2023 (6) TMI 1507

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....iralal & Co. ORDER: Per: Justice Tarun Agarwala, Presiding Officer (Oral) 1. The appellants being noticees no. 1,2,3 & 6 have challenged the order of the Adjudicating Officer ("AO" for convenience) of the Securities and Exchange Board of India ("SEBI" for convenience) dated December 29, 2022 imposing a penalty under Section 15A(b) of the SEBI Act, 1992 for violation of Regulation 8A(2) & (3) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ("SAST Regulations" for convenience). 2. The facts leading to the filing of the present appeal is, that the SEBI received a reference from the Income Tax Department regarding bogus purchase made by the Company-noticee no. 1 from its sister concerns and inflation ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....iew, the entire proceedings initiated by the AO is a misuse of the process of law. The forensic audit report was submitted on February 27, 2012 finding financial irregularities, violations of PFUTP and SAST Regulations. Based on these findings the WTM issued a show cause notice and consciously did not include the charge of the SAST violations. By not including the charge in the show cause notice it would be deemed that SEBI chose not to pursue this violation and, consequently, we are of the opinion, that the respondents were estopped from initiating a show cause notice relating to violations of the SAST Regulations especially when that allegation was not included in the earlier show cause notice. The principle of estoppel will squarely appl....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ach case and that no hard and fast rule can be laid down in this regard as the determination of this question would depend on the facts of each case. This proposition of law has been consistently reiterated by the Supreme Court in Bhavnagar University v. Palitana Sugar Mill (2004) Vol.12 SCC 670, State of Punjab vs. Bhatinda District Coop. Milk P. Union Ltd (2007) Vol.11 SCC 363 and Joint Collector Ranga Reddy Dist. & Anr. vs. D. Narsing Rao & Ors. (2015) Vol. 3 SCC 695. The Supreme Court recently in the case of Adjudicating Officer, SEBI vs. Bhavesh Pabari (2019) SCC Online SC 294 held: "There are judgments which hold that when the period of limitation is not prescribed, such power must be exercised within a reasonable time. What ....