Act) which intends to get its securities listed on any recognized stock exchange where the Investigating Authority has reasonable grounds to believe that such company has been conducting in violation of these regulations; (3) to require any intermediary or any person associated with securities market in any manner to furnish such information to, or produce such books, or registers, or other documents, or record before him or any person authorized by him in this behalf as he may consider necessary if the furnishing of such information or the production of such books, or registers, or other documents, or record is relevant or necessary for the purposes of the investigation; (4) to keep in his custody any books, registers, other documents and record produced under this regulation for a maximum period of one month which may be extended upto a period of six months by the Board : Provided that the Inv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ments and record, if in the course of investigation, the Investigating Authority has reasonable ground to believe that such books, registers, other documents and record of, or relating to, any intermediary or any person associated with securities market in any manner may be destroyed, mutilated, altered, falsified or secreted; (c) to keep in his custody the books, registers, other documents and record seized under these regulations for such period not later than the conclusion of the investigation as he considers necessary and thereafter to return the same to the person, the company or the other body corporate, or, as the case may be, to the managing director or the manager or any other person from whose custody or power they were seized : Provided that the Investigating Authority may, before returning such books, registers, other documents and record as aforesaid, place identification marks on them or any part thereof; (d) save as otherwise provided in this regulation, every search or seizure made under this regulation shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) relating to searches or seizures made under that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....8 Regulation 9 upon which the controversy in the present case turns is extracted below: "9. The Investigating Authority shall, on completion of investigation, after taking into account all relevant facts, submit a report to the appointing authority: Provided that the Investigating Authority may submit an interim report pending completion of investigations if he considers necessary in the interest of investors and the securities market or as directed by the appointing authority." Regulation 9 envisages that the investigating authority must submit a report to the appointing authority upon the completion of its investigation in the course of which all relevant facts have to be taken into account. The investigating authority may even submit an interim report, if necessary, in the interest of investors and the securities market or, if directed by the appointing authority. 19 Regulation 10 deals with the Board's power of enforcement. According to Regulation 10: "10. The Board may, after consideration of the report referred to in regulation 9, if satisfied that there is a violation of these regulations and after giving a reasonable opportunity of hea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n contravention of these regulations, in such manner as the Board may deem fit, for restoring the status quo ante. (2) The Board shall issue a press release in respect of any final order passed under sub-regulation (1) in at least two newspapers of which one shall have nationwide circulation and shall also put the order on the website of the Board. 12. (1) The Board may, without prejudice to the provisions contained in subsections (1), (2), (2A) and (3) of section 11 and section 11B of the Act, by an order, for reasons to be recorded in writing, in the interests of investors and securities market take the following action against an intermediary : (a) issue a warning or censure (b) suspend the registration of the intermediary; or (c) cancel of the registration of the intermediary Provided that no final order of suspension or cancellation of an intermediary for violation of these regulations shall be passed unless the procedure specified in the regulations applicable to such intermediary under the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 is co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rrounding the principles of access to justice and transparency, range from identifying the purpose and extent of disclosure required, to balancing the conflicting claims of access to justice and grounds of public interest such as privacy, confidentiality and market interest. An identification of the purpose of disclosure would lead us closer identifying the extent of required disclosure. There are three key purposes that disclosure of information serves: (i) Reliability: The possession of information by both the parties can aid the courts in determining the truth of the contentions. The role of the court is not restricted to interpreting the provisions of law but also determining the veracity and truth of the allegations made before it. The court would be able to perform this function accurately only if both parties have access to information and possess the opportunity to address arguments and counter-arguments related to the information; (ii) Fair Trial: Since a verdict of the Court has far reaching repercussions on the life and liberty of an individual, it is only fair that there is a legitimate expectation that the parties are provided all the aid in order for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of the regulations, the principles of natural justice require due disclosure of the report. 