TaxTMI 
TaxTMI 
TaxTMI 
2022 (1) TMI 1389
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....icer 1. The present appeal has been filed against the order dated June 26, 2020 passed by the Adjudicating Officer ("AO" for convenience) of the Securities and Exchange Board of India ("SEBI" for convenience) imposing a penalty of Rs. 10 lakhs for the purported violations mentioned in the show cause notice dated December 12, 2019. 2. The facts leading to the filing of the present appeal is, that the appellant is a registered broker with National Stock Exchange of India Limited ("NSE" for convenience) and Bombay Stock Exchange Limited ("BSE" for convenience). SEBI conducted an inspection of the books of accounts pertaining to stock broking during January / February 2012. An inspection report was served upon the appellant on May 07, 2012. A....
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....ering the matter rejected the contention of the appellant and imposed a penalty of Rs. 10 lakhs under Section 23H of Securities Contracts (Regulation) Act, 1956 ("SCRA" for convenience) and 15HB and 15C of the SEBI Act, 1992. 5. We have heard Shri Mohammed Ashraf, the learned counsel for the appellant and Shri Suraj Chaudhary, the learned counsel for the respondent. 6. Admittedly, the inspection was conducted in January / February 2012. Inspection was submitted on May 07, 2012 and a reply was given on June 14, 2012. Thereafter, nothing was done and the show cause notice was eventually issued on December 12, 2019 after 7 ½ years. There has been an inordinate delay in the issuance of the show cause notice. A specific plea has been ra....
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....ld not be raised. 9. In Ashlesh Gunvantbhai Shah vs. SEBI (Appeal No. 169 of 2019) decided on January 31, 2020. The relevant paragraphs are extracted herein below:- "12. Having considered the matter we are of the view that there has been an inordinate delay on the part of the respondent in initiating proceedings against the appellants for the alleged violations. The controversy in this regard is squarely covered by a decision of this Tribunal in Mr. Rakesh Kathotia & Ors. vs SEBI in Appeal No. 7 of 2016 decided by this Tribunal on May 27, 2019. The relevant paragraph is extracted herein below:- "23. It is no doubt true that no period of limitation is prescribed in the Act or the Regulations for issuance of a show cause notice or for co....
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....Appeal No. 102 of 2019 and other connected appeals decided on November 14 2019. 14. We also find that in the case of Ashok Shivlal Rupani (supra) the period of investigation was January 4, 2010 to January 10, 2011 in the scrip of M/s. Oregon Commercial Ltd. and the show cause notice issued on November 20, 2017 which this Tribunal held that there was an inordinate delay. In the instant case, the same scrip was investigated for the same period and there is a delay of 7 years in issuing the show cause notice. To this extent, the facts are common. Further, Civil Appeal No. 8444 - 8445 of 2019 Securities and Exchange Board of India vs. Ashok Shivlal Rupani & Anr, etc was dismissed by the Supreme Court on November 15, 2019 thus affirming the de....
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....aware of the alleged violation and thus there is no justification for waiting for more than five years to issue the second show cause notice dated July 20 2017. In our view there is an inordinate delay in initiating the proceedings." 11. In Ashok Shivlal Rupani vs. SEBI (Appeal No. 417 of 2018 decided on August 22, 2019). The relevant paragraphs are extracted herein below:- "6. Having considering the matter, we are of the view that there has been an inordinate delay on the part of the respondent in initiating proceedings against the appellants for alleged violations. Much water has flown since the alleged violations and at this belated stage the appellants cannot be penalized. It is alleged that disclosure under PIT Regulations was not m....