TaxTMI 
TaxTMI 
2021 (6) TMI 1201
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....tial Acquisition of Shares and Takeovers) Regulations, 1997 ("SAST Regulations" for convenience) and Regulation 13 (1) of SEBI (Prohibition of Insider Trading) Regulations, 1992 ("PIT" for convenience) in the scrip of Usher Agro Limited ("UAL or Company" for convenience). The WTM accordingly debarred the appellant from buying, selling or otherwise dealing in the securities market directly or indirectly for a period of two years. 2. SEBI witnessed a significant rise in the price of the scrip of the Company and accordingly conducted an investigation for the period August 20, 2008 to December 31, 2008 to examine possible violation of the SEBI Act and its Regulations. 3. Based on the investigation, a show cause notice dated May 18, 2015 was issued against the appellant and 12 other entities alleging that the appellant along with other Group-1 entities had indulged in trading amongst themselves by way of executing self-trades resulting in no change in the beneficial ownership and thereby created artificial volume in the scrip of the company which was violative of regulations 3 and 4 of the PFUTP Regulations. 4. It was alleged in the show cause notice that the group purchased 81....
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.... PCS for the appellant and Shri Mustafa Doctor, the learned senior counsel assisted by Shri Abhiraj Arora, Ms. Rashi Dalmia and Shri Karthik Narayan, advocates for the respondent. 6. It was urged by the learned senior counsel for the appellant that as per the Policy of SEBI dated May 16, 2017 mere occurrence of self-trades should not be considered per se illegal in the absence of any other additional evidence to prove manipulation or intent to defraud which in the instant case was missing and therefore the appellant could not be held guilty under Regulation 4(2)(d) of the PFUTP Regulations. It was also urged that against the same issue, i.e., on the same trades, separate proceedings were initiated by the Adjudicating Officer ("AO" for convenience) under Section 15I, and pursuant to the show cause notice dated April 06, 2015, the AO after considering the Policy dated May 16, 2017 and the evidence on the record, came to the conclusion that there was no manipulative intent on the part of the appellant and exonerated the appellant and quashed the proceedings. It was urged that the said order has become final and therefore it was binding on SEBI and was no longer open for SEBI to tak....
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....as to whether the self-trades executed by the appellant is miniscule compared with the total trading volume of the scrips or that the self-trades were unintentional or inadvertent nor it is necessary for us to go into the question as to whether the Policy dated May 16, 2017 is applicable in favour of the appellant or not in as much as we are of the opinion that the controversy can be decided on the following issue. 9. No doubt, the provisions of Sections 11B and 15I are different and distinct. The powers exercised by the Board under Chapter IV under Sections 11 and 11B are powers prescribed under the Act. The directions issued under Section 11B after due investigation under Section 11C are remedial in nature. On the other hand, under Section 15I under Chapter VI-A, a mechanism has been provided to an AO to impose penalties for various violations if committed under the Act or Regulations framed therein. 10. Directions under Section 11B of the Act can be issued if the Board is satisfied that it is necessary in the interest of the investors or orderly development of the securities market or where the affairs are being conducted in a manner which is detrimental to the interests o....
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....ation. These two aspects are "cause of action estoppel" and "issue estoppel". These two terms are of common law origin. Again once an issue has been finally determined, parties cannot subsequently in the same suit advance arguments or adduce further evidence directed to showing that the issue was wrongly determined. Their only remedy is to approach the higher forum if available. The determination of the issue between the parties gives rise to, as noted above, an issue estoppel. It operates in any subsequent proceedings in the same suit in which the issue had been determined. It also operates in subsequent suits between the same parties in which the same issue arises. Section 11 of the Code of Civil Procedure contains provisions of res judicata but these are not exhaustive of the general doctrine of res judicata. Legal principles of estoppel and res judicata are equally applicable in proceedings before administrative authorities as they are based on public policy and justice." 15. In Gopal Prasad Sinha vs. State of Bihar (1970) 2 SCC 905, the Supreme Court held that the basic principle underlying the rule of issue estoppel is that the same issue of fact and law must have been det....
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....f those sections. (3) The Board may call for and examine the record of any proceedings under this section and if it considers that the order passed by the adjudicating officer is erroneous to the extent it is not in the interests of the securities market, it may, after making or causing to be made such inquiry as it deems necessary, pass an order enhancing the quantum of penalty, if the circumstances of the case so justify: Provided that no such order shall be passed unless the person concerned has been given an opportunity of being heard in the matter: Provided further that nothing contained in this subsection shall be applicable after an expiry of a period of three months from the date of the order passed by the adjudicating officer or disposal of the appeal under section 15T, whichever is earlier." 20. A perusal of sub-clause (3) of Section 15-I gives powers to the Board to call for and re-examine the record of the proceedings before the AO and, if the Board considers that the order is erroneous and is not in the interest of the securities market it may pass further order after making an inquiry. Thus if the Board was satisfied that the order of the....