25 The consequence of the Board arriving at a satisfaction that there has been a violation of the regulations is that the Board can take recourse to the actions specified under Regulations 11 and 12. Regulation 11 empowers the Board to: (i) Suspend the trading of the security found to be involved in a fraudulent and unfair trade practice in a recognized stock exchange; (ii) Restraining persons from accessing the securities market and prohibiting any person associated with it from dealing in securities; (iii) Suspending an office bearer of a recognized stock exchange; (iv) Impounding and retaining the proceeds or securities; (v) Issuing a direction not to dispose of or alienate an asset forming part of a fraudulent and unfair transaction; (vi) Prohibit the disposal of any of the securities acquired in contravention of these regulations; and (vii) Directing the disposal of any securities in accordance with the mandate of the Board. Under Regulation 11(2), a press release has to be issued by the Board in respect of a final....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nion that an inquiry should be held, he shall issue a notice fixing a date for the appearance of that person either personally or through his legal practitioner or a chartered accountant duly authorised by him." Rule 4(1) of the FEMA Rules 2000 indicates that in the first instance, the adjudicating authority has to issue a notice requiring the person to show cause why an enquiry should not be held against him. The stage of the notice under Rule 4(1) is not for adjudication but is for the purpose of deciding whether an enquiry should be held. If after considering the cause which is shown, the adjudicating authority is of the opinion that an enquiry should be held, thereupon under Rule 4(3), a notice is issued for the appearance of the person. Sub-Rule (4) provides that on the date fixed, the adjudicating authority shall explain the contravention alleged to have been committed and under sub-Rule (5) an opportunity of producing documents or evidence has to be given. Under sub-Rule (8), the adjudicating authority is empowered to impose a penalty if it is satisfied, upon considering the evidence produced that there has been a contravention. 29 Now in this backdrop, Justice B. Suda....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nfairness irrespective of whether the material in question arose before, during or after the hearing. The law is fairly well settled if prejudicial allegations are to be made against a person, he must be given particulars of that before hearing so that he can prepare his defence. However, there are various exceptions to this general rule where disclosure of evidential material might inflict serious harm on the person directly concerned or other persons or where disclosure would be breach of confidence or might be injurious to the public interest because it would involve the revelation of official secrets, inhibit frankness of comment and the detection of crime, might make it impossible to obtain certain clauses of essential information at all in the future (see R. v. Secy. of State for Home Deptt., ex p H [1995 QB 43 : (1994) 3 WLR 1110 : (1995) 1 All ER 479 (CA)] ). 31. The concept of fairness may require the adjudicating authority to furnish copies of those documents upon which reliance has been placed by him to issue show-cause notice requiring the noticee to explain as to why an inquiry under Section 16 of the Act should not be initiated. To this extent, the principles....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pon which the adjudicating authority may place reliance, undoubtedly, is required to be furnished to the person proceeded against at the second stage of inquiry into allegations of contravention. It is at that stage, the adjudicating authority is not only required to give an opportunity to such person to produce such documents as evidence as he may consider relevant to the inquiry, but also enforce attendance of any person acquainted with the facts of the case to give evidence or to produce any document which in its opinion may be useful for or relevant to the subject-matter of the inquiry. It is no doubt true that natural justice often requires the disclosure of the reports and evidence in the possession of the deciding authority and such reports and evidence relevant to the subject-matter of the inquiry may have to be furnished unless the scheme of the Act specifically prohibits such disclosure." (emphasis supplied) This Court further noted that the documents which the appellant wanted were documents upon which no reliance was placed by the authority for setting the law into motion. Consequently, this Court concluded that: "48. On a fair reading of the statute and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ance was placed on the judgment of this Court in Krishna Chandra Tandon (supra) to buttress the submission. However, it is clear from the judgment that even if the documents are merely inter-departmental communications, there is a duty to disclose such documents if they have been relied upon by the enquiry officer. A two-Judge Bench of this observed: "16. Mr Hardy next contended that the appellant had really no reasonable opportunity to defend himself and in this connection he invited our attention to some of the points connected with the enquiry with which we have now to deal. It was first contended that inspection of relevant records and copies of documents were not granted to him. The High Court has dealt with the matter and found that there was no substance in the complaint. All that Mr Hardy was able to point out to us was that the reports received by the CIT from his departmental subordinates before the charge-sheet was served on the appellant had not been made available to the appellant. It appears that on complaints being received about his work the CIT had asked the Inspecting Assistant Commissioner Shri R.N. Srivastava to make a report. He made a report. It is ob....