TaxTMI 
TaxTMI 
2013 (9) TMI 1312
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...., BSE Limited and National Stock Exchange of India Ltd. 3. During the early part of the year 2000 the Company was negotiating to acquire a US based Company named 'Data Inc'. The negotiations resulted in a Memorandum of Understanding (MOU) on 1/4/2000 signed between the Company, represented by the Petitioner and Data Inc., represented by its President Mr. Arun Verma. 4. In accordance with the terms of the 'Memorandum of Understanding', the Company engaged an external consultant and a firm of certified Public Accountants to conduct due diligence on Data Inc including on matters pertaining to tax and accounts. The Company received the report from the firm of certified Public Accountants on 17/7/2000 and due diligence report from the External Consultant on 17/8/2000. 5. The Audit Committee of the Board of Directors of the Company met on 30/9/2000 and reviewed the proposal for acquisition. Based on the diligence report and the report of the Certified Public Accountant, the Audit Committee was of the strong view that the acquisition of Data Inc was not at all in the interest of the shareholders of the Company. The Audit Committee felt that 'Memorandum of Unde....
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....also was aware if the information about the failure of the proposed acquisition of Data Inc was made public, it would have an adverse impact on the marked price of the scrip. (iv) The Petitioner as the Chairman and Managing Director and Chairman of PSLL had dealt in the shares of PSLL on the basis of this unpublished price sensitive information, during this period on behalf of PHPL; (v) The petitioner had engaged in insider trading with the intention of gaining unfair advantage for which he is liable to appropriate action under the SEBI Act." 9. The Petitioner challenged the Adjudication Show Cause Notice and the order of the Respondent appointing an Adjudicating Officer by way of filing a Writ Petition before this Court in W. P.Wos. 40158 and 40261 of 2005 and sought quashing of the Adjudication Show Cause Notice on numerous grounds. This Court, by means of an interim order restrained the Respondent from proceeding with the Adjudication Show Cause Notice. 10. The Respondent preferred a Writ Appeal No. 241 of 2007 as against the interim order granted by this Court in the Writ Petition and during the pendency of the Writ Appeal and Writ Petitions on 20/4/2007....
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...."HPAC") has recommended that the case might be settled on payment of Rs.7,00,000/- towards settlement and legal expenses in the matter. In view of the recommendation of the HPAC, SEBI has in principle agreed to accept the terms of the revised consent terms proposed by the. Writ Petitioner, subject to certain change in the undertaking and waiver. The said amount was also paid by the Petitioner on 24/3/2008, therefore, there remains nothing, to be adjudicated either in the Writ Appeal or in the Writ Petition as the matter has already reached finality. The Learned Counsel for the Writ Petitioner has also produced before this Hon'ble Court a photostat copy of the order dated 17/3/2008 made by the Securities and Exchange Board of India." 15. Accordingly, the Adjudicating Officer, on 21/7/2008, passed the Consent Order which among other things mentioned as follows:- "6. In view of the above, it is hereby ordered that, (i) This consent order disposes of the said proceedings pending against the Notice under the Securities Exchange Board of India Act, 1992 in the matter of Polaris Software Lab Ltd., and (ii) Passing of this order is without prejudice to the....
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....pondent (SEBI) is a statutory authority constituted by the Securities and Exchange Board of India Act, 1992 with a mandate to protect the interest of investors in securities and to promote the development of and to regulate the securities market. The Petitioner's Company shares are listed at Madras Stock Exchange, Bombay Stock Exchange and National Stock Exchange. The Petitioner's Company informed the Exchange that the Company had signed the "Memorandum of Understanding" dated 22/5/2000 with New Jersey based Data Inc for a strategic acquisition, which was expected to further strengthen the focus on providing software solutions to the Adjudicating financial services and insurance segments. In pursuance to the said Memorandum of Understanding, KPMG, was assigned the work of doing the due diligence and the matters pertaining to tax and accounts of Data Inc., were assigned to Pandya Kapadia & Associates, CPA. The report from KPMG was received on 7/8/2000 and the report from Pandya Kapadia was received on 17/8/2000. 20. That apart, starting from the receipt of due diligence of the professional experts till the formal announcement of calling of the deal on 30/9/2000, the seque....
