TaxTMI 
TaxTMI 
2023 (8) TMI 1667
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...., Director in Sahara India Commercial Corporation Ltd. (hereinafter referred to as 'SICCL/the Company') to discharge the liability of their late father under Section 73(2) and 62(1) of the Companies Act, 1956. 3. The facts leading to the filing of the present appeal is, that a show cause notice dated 20th February, 2015 was issued to SICCL and its Directors for violating the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the 'SEBI Act'), the Companies Act, 1956 (hereinafter referred to as the 'Companies Act'), Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (hereinafter referred to as the 'ICDR Regulations') and the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992 (hereinafter referred to as the 'Merchant Bankers Regulations'). 4. It transpires that SICCL mobilized from the public, through the offer of Optionally Fully Convertible Debentures (hereinafter referred to as 'OFCDs') of SICCL and raised a sum of Rs.14,106 crores from 1,98,39,939 allottees in violation of the SEBI Act, the Companies Act and the ICDR Regulations etc. The show cause notice was issued agains....
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....zed Bank. Shri I. Ahmad, Shri O.P. Dixit, Shri Asad Ahmad and Shri A.N. Mukherjee and Shri C.B. Thapa and directors namely, Shri Subrata Roy Sahara, Shri O.P. Shrivastava, Shri J.B. Roy, Legal Representatives of Late Lt. Col. (Retd) D. S. Thapa as per applicable law, Legal Representatives of Late Shri P.S. Mishra as per applicable law, Legal Representatives of Late Shri Y.N. Saxena as per applicable law, Lt. Gen. (Retd.) A.S. Rao and Shri Ranoj Das Gupta are directed to compensate from the said deposit the investors in accordance with their subscription money along with interest. (c) The repayments, compensation amount and interest payments to investors shall be effected only through Bank Demand Draft or Pay Order both of which should be crossed as "Non-Transferable". (d) If the Company had repaid the investors as per their submissions as per section 73(2) of the Companies Act, the above directions in (a) and (b) shall be applicable as modified herein, for the amounts claimed to have been returned to the investors: Such prior repayments should have been made by the Company as per the requirements laid down in paragraph 87(c) above and the same shall be certified b....
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....(Retd.) A.S. Rao, Shri Ranoj Das Gupta, Shri I. Ahmad, Shri O.P. Dixit, Shri Asad Ahmad, Shri A.N. Mukherjee, Shri C.B. Thapa, Legal Representatives of Late Lt. Col. (Retd) D. S. Thapa as per applicable law, Legal Representatives of Late Shri P.S. Mishra as per applicable law, Legal Representatives of Late Shri Y.N. Saxena as per applicable law shall issue public notice, in all editions of two National Dailies (one English and one Hindi) and in one local daily with wide circulation, detailing the modalities for refund, including the details of contact persons such as names, addresses and contact details, within 15 days of this Order coming into effect. (j) After completing the aforesaid repayments, SICCL, Shri Subrata Roy Sahara, Shri O.P. Shrivastava, Shri J.B. Roy, Lt. Gen.(Retd.) A.S. Rao, Shri Ranoj Das Gupta, Shri I. Ahmad, Shri O.P. Dixit, Shri Asad Ahmad and Shri A.N. Mukherjee, Shri C.B. Thapa, Legal Representatives of Late Lt. Col. (Retd) D. S. Thapa as per applicable law, Legal Representatives of Late Shri P.S. Mishra as per applicable law, Legal Representatives of Late Shri Y.N. Saxena as per applicable law, shall file a report of such completion with SEBI, with....
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....termediary registered with SEBI from the date of this order till the expiry of 4 (four) years from the date of completion of compensation to investors as directed above. (n) M/s Sahara India is directed not to, directly or indirectly, access the securities market, by issuing prospectus, offer document or advertisement soliciting money from the public and is further restrained and prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in whatsoever manner for a period of 4 (four) years from the date of this Order. It is also restrained from associating themselves with any listed public company and any public company which intends to raise money from the public, or any intermediary registered with SEBI for a period of 4 (four) years from the date of this Order. (o) The entities who are subject to the order of Hon'ble Supreme Court of India mentioned in paragraph 86 of this order shall, in accordance with the directions of the said order deposit the sale proceeds of the assets in the SEBI Sahara Refund Fund. The said fund shall be utilised for the repayment of the investors of this Company with the prior permission of th....