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... not take such material into account and excluded it from consideration. It is elementary that the human mind does not function in compartments. When it receives impressions from different sources, it is the totality of the impressions which goes into the making of the decision and it is not possible to analyse and dissect the impressions and predicate which impressions went into the making of the decision and which did not. Nor is it an easy exercise to erase the impression created by particular circumstances so as to exclude the influence of such impression in the decision making process. Therefore, in a case where the material before the District Magistrate is of a character which would in all reasonable probability be likely to influence the decision of any reasonable human being, the Court would be most reluctant to accept the ipse dixit of the District Magistrate that he was not so influenced and a fortiori, if such material is not disclosed to the detenu, the order of detention would be vitiated, both on the ground that all the basic facts and materials which influenced the subjective satisfaction of the District Magistrate were not communicated to the detenu as also on the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gs of the enquiry officer do constitute an important material before the disciplinary authority which is likely to influence its conclusions. If the enquiry officer were only to record the evidence and forward the same to the disciplinary authority, that would not constitute any additional material before the disciplinary authority of which the delinquent employee has no knowledge. However, when the enquiry officer goes further and records his findings, as stated above, which may or may not be based on the evidence on record or are contrary to the same or in ignorance of it, such findings are an additional material unknown to the employee but are taken into consideration by the disciplinary authority while arriving at its conclusions. Both the dictates of the reasonable opportunity as well as the principles of natural justice, therefore, require that before the disciplinary authority comes to its own conclusions, the delinquent employee should have an opportunity to reply to the enquiry officer's findings. The disciplinary authority is then required to consider the evidence, the report of the enquiry officer and the representation of the employee against it." (emphasis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly of the report. If after hearing the parties, the Court/Tribunal comes to the conclusion that the non-supply of the report would have made no difference to the ultimate findings and the punishment given, the Court/Tribunal should not interfere with the order of punishment. The Court/Tribunal should not mechanically set aside the order of punishment on the ground that the report was not furnished as is regrettably being done at present. (emphasis supplied) 36 In State Bank of Patiala v. SK Sharma (1996) 3 SCC 364, this Court noted that if a facet of a rule of natural justice is violated on grounds of preserving public interest, the entire proceeding is not vitiated unless prejudice has been caused to the delinquent. A distinction was made between the complete non-abidance of the principles of natural justice, that is where no information was disclosed and arguments of insufficient disclosure. It was held that when the latter argument is made, the Court must determine if the insufficient disclosure caused prejudice. This Court observed: "28. The decisions cited above make one thing clear, viz., principles of natural justice cannot be reduced to any hard and fas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f natural justice, audi alteram partem, as such and violation of a facet of the said principle. In other words, distinction is between "no notice"/"no hearing" and "no adequate hearing" or to put it in different words, "no opportunity" and "no adequate opportunity". To illustrate - take a case where the person is dismissed from service without hearing him altogether (as in Ridge v. Baldwin [1964 AC 40 : (1963) 2 All ER 66 : (1963) 2 WLR 935] ). It would be a case falling under the first category and the order of dismissal would be invalid - or void, if one chooses to use that expression (Calvin v. Carr [1980 AC 574 : (1979) 2 All ER 440 : (1979) 2 WLR 755, PC] ). But where the person is dismissed from service, say, without supplying him a copy of the enquiry officer's report (Managing Director, ECIL v. B. Karunakar [(1993) 4 SCC 727 : 1993 SCC (L&S) 1184 : (1993) 25 ATC 704] ) or without affording him a due opportunity of cross-examining a witness (K.L. Tripathi [(1984) 1 SCC 43 : 1984 SCC (L&S) 62] ) it would be a case falling in the latter category - violation of a facet of the said rule of natural justice - in which case, the validity of the order has to be tested on the tou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d upon or it may not be necessary for cross-examination of any witness, non-supply of such a document will not cause any prejudice to the delinquent. The inquiry would not be vitiated in such circumstances. In State of T.N. v. Thiru K.V. Perumal [(1996) 5 SCC 474 : 1996 SCC (L&S) 1280] relied upon by the appellant, it is held that it is for the delinquent to show the relevance of a document a copy of which he insists to be supplied to him. Prejudice caused by non-supply of document has also to be seen. In yet another case relied upon by the learned counsel for the appellant, reported in State of U.P. v. Harendra Arora [(2001) 6 SCC 392 : 2001 SCC (L&S) 959] it has been held that a delinquent must show the prejudice caused to him by non-supply of a copy of the document where order of punishment is challenged on that ground." (emphasis supplied) 38 In Kothari Filaments v. Commr. Of Customs (2009) 2 SCC 192, this Court held that the Commissioner of Customs in the exercise of its quasi-judicial powers cannot pass an order on the basis of material which is only known to the authorities. This Court held: "14. The statutory authorities under the Act exercise quasi-jud....