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.... The Polaris Holdings Private Limited sold 15080 shares of the Company during the relevant period, sending these to the company after getting them "completed this week." 22. On 5/9/2000, another e-mail was sent by the Company to Mr. Arun Verma mentioning inter alia that as per SEBI Rules, the entire transaction/acquisition must have been completed within 90 days i.e., by August 23, 2000 which had already lapsed. This means that as per current RBI Rules, the Company will not be entitled to pursue the "Fast Track" route for acquisition, instead will have to cross many obstacles and obtain several clearances from RBI, FIPB and other appropriate authorities. The main cause of delay should be attributed to the discovery of the fact that Data IncTs accounts were only compiled and not audited as stated in the MOU. Under these circumstances, it was felt that it would be prudent for both the company and Data Inc., to revisit the proposal afresh separately at an appropriate time in future. 23. On 6/9/2000, Arun Verma replied to the Company conveying his "uneasy feeling" at the e-mail dated 5/9/2000. He expressed his strong disagreement with the representation that "the main cause of de....
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....Securities Market) Regulations 1995. The Petitioner's statement in the said investigation was recorded as per section 11C(5) of the SEBI Act, 1992. The said investigation would point out that the Petitioner had violated the provisions of the said Regulations. Pursuant to the findings, the Respondent appointed an Adjudicating Officer to enquire into the violations of the said Regulations on the part of the Petitioner as per order dated 5/9/2005 under Section 15-I of the SEBI Act, 1992 read with Section 19 of the SEIBI Act and Rule 3 of the SEBI (Procedure for Holding Enquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995. The Adjudicating Officer also issued the show cause notice dated 30/9/2005. 26. The Respondent, on 20/4/2007, issued guidelines for Consent Orders. Based on the above guidelines, the Petitioner projected necessary application for passing of Consent Orders as regards the said adjudication proceedings. The said Consent Order was approved by this Court as per Order dated 11/6/2008 which recorded the Consent Order and disposed of the pending writ Petitions. 27. Coming to the plea of the Petitioner that the facts and cause of action mentioned in t....
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.... punished twice under two different enactments. The Courts have held that adjudication proceedings under SEBI Act are civil proceedings. 31. The Respondent through its order dated 19/10/2012 held with the trades of PHPL done instructions of the Petitioner that he was in position of the unpublished price sensitive, information. The above Company was modified by the information that was available with him. Hence, there was a clear finding that trading of the shares was modified by the Petitioner on the basis of unpublished price sensitive information. Therefore, the Petitioner was restrained from exercising the market in terms of the powers vested under Sections 11 and 11(B) of the SEBI Act, 1992 and SEBI (Insider trading Regulations) 1992. 32. This Court, had not passed any orders on merits and merely recorded the terms of the Consent Order. The Consent Order had not disposed of the proceedings but only disposed of the adjudication proceedings. Also that the two proceedings, adjudication order and 11B are separate since the Petitioner through his letter sought settlement of only one of the said proceedings via, by letter dated 15/2/2008 addressed by the Respondent to SEBI sett....
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....e consent guidelines and then start the impugned, proceedings once again. The acceptance of consent application and affidavit of undertaking is accepted by the Respondent was reported before the Division Bench of this Court and by an order dated 11/6/2008 in W.A.No. 241 of 2007 and W.P. Nos. 40158 and 40261 of 2005, this Court was pleased to hold that "Therefore,- there remains nothing to be adjudicated either in the Writ Appeal or in the writ petition as the matter has already reached finality" and recording the said submission, the Writ Appeal and Writ Petitions were dismissed as nothing remains to be adjudicated. 36. Consequent upon the final order passed by this Court in pending Writ Appeal and Writ Petition, the Adjudicating Officer/Respondent, sent a letter to the Petitioner enclosing the consent letter and the relevant portion of the consent order reads thus:- "6. In view of the above, it is hereby ordered that (i) This consent order disposes of the said proceedings pending against the Noticee under Securities and Exchange Board of India Act, 1992 in the matter of Polaris Software Lab Ltd., and (ii) Passing of this order is wit....
