TaxTMI 
TaxTMI 
2021 (9) TMI 1426
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....dated 17/11/2020 under Section 11(1), 11(4), 11B(1), 11B(2), and 11(4A) of the Securities and Exchange Board of India Act, 1992 and Section 12 A(1) and 12A (2) of the Securities Contracts (Regulation) Act, 1956 read with SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 and Securities Contracts (Regulation) Act, 1956 (Procedure for Holding Inquiry and Imposing Penalties) Rules, 2005 in the matter of Religare Enterprises Limited. 4. The learned counsel for the Petitioner submits that at the time of issuing Show Cause Notice dated 17/11/2020, the Respondent relied on several documents. He submits that event they obtained an internal Opinion before issuing the show cause notice. He submits that as per Rules 3 and 4 of the Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995, they have to follow the procedure before holding an inquiry on the basis of the show cause notice. Rules 3 and 4 of the Security and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 reads thus: "Appointment of adjudicating officer for holdi....
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....enforce the attendance of any person acquainted with the facts and circumstances of the case to give evidence or to produce any document which, in the opinion of the adjudicating officer, may be useful for or relevant to, the subject-matter of the inquiry. (7) If any person fails, neglects or refuses to appear as required by sub-rule (3) before the adjudicating officer, the adjudicating officer may proceed with the inquiry in the absence of such person after recording the reasons for doing so. 1. Substituted for "and 15H" by the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Amendment Rules, 2006, w.e.f. 14-11-2006. 2. Substituted for "and 15H" by the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Amendment Rules, 2006, w.e.f. 14-11-2006. 3. Inserted for "and 15H" by the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Amendment Rules, 2006, w.e.f. 14-11-2006. 5. The learned counsel for the Petitioner submits that from time to time the they called upon the Respondent to provide the documents relied by them in the show cause notice. He s....
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....he matter along with the main show cause notice. Hence, the Petitioner has filed the present writ petition. 7. The learned counsel for the Petitioner submits that as per the said Rule 1995, it is mandatory on the part of the Respondent to provide a copy of an Opinion formed by them to the other side before hearing the show cause notice. He further submits that at the time of issuing show cause notice whichever documents were relied by the Respondents, they have to provide the copies of the same to the Petitioner. He submits that without getting those documents it is impossible for the Petitioner to reply the show cause notice. In support of this contention, the learned counsel for the Petitioner relied on the Judgment of the Apex Court in the matter of Natwar Singh Vs. Director of Enforcement and Ors. reported in (2010) 13 SCC 255. Paragraph 31, 33 and 34 reads thus: "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 princip....
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....imum requirement of a show cause notice and consideration of cause shown would meet the ends of justice. A proper hearing always include, no doubt, a fair opportunity to those who are parties in the controversy for correcting or contradicting anything prejudicial to their view." He relied relied on the Judgment of the High Court in the matter of Shashank Vyankatesh Manohar Vs. Union of India and another. reported in (2014) Page 838. Paragraph 37 and 38 of the said Judgment read thus: "37. There is nothing on record to indicate that the adjudicating authority has considered the aforesaid aspects before forming the opinion to proceed further with the inquiry under sub-rule (4) of Rule 4 of the Adjudication Rules. 38. In view of the above discussion, though we do not disturb, at this stage, the impugned show cause notices dated 25 November 2011 issued by the Special Director, Directorate of Enforcement, to the Petitioner, we set aside the communication dated 6 June 2013 issued by respondent No.2, calling the petitioner for a personal hearing. We direct the Special Director, Directorate of Enforcement first to form his opinion, after recording reasons, whether to p....
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....Respondent submits that the petition as it is filed by the Petitioner is not maintainable. He submits that for the same relief the Petitioner already filed applications before the Deputy General Manager on 13/07/2021 (Exhibit-P and Exhibit-Q of the petition). He submits that in respect of that the petitioner time and again filed an application for adjournment. He submits that they have no objection if the Authority decides both applications filed by the Petitioner along with the main show cause notice. 9. The learned senior counsel for the Respondent submits that as per Rule 3 of the Security and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995, clearly shows that the Board has to form an Opinion to decide whether the show cause notice is required to be issued or not. Therefore, there is no question of providing the copies of the same. He further submit that necessary documents has already provided whichever are claimed by the Petitioner. He submits that they specifically informed the Petitioner by their letter dated 24/03/2021 (Exhibit-H, Page-171) that the documents mentioned at paragraph 3, 4 and 5 of e-mail da....
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.... 48. On a fair reading of the statute and the Rules suggests that there is no duty of disclosure of all the documents in possession of the Adjudicating Authority before forming an opinion that an inquiry is required to be held into the alleged contraventions by a noticee. Even the principles of natural justice and concept of fairness do not require the statute and the Rules to be so read. Any other interpretation may result in defeat of the very object of the Act. Concept of fairness is not a one way street. The principles of natural justice are not intended to operate as roadblocks to obstruct statutory inquiries. Duty of adequate disclosure is only an additional procedural safeguard in order to ensure the attainment of the fairness and it has its own limitations. The extent of its applicability depends upon the statutory framework." On the basis of these submissions, the learned senior counsel for the Respondent submits that there is no substance in the present writ petition and the same is required to be dismissed with costs. 11. We heard both sides at length. It is to be noted that, in the present proceedings, the Respondent issued Show Cause Notice dated 17/11/2020 to....