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....n being filed the by the legal representatives of Late Shri Y.N. Saxena. 7. Based on the aforesaid order, the legal representatives were duly served with the order dated 31st October, 2018 and after considering the submissions the impugned order was passed on 21st January, 2020 directing refund of money collected by the Company. 8. We have heard Mr. Anshumaan Sahni, Advocate assisted by Ms. Nupur Shah and Mr. Amir Arsiwala, Advocates for the appellants and Mr. Sumit Rai, Advocate assisted by Mr. Mihir Mody, Mr. Arnav Misra, Ms. Shilpa Joshi and Mr. Harshvardhan Melanta, Advocates for the Respondent. 9. The admitted facts before us is, that Late Shri Y.N. Saxena was a Director/Non-Executive Director in SICCL. He died on 1st November, 2013. The show cause notice was issued against a dead person, namely, Shri Y.N. Saxena on 20th February, 2015, much after the death of Shri Y.N. Saxena. An order dated 31st October, 2018 was passed against Shri Y.N. Saxena indicting him and other Directors along with the Company for violation of the Companies Act and directing them to refund the money collected by the Company. The WTM while passing the order dated 31st October, 2018 was aware t....
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....Court held that an individual assessee has to be a living person and there can be no assessment on a dead person. It was again reaffirmed by the Supreme Court in CIT vs. James Anderson, AIR (1964) SC 1761. As recent in 2015, the aforesaid decision of the Bombay High Court was again reaffirmed in Shabina Abraham and Ors. vs. CCE and Customs, (2015) 10 SCC 770, wherein the Supreme Court framed the following issues which arose for consideration, namely, "This appeal raises questions as to whether the dead person's property, in the form of his or her estate, can be taxed without the necessary machinery provisions in a tax statute. The precise question that arises in the present case is whether an assessment proceeding under the Central Excises and Salt Act, 1944, can continue against the legal representatives/estate of a sole proprietor/manufacturer after he is dead." 14. The Supreme Court held that since the taxing provision does not provide for recovery of money from the dead man's property the same cannot be recovered from the legal representatives of the deceased. Further, since no assessment was made during the life time of the deceased, the assessment proceedings cann....
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....e Board may, by an order, for reasons to be recorded in writing, levy penalty under sections 15A, 15B, 15C, 15D, 15E, 15EA, 15EB, 15F, 15G, 15H, 15HA and 15HB after holding an inquiry in the prescribed manner." 18. A perusal of the aforesaid indicates that the directions can be issued to any persons or class of persons referred to in Section 12 or associated with the securities market. The 'class of persons' has been specified in Section 12 but the term 'person' has not been defined under the SEBI Act. 19. Section 3(42) of the General Clause Act, 1897 defines 'person' to mean that 'persons shall include any Company or association or body of individuals, whether incorporated or not'. 20. The aforesaid definition clearly indicates that it does not include legal representative of persons who are since deceased and, therefore, we are of a definite opinion that in the absence of any provision in the SEBI Act to recover monies from the estate of the deceased, no such directions can be issued to the legal representatives of the deceased. Unless and until there is a specific provision to recover the monies under the Act no directions can be issued to recover the monies from the es....
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.... may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased and all the provisions of this Act shall apply accordingly; (b) any proceeding for disgorgement, refund or an action for recovery before the Recovery Officer under this Act, except a proceeding for levy of penalty, which could have been initiated against the deceased if he had survived, may be initiated against the legal representative and all the provisions of this Act shall apply accordingly. (3) Every legal representative shall be personally liable for any sum payable by him in his capacity as legal representative if, while his liability for such sum remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. (4) The liability of a legal representative under this section shall be limited to the extent to which the estate of the deceased is capable of meeting the liability. Explanation - For the purposes of this section "legal r....