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....this Court that originally a notice dated 30/9/2005 was issued under Rule 4 of SEBI (Procedure for Holding Inquiry and Imposing Penalty by Adjudicating Officer) Rules, 1995 was issued to the Petitioner by the Adjudicating Officer of the Respondent mentioning that the company in respect of the alleged insider trading committed by him on the basis of unpublished price sensitive information in the shares of Polaris Software Lab Ltd., the Adjudicating Officer was appointed through an order dated 5/9/2005 by the Respondent to enquire into and adjudicate under Section 15-I r/w. Section I5-G of the SEBI Act an investigation was conducted into the alleged insider trading done by him in violation of Regulation 3 of SEBI (Prohibition of Insider Trading) Regulations, 1992 etc. and therefore, he was advised to show cause as to why an enquiry could not be held against him in terms of Rule 4 of SEBI (procedure for holding enquiry and imposing , penalty by Adjudicating Officer) Rules, 1995 and penalty not be imposed under Section 15G of the SEBI Act, 1992. 42. The learned Senior Counsel for the Petitioner brings it to the notice of this Court that the show cause notice dated 30/9/2005 was issu....
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....the writ appeal or in the writ petition as the matter has already reached finality, etc., and ultimately dismissed the writ Appeal and Writ Petitions without costs." 45. According to the Learned Senior Counsel for the Petitioner, the Consent Order dated 21/7/2008 passed by the Adjudicating Officer of the Respondent in EAD-5/VSS/RK/132523/2008 (communicated through Registered Post with Acknowledgement Due), wherein in paragraph 6(i) has pellucidly stated that "This consent order disposes of the said proceedings pending against the Noticee under Securities and Exchange Board of India Act, 1992 in the matter of Polaris Software Lab Ltd." and further in paragraph 6 (ii), it is mentioned that "Passing of this order is without prejudice to the right of SEBI to take enforcement actions including commencing/reopening of the pending proceedings against the Noticee, if SEBI finds that (a) any representation made by the Noticee in the consent proceedings is subsequently discovered to be untrue. (b) the Noticee has breached any of the clauses/conditions of undertakings/waivers filed during the current consent proceedings." 46. The impugned sho....
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....." 51. Also, Clause X of the Undertaking/Waiver furnished by the Petitioner together with application for consent dated 1/7/2007, latently and patently shows that the Petitioner neither admit nor deny the findings of fact and the conclusions of law to be the part of the Consent order etc., and further, by virtue of Clause 19, the petitioner has agreed that he would not plead limitation issue for reopening the case, if he violates/do not comply with the consent order and on 17/3/2008, the Respondent, passed an order relating to the acceptance of consent proposal and in paragraph 4, clearly the petitioner was advised to pay Rs.7,00,000/- (Rupees Fifty thousands only) to the respondent by way of a Demand Draft in favour of "Securities and Exchange Board of India" and in para 5, it was also stated that Demand Draft sent by the Petitioner to the Respondent pursuant to this letter shall he realised to them subject to the consent terms by the Honourable Court and disposing of the said cases by passing an appropriate order in the matter. 52. The Learned Senior Counsel for the Petitioner submits that the Respondent/SEBI never levied penalty of Rs. 25 crores to the Petitioner and in th....
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....tion and all the proceedings, whether contemplated or pending." 56. Also, in the impugned order dated 9/10/2012, the Whole Time Member of the respondent had found that the- "present proceedings before him are independent of the proceedings already settled vide consent order dated July 21, 2008 and the said settled adjudication proceedings were not reopened by the instant show cause notice and these conclusions/observations/finding according to the petitioner were all perverse and an arbitrary one." 57. The Learned Senior Counsel for the Petitioner contends that the question of limitation being a jurisdictional issue, the present writ petition filed by the writ petitioner is perfectly maintainable before this Court. 58. To lend support to this contention, the Learned Senior Counsel for the Petitioner relies on the decision of the Honourable Supreme Court in State of Punjab v. Bhatinda District Co-Operative Milk Producers Union Ltd. [2007] 11 SCC at page 363, wherein at special page 364, it is held as follows:- "The question of limitation being a jurisdictional question, the writ petition was maintainable of course, ordinarily the writ Court would not enter....
