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TMI Blog2010 (9) TMI 1249X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by it. We consider it necessary to remind the respondent Board once again that in a situation where one person's statement is being relied upon as against the other, permitting cross examination of that person by the opposite side is the best way of arriving at the truth which is the only aim of an enquiry, whether the enquiry is by a whole time member or by an enquiry officer or by an adjudicating officer. We hope that this fundamental principle is not lost sight of by the respondent Board. This is yet another case where the appellant has approached us with a similar grievance. 2. The appellant before us is a member of the Bombay Stock Exchange, Mumbai carrying on his business as a share and stock broker and is registered with the Board under Section 12 of the Securities and Exchange Board of India Act, 1992 (for short the Act). The appellant states that in the ordinary course of his business, he has been selling and purchasing shares of Global Telesystems Limited on behalf of Niskalp Investments and Trading Company Private Limited and Tata Finance Limited (hereinafter called Niskalp and TFL respectively) on the verbal orders/instructions on telephone from A.L. Shilot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice. He wanted these persons to be present on the date of hearing so that he could cross examine them. The enquiry officer informed the appellant by his letter dated July, 20, 2010 that the hearing would continue as scheduled on July 29, 2010 but no cross-examination of witnesses would be held . It was then that the appellant filed the present appeal impugning the decision of the enquiry officer not to allow cross examination. 3. At the outset, we may mention that we do not normally interfere at the stage of the enquiry proceedings primarily for the reason that any observation made by us for or against either party may prejudice the proceedings/parties. But in the instant case, we think it is necessary to intervene to avoid another round of litigation between the parties in the already more than 9 years old case. We are of the view that, in the circumstances of the present case, the appellant is entitled to cross examine the persons on whose statements strong reliance has been placed in the show cause notice to establish the charges levelled against him. If we do not step in at this stage, the enquiry officer shall proceed with the enquiry without allowing cross exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted upon. On the other hand what it means is that no material can be relied upon to establish a contested fact which are not spoken to by persons who are competent to speak about them and are subjected to cross-examination by the party against whom they are sought to be used. In Kishinchand Chellaram v. Commissioner of Income-tax AIR 1980 SC 2117, Hon'ble Mr. Justice P.N. Bhagwati (as his Lordship then was) speaking for the bench observed in paragraph 6 of the judgment as under: It will therefore be seen that, even if we assume that this letter was in fact addressed by the manager of the Punjab National Bank Limited to the Income-tax Officer, no reliance could be placed upon it, since it was not shown to the assessee until at the stage of preparation of the supplemental statement of the case and no opportunity to cross-examine the manager of the Bank could in the circumstances be sought or availed of by the assessee. It is true that the proceedings under the Income-tax Law are not governed by the strict rules of evidence and therefore it might be said that even without calling the Manager of the Bank in evidence to prove this letter, it could be taken into account as ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to be placed which happens to be the case before us. 6. We may now notice an objection raised by the learned senior counsel appearing for the Board. He contended that the present appeal was not maintainable and that the impugned communication dated July 22, 2010 was not an order within the meaning of Section 15T of the Act. We do not agree with him. The relevant part of Section 15T reads as under: T. [(1) Save as provided in Sub-section (2), any person aggrieved, (a)by an order of the Board made, on and after the commencement of the Securities Laws (Second Amendment) Act, 1999, under this Act, or the rules or regulations made thereunder; or (b)by an order made by an adjudicating officer under this Act, may prefer an appeal to a Securities Appellate Tribunal having jurisdiction in the matter. The words an order appearing in this provision are comprehensive enough