TaxTMI 
TaxTMI 
2021 (9) TMI 1391
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....aran Dalal, AOR, Mr. Vikram Nankani, Sr. Adv., Mr. Kishore Kunal, AOR And Mr. Parth, Adv. ORDER Heard learned counsel for the parties. This appeal takes exception to the judgment and order dated 05.11.2019 passed by the Securities Appellate Tribunal, Mumbai in Appeal No. 124/2019, whereby the decision of the Securities and Exchange Board of India (SEBI) dated 28.02.2019 came to be set aside. The appeal was filed by the respondent questioning the direction issued by the SEBI restraining the respondent from accessing the securities market and further prohibiting him from buying, selling or otherwise dealing in securities, directly or indirectly for a period of two years from the date of the order. The SEBI in its order, while dealing wit....
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....stion as to why GDR proceeds should be kept as security for any loan when the same was being raised to meet the stated objectives of the Company and if it is to be kept as security, how would the GDR proceeds be used to meet the stated objectives of the issue. His subsequent resignation does not absolve him completely from his acts discharged during his tenure as a director of the Company, which cast a responsibility to act diligently, in the interest of Company and the shareholders. Needless to point out here that the phrase 'acting diligently' embodies in itself the duty not be careless and casual in approach while taking decisions. The Hon'ble Supreme court in Official Liquidator v. P.A. Tendolkar (1973) 1 SCC 602 has observed that "A ....
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....either the arrangement nor the resolution was ever disclosed to the shareholders of the Company or the investors of the securities market through BSE. This aspect has not been reckoned by the Appellate Tribunal. This is a manifest error committed by the Appellate Tribunal. In light of the above, we have no hesitation in taking the view that the Appellate Tribunal was unduly impressed by only one fact; but ought to have construed the resolution in the manner done by the SEBI and in particular, the inaction of the Board of not disclosing the arrangement to the shareholders or the investors of the securities market through BSE. As a result, we set aside the impugned judgment and order and instead uphold the view taken by the SEBI vide its de....