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....herein it is held that- "The inordinate and unexplained delay in service of charge memo would amount to violation of principles of natural justice and would vitiate the charge memo." 63. The Learned Senior Counsel for the Petitioner, in regard to his plea 'delay and latches' seeks in aid of the decision of this Court in C.P. Harish v. Central Warehousing Corpn. 2000 (3) LLN 975 at special page 976, whereby and whereunder, it is mentioned that- "inordinate delay will constitute denial of reasonable opportunity to the petitioner to defend himself land would amount to violation of principles of natural justice." 64. The learned Senior Counsel for the Petitioner submits that 'an appeal as against the order passed by the Adjudicating Officer of the Respondent is to be filed by an aggrieved party within 45 days from the date of receipt of the copy of the order passed by the consent authority, and in the present case an inordinate and unexplained delay in issuing the second show cause notice dated 26/12/2011 to the Petitioner by the Respondent is not tenable and in this regard he relies on the decision of this court in M. Elangovan v. Trichy District Ce....
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....against the Petitioner and therefore, the present Writ Petition No.29352 of 2012 filed by the Petitioner is very much maintainable, before this Court. 68. In support of his contention, the Learned Senior Counsel for the Petitioner relies on the decision of the Honourable Supreme Court in Siemens Ltd. v. State of Maharashtra [2006] (12) SCC 33, wherein it is held as follows:- "Although ordinarily a writ Court may not exercise its discretionary jurisdiction in entertaining a writ petition questioning a notice to show cause unless the same inter alia appears to have been without jurisdiction, but the question herein has to be considered from a different angle viz., when a notice is issued with premeditation a writ petition would be maintainable. In such an event, even if the Court directs the statutory authority to hear the matter afresh, ordinarily such hearing would not yield any fruitful purpose. It is evident in the instant case that the respondent has clearly made up its mind. It explicitly said so both in the counter affidavit as also in its purported show-cause notice." 69. He also cites the decision of Honourable Supreme Court in ORYX Fisheries (P.) Ltd. v. Unio....
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....said decision at page No.437, in paragraph Nos, 32 to 34 it is observed as follows:- '32. Therefore, while issuing a show cause notice, the authorities must take care to manifestly keep an open mind as they are to act-fairly in adjudging the guilt or otherwise of the person proceeded against and specially when he has the power to take a punitive step against the person after giving him a show-cause notice. 33. The principle that justice must not only be done but it must eminently appear to be done as well is equally applicable to quasi- judicial proceeding. if such a proceeding has to inspire confidence in the mind of those who are subject to it. 34. A somewhat similar observation was made by this Court in Kumaon Mandal Vikas Nigam Ltd. v. Girja shankar Pant. In that case, this Court was dealing with a show-cause notice-cum-charge sheet issued to an employee. While dealing with the same, this Court in para 25 (SCC.p.198 of the Report) by referring to the language in the show-cause notice observed as follows:- "25. Upon consideration of the language in the show-cause notice-cum-charge sheet it has been very strongly contended that it is clear ....
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....13 SCC 342, wherein at paragraph No. 4, it is observed and held as follows: "Reading of the show-cause notice suggests as if it is in continuation of the departmental proceedings. Lack of devotion to duty is mentioned as the reason for the proposed action which was the Subject-matter of the earlier proceedings as well the second proposed action based on the same cause of action proposing to deny promotion or reversion is contemplated under the impugned show-cause notice. Second penalty based on the same cause of action would amount to double jeopardy. The Tribunal was, therefore, right, in law in annulling such an action. We are not expressing any opinion on the ambit or scope of any rule." 75. The Learned Senior Counsel for the Petitioner contends that Principle of 'Double Jeopardy' is extended to administrative proceedings. He also cites the decision of Honourable Supreme Court in Larsen & Toubro Ltd. v. CCE [2007] 9 (SC) 617), wherein at special page 624, in paragraph 18, it is mentioned as follows:- "Furthermore, extension of the period of limitation entails both civil and criminal consequences and, therefore, reasons therefor must be specifically s....
