2022 (8) TMI 1415 - HC - SEBI

Recovery proceedings - attachment orders - real owner of property - objection regarding the maintainability of the present petition - alternate statutory remedy available to Petitioner under Section 15T read with Section 28A of the SEBI Act, 1992 and Rule 26 of the Second Schedule to the Income Tax Act, 1961 - HELD THAT - Writ would lie before this Court only there is a jurisdictional error in the impugned order. The Court is however unable to agree. The Petitioner s primary objection, is that the attached property belongs to Kuber Floritech Ltd. Petitioner and not Kuber Planters Ltd., against whom the recovery certificate has been issued. SEBI was not satisfied with Petitioner s claim on merits and therefore this Court does not find any jurisdictional error to entertain the petition. Moreover, as pointed out by Ms. Anand, Rule 11 of the Second Schedule of the Income Tax Act, 1961, applicable to the proceedings under dispute, provides complete mechanism of investigation by the Tax Recovery Officer for adjudication of any claim or objection to attachment or sale of any property in execution of a certificate. The aforesaid Rule is a complete code in itself. Moreover, as acknowledged by the Petitioner and recorded in the order there is an alternate statutory remedy, available with the Petitioner under Section 15T read with Section 28A of the SEBI Act, 1992 and Rule 26 of the Second Schedule to the Income Tax Act, 1961. The Court is not inclined to entertain the present petition. Dismissed along with other pending applications. All the rights and contentions of the parties are left open. The Court has not examined the merits of the case and, in the event, the Petitioner were to take recourse to alternate statutory remedy, the concerned authority shall adjudicate the claim of Petitioner, uninfluenced by any of the observations made above.

Summary

Issues:
1. Maintainability of the writ petition challenging SEBI's order.
2. Jurisdictional error in SEBI's decision regarding property ownership.
3. Availability of alternate statutory remedies under SEBI Act and Income Tax Act.

Analysis:
1. The judgment deals with the maintainability of a writ petition challenging an order issued by SEBI. The Respondent's counsel objected to the petition's maintainability, arguing that the Petitioner had an alternative remedy available under the SEBI Act and Income Tax Act. The Court heard both parties at length before proceeding.

2. The primary issue raised by the Petitioner was the ownership of the attached property, claiming it belonged to a different entity than the one against whom the recovery certificate was issued. SEBI, in its decision, detailed the Petitioner's failure to provide certified copies of title deeds and information on the source of funds used to purchase the property. The Court found no jurisdictional error in SEBI's decision and emphasized that the Income Tax Act's Rule 11 provides a complete mechanism for investigating claims or objections to property attachment.

3. The judgment highlighted the availability of alternate statutory remedies under Section 15T of the SEBI Act and Rule 26 of the Second Schedule to the Income Tax Act, as acknowledged by the Petitioner in a previous order. The Court dismissed the present petition, noting that the Petitioner could pursue the alternate statutory remedies available. It emphasized that all rights and contentions of the parties were left open for adjudication by the relevant authority, uninfluenced by the observations made in the current judgment.

This detailed analysis of the judgment addresses the issues of maintainability, jurisdictional error, and alternate statutory remedies, providing a comprehensive understanding of the legal aspects involved in the case.