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Court that it did not rely on the investigation report. The ipse dixit of the authority that it was not influenced by certain material would not suffice. If the material is relevant to and has a nexus to the stage at which satisfaction is reached by an authority, such material would be deemed to be important for the purpose of adjudication. The written submissions of the Board clearly state that the findings of the investigation report are important for the authority to decide whether there are any prima facie grounds to initiate enforcement proceedings under Regulation 10. The relevant extract of the submissions is reproduced below: "It is submitted that Regulation 9 of PFUTP Regulations require the Investigating Authority to submit the report after completion of the investigation to the appointing authority. However, the provision does not require furnishing of the report to the Noticee. Further, the investigation report is merely a culmination of documents which the investigating authority relies on/come across while conducting the investigation and is not a piece of evidence in itself. It is a report which is necessary for an authority, who orders an investigation, to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e proceeding. While determining the reliability of the verdict and punishment, the court must also look into the possible uses of the undisclosed information for purposes ancillary to the outcome, but that which might have impacted the verdict. 43 In Natwar Singh (supra), it was held that material which is relevant to the subject-matter of the proceedings must be disclosed, unless the scheme of the statute indicates to the contrary. The non-disclosure of such material is prima facie arbitrary. A deviation from this general rule was made based on the stage of the proceedings. It was held that it is sufficient to disclose the materials relied on if it is for the purpose of issuing a show cause notice for initiating inquiry. However, in the present case, since the report of the investigating authority under Regulation 9 enters into the calculus of circumstances borne in mind by the Board in arriving at its satisfaction under Regulation 10 for taking actions as specified in Regulations 11 and 12, it would be contrary to the Regulations to assert that the investigation report is merely an internal document of which a disclosure is not warranted. In any event, the language of Regulati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e bearing upon the orderly functioning of the securities market. The right of the noticee to disclosure must be balanced with a need to preserve any other third-party rights that may be affected. 46 In Natwar Singh (supra), this Court has observed that there are exceptions to the general rule of disclosing evidentiary material. This Court held that such exceptions can be invoked if the disclosure of material causes harm to others, is injurious to public health or breaches confidentiality. While identifying the purpose of disclosure, we have held that one of the crucial objectives of the right to disclosure is securing the transparency of institutions. The claims of third party rights vis-à-vis the right to disclosure cannot be pitted as an issue of public interest and fair adjudication. The creation of such a binary reduces and limits the purpose that disclosure of information serves. The respondent should prima facie establish that the disclosure of the report would affect third party rights. The onus then shifts to the appellant to prove that the information is necessary to defend his case appropriately. 47 Applying this test to the facts, we find that the appellant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....w cause notice has specifically referred to what was revealed during the course of the investigation and has invoked the provisions of the PFUTP Regulations in the allegations against the appellant. Para 8 (2) of the show cause notice is extracted below: "(II) It is alleged that Mr. T. Takano, during whose tenure the business transactions with FDSL started by virtue of his position as MD & CEO of Ricoh during FY 2012-13 to FY 2014-15, was actively involved in committing the fraud and had knowingly restricted the mandate given to PwC to six month so as to succeed in hiding his role in the commission of fraud of publishing untrue financial statement of Ricoh which resulted in misleading the investors about the financial performance of the company and thereby resulted in inducement of traders in the scrip. The said acts of the Noticee no. 2 are alleged to be violation of regulations 3 (b), (c), (d), 4(1) and 4(2)(e), (f), (k) and (r) of SEBI (PFUTP) Regulations, 2003 and clause 49 (V) read with 41 (II)(a) of the erstwhile Listing Agreement." Since the show cause notice has specifically relied upon the report of the investigation and invokes, inter alia, a violation of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dent should prima facie establish that the disclosure of the report would affect third-party rights and the stability and orderly functioning of the securities market. The onus then shifts to the appellant to prove that the information is necessary to defend his case appropriately; and (vi) Where some portions of the enquiry report involve information on third-parties or confidential information on the securities market, the respondent cannot for that reason assert a privilege against disclosing any part of the report. The respondents can withhold disclosure of those sections of the report which deal with third-party personal information and strategic information bearing upon the stable and orderly functioning of the securities market. 52 The Board shall be duty-bound to provide copies of such parts of the report which concern the specific allegations which have been levelled against the appellant in the notice to show cause. However, this does not entitle the appellant to receive sensitive information regarding third parties and unrelated transactions that may form part of the investigation report. 53 During the course of the hearing, the Court has been apprised of ....