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....n. 79. Apart from the above, the Learned Senior, Counsel for the Petitioner submits that there is also a 'Principle of Constructive Res Judicata' which applies to the present proceedings before, this Court and in fact, the 'Principle of Res Judicata' is extended to the administrative proceedings as per decision in Hope Plantations Ltd v. Taluk Land Board [1999] 5 SCC 590, at special page Nos.607 and 608, in paragraph No.26, it is held as follows:- "It is settled law that the principles of estoppel and res judicata are based on public policy and justice. Doctrine of res judicata is often treated as a branch of the law of estoppel though these two doctrines differ in some essential particulars. Rule of res judicata prevents the parties to a judicial determination from litigating the same question over again even though the determination may even be demonstratedly wrong. When the proceedings have attained -finality, parties are bound by the judgment and are sstopped from questioning it. They cannot litigate again on the same cause of action nor can they litigate any issue which was necessary for decision in the earlier litigation. These two aspects are "cas....
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....icata" applies to the writ proceedings and as per Guidlines/Circular issued for consent order dated 20/4/2007, no matter is reserved and in this connection, he cites the decision of Honourable Supreme Court in Virgo Industries (Engg.) (P.) Ltd. v. Venturetech Solutions (P.) Ltd. [2013] 1 SCC 625 at special page Nos. 626 and 627, wherein it is held as follows:- "Ordar 2 Rule 1 CPC requires every suit to include the whole of the claim to which the plaintiff is entitled in respect of any particular cause of action. However, the plaintiff has an option to relinquish any part of his claim if he chooses to do so. Order 2 Rule 2 CPC contemplates a situation where a plaintiff omits to sue or intentionally relinquishes any portion of the claim which he is entitled to make. If the plaintiff so acts, Order 2 Rule 2 makes it clear that he shall not, afterwards, sue for the part or portion of the claim that has been omitted or relinquished. Leave of the Court is contemplated by Order 2 Rule 2(3) in situations where a plaintiff being entitled to more than one relief on a particular cause of action, omits to sue for all such reliefs. In such a situation, the plaintiff is precluded from b....
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....mission of the Learned Senior Counsel for the Respondent that Whole Time Member of the Respondent has passed the impugned order dated 9/10/2012 and by virtue of paragraph 31, the Petitioner PAN NO. AAHPJ6020W was restrained from accessing the securities market and further prohibit him from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner for a period of two years from the date of this order and this was passed by the concerned Authority by exercising powers conferred under Section 19 r/w. Sections 11(1) and 11B of the Securities and Exchange Board of India Act, 1992 and Regulation, 11 of the SEBI (Prohibition of Insider Trading) Regulations, 1992. 86. Further, it is the contention of the Learned Senior Counsel for the Respondent that as against the impugned order dated 9/10/2012 passed by the Respondent under Section 15T of the SEBI Act, 1992, an appeal lies before the Securities Appellate Tribunal, refers to Section 15T(1) and (2) which reads as under:- 15 T: Appeal to the Securities Appellate Tribunal:- (1) Save as provided in Sub-Section (2), any person aggrieved - ....
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....eld as follows:- "Article 20 (1) applies where an accused has committed an "offence" and has been subjected to a "penalty". The respondent has not been held guilty of any offence, nor has been subjected to any penalty. He has merely been restrained from associating with any corporate body in accessing the securities for a specified period. "Offence" is an act of omission or commission which is punishable by any law for the time being in force. Protection under Article 20 (1) of the Constitution is not available to the respondent." 92. In support of the contention that the present writ petition No.29352 of 2012 filed by the Petitioner is not maintainable before this Court the Learned Senior Counsel for the Respondent cites an order of this Court dated 24/7/2009 between N. Narayanan v. SEBI [2009] 94 SCL 206 (Mad.), wherein in paragraph 37, it is observed and laid down as follows:- "Therefore, having regard to the fact that alternative remedy is available to the petitioner and that alternative remedy is effective and efficacious as the Securities Appellate Tribunal is presided over by a retired Judge of High Court and two persons, having full expertise in respect....
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....utory powers given to the Respondent and in fact, the consent order disposes of the proceedings undsr Section 15 I of the SEBI Act. 95. Repelling the contention of the learned Senior Counsel for the Petitioner that the principle of double jeopardy under Article 20 of the Constitution would apply to the Petitioners ease, the Learned Senior Counsel for the Respondent submits that the principle of double jeopardy will only apply in respect of criminal action and in the present case, direction issued under Section 11 is of civil nature and as such the principle of double jeopardy will not apply to the present case on hand. 96. At this stager the Learned Senior Counsel for the Respondent relies on the decision in Ajay Agarwal case (supra), wherein in paragraph Nos.7 and 9, it is observed as follows:- "7. Pursuant to such show-cause notice, the respondent gave his reply on 1/3/2000 and 10/7/2002. Thereafter, an opportunity of personal hearing was granted to the respondent on 14/5/2002 and the same was adjourned to 5/7/2002 end on that date the Board made its submissions. Ultimately, on 31/3/2004, the Chairman of the Board passed an order, the concluding portion whereof is ....
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.... proceedings [see Director of Enforcement v. MCEM Corpn, (P) Ltd - [1996] 2 13CC 471 : 1996 9CC (Cri.) 344. Persons who are subjected to such penalties- arte also not entitled to the protection under Article 20 (1) of the Constitution." 99. Also, in page Nos.774 and 775, in paragraph Nos.34r 37f 38 and 40 it is observed an laid down as follows:- "34. The said Act is .-pre-eminently a social welfare legislation seeking to protect the interests of common men who are all small investors. It is a well-known canon of construction that when the Court is called upon to interpret .provisions' of a social welfare legislation the paramount duty of the Court is to adapt such an interpretation as to further the purposes of law and if possible eschew the one which frustrates it. Keeping this principle in mind if we analyse some of the provisions of the Act, it appears that the Board has been established under Section 3 as a body corporate and the powers and functions of the Board have been clearly stated in Chapter' IV and under Section 11 of the said Act. 37. Section 11 - B which empowers the Board to issue certain directions also came up by way of amendment in 199....
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..../12/2011 issued under Sections 11, 11 B and 11 (4) of the SEBI Act r/w. Regulation 11 of SEBI (Prohibition of Insider Trading) Regulations, 1992 is not a criminal proceeding and moreso, it is a distinct procedure envisage under the SEBI Act. 101. Coming to the plea of 'Res Judicata" or constructive 'Res Judicata' raised on behalf of the .Petitionee the Learned Senior Counsel for the Respondent submits that in the Consent Order dated 21/7/2008, there is no finding or any decision being rendered on merits and as a matter of fact, the proceeding under Sections 11 and 15 I of the SEBX Act are different and in .fact, the purpose of the SEBI Act is to protect the interest of investors. Also, that the ingredients of Order 2 Rule 2 of CP.C, cannot come into operative play because it applies only to the Court proceedings not to the proceedings of the Respondent/Board. 102. The Learned Senior Counsel for the Respondent submitb that no limitation is .prescribed under the SSBJ for the Board to take further action and therefore, the contra plea taken on behalf of the Petitioner in regard; to the purported delay of issuance of second-show cause notice dated 26/12/2011 is -to be....
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....ner's side:- The Learned Senior Counsel for the Petitioner, by way of reply, submitted that the first show-cause notice dated 30/9/2005 refers to the initiation of proceedings under Section 15 I r/w. Section 15 G of the SEBI Act by the Respondent and for the issuance of second show-cause notice dated 26/12/2011, after 11 years of delay, without assigning proper reasons by the Respondent is an improper one. 107. It is the plea of the learned Senior Counsel for the Petitioner that "Limitation" means one has to act within a reasonable time. But the aspect of delay being one of limitation which is a jurisdictional issue and therefore, there is no question of availing of an alternative remedy by the Petitioner. 108. In other words, the Learned Counsel for the Petitioner contends that the Writ Petition filed by the Petitioner is maintainable and availing of an alternative remedy is not an embargo for the Petitioner to file the present Writ Petition before' this Court. 109. The Learned Senior Counsel for the Petitioner submits that in paragraph 9 of the decision of Hon'ble Supreme Court AJAY Aggarwal's case (supra), wherein at special page: No.770, the question ar....
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....would amount to double jeopardy. 116. The Learned Senior Counsel for the Petitioner submits that if one action is taken and another is not taken, than a person must reserve it and there is no public interest involved when the Respondent has acted after nearly 12 years in issuing the second show-cause notice. 117. Another contention of the Learned Senior Counsel for the Petitioner is that the- Petitioner has-approached this Court by filing the present Writ Petition and somebody should raise his/their voice against the Respondent. 118. Glimpse of decisions relied on petitioner's side:- At this point of time, this Court refers to the decisions: relied on by the Petitioner. (i) In the decision of the Hon'ble supreme Court in Himmatlal Harilal Mehta v. State of Madhya Pradesh AIR 1954 SC 403 it is held as follows:- "The contention that because a remedy under the impugned Act is available to the asseesee, he is disentitled to relief under Art.226' stands negatived by the decision in AIR 1953 SC 252 of this Court in the State of Bombay v. The United Motors (India) Ltd. The principle that a Court will not issue a prerogative writ when an adequate alte....
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.... authority is questioned oh the ground of lack of jurisdiction, alternative remedy is not a bar." (vi) in the decision of the Hon'ble Supreme Court in State of H.P v. Gujarat Ambuja Cement Ltd. [2005] 6 SCC 499,. wherein at page 503, it is held an follows:- "Where under a statute these its an allegation of infringement of fundamental Eights or when on the undisputed facts the taxing authorities are shown to have assumed jurisdiction which they do not possess, these can be the grounds an which the writ petitions can foe entertained. But normally the High Court should not entertain writ petitions unless it is shown that there is .something more in a case,, something going to the root of the jurisdiction of the .officer, something which would show that it would be a case, of palpable injustice to the writ petitioner to force him to adopt the remedies provided by the statute." (vii) In the decision of the Hon'ble Supreme Court in Sangeetaben Mahendrabhai Patel v. State of Gujarat [2012] 7 SCC 621) it is held as follows:- 'The fundamental right which is guaranteed under Article 20 (2) enunciates the principle of "Autrefois convict" or "dou....
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....titution of India, The principle of "constructive rss judicata" applies also to a writ proceeding. Furthermore, admittedly, such a contention has not been raised even in the second writ application." (b) In the decision of the Hon'ble Supreme Court in Raghavendra Rao case (supra), at special page No.636, it is held as follows:- "The claim of the appellants is barred under the principles of res judicata/constructive res judicata, the earlier judgment having attained finality. The principle of res judicata applies also to the writ proceedings.." 120. More importantly, this Courr at this juncturer pertinently makes a significant reference to the fact that the Respondent/SBIBI has been empowered to provide measures far preventing 'insider trading' and in. pursuance of the same, SEBI: [Prevention of Insider Trading Regulations 1992) has been framed. 121. A Panoramic Spectrum of Some Provisions of SEBI Act:- In terms of Section 4 (5) of the SEBI Act, the Chairman and other members of the Board are noted experts. In fact, SEBI/Boardr under Section 11 of the Act has been empowered to take appropriate measures for protecting the Investors in Securities an....
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....ating Officer) Rules, 1995 envisages that whenever the Board is of the opinion that there are grounds for adjudicating under any of the provisions in Chapter 6A of the Act it may appoint any of its Officer not below the rank of Division Chief to be an Adjudicating Officer for the purpose of conducting an enquiry for the said purpose. It cannot be gain said that the opinion of the Board is to be formed only after applying its mind and examining the record which is not an exercise of mere acting on the recommendations of the Investigating Officer. 128. An Adjudicating Officer under the SEBI is to hold an "Enquiry" in the prescribed manner for the purpose of holding an enquiry for awarding, penalties. SEBI (Procedure for Holding Enquiry and imposing penalties by Adjudicating Officer) Rules, 1995 have been framed by the Central Government in exercise of power under Section 29 (2) (d) (c) of the Act. The Adjudicating Officer in the first instance is required to send a show cause notice giving the notice a time period of minimum 14 days to reply. Such notice is to indicate the nature of defaults alleged. An opportunity to represent against an envisaged action is the prime essence rath....
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....oceedings which are criminal in nature and explicit provision is made under Section 24 (A) of the SEBI Act. Composition of offences is also permitted under Section 23N of Securities Contract (Regulation) Act 1996 and Section 22A of the Depositories Act. There cannot be two opinion of the fact that the consent scheme of SEBI is similar to the 'Amnesty Scheme Stock Exchanges'. 133. The Securities Appellate Tribunal, as per Section 15T off the SEBI Act has power to plenary review where it lies and is empowered to look into all relevant materials and consider the law and decide those facts based on which an order can be passed in respect of Appeals filed before it. Also, the Securities Appellate Tribunal has powers to examine the facts of the case afresh, evaluate the evidence and test the benefit- of the order passed with reference to the applicable law. 134. A statutory obligation is showered on the Securities Appellate Tribunal as par section 15 (6) of the SEIBI Act to dispose of Appeals finally within six months from the date of receipt of the appeals. 135. Section 15U(1) of the SEBI Act, 1992 specifies that the Securities Appellate Tribunal shall not be bound by t....
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.... v. State of Bombay AIR 1953 SC 325. 140. As far as the present case is concerned, at the risk of repetition, it is to be pointed out by this Court that the Petitioner was issued with the show cause adjudication proceedings dated 30/9/2005 by the Respondent under Section 15J r/w. Section 15 G of the SEBI Act. Ultimately, on 21/7/2008 a consent order was passed by the Respondent, whereby the said order disposed of the said proceedings pending against the Petitioner/Notices under the SEBI Act in the matter of Polaris Software Lab Limited and in fact, the said consent order para 6 (2) clearly points out that Passing of this order i.e without prejudice to the right of SEBI to take enforcement actions including commencing/ reopening of the pending proceedings against the Notices, if SEBI finds that a. any representation made by the Notices in the consent proceedings is subsequently discovered to be untrue, b the Notices has breached any of the clauses/conditions of undertakings/waivers filed during the current consent proceedings. 141. In the present case on hand before this Court, the Respondent issued the second show cause notice dated 26/12/2011 to the Peti....
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....ding proceedings against the Notices etc after the issuance of second show cause notice dated 26/12/2011 to the petitioner, the impugned order dated 9/10/2012 has been passed by the Respondent against the Petitioner invoking the power under Section 19 r/w. Section 11(1) and 11(B) of the SEBI Act coupled with Regulation 11 of the SEBI (prohibition of Insider trading) Regulations, 1992, in and by which the show cause notices dated 26/12-2011 was disposed of. 143. It is not out of place for this Court to make an apt mention that before entertaining a Writ Petition,- the High Court should consider parameters relating to the existence of an alternate remedy and in appropriate facts and circumstances regulate the Petitioner to avail of such remedy at the first instance as per decision of" the Honourable Supreme Court in CCT v. Indian Explosives Ltd. [2008] 3 SCC-688. 144. This Court also recalls the further decision of the Honourable Supreme Court in A.P. Foods v. Samuel 2006 (5) SCC 469 it is held that- '"Where" statutory remedy is provided, the Writ Petition may not be entertained.' 145. Be that as it may on a careful consideration of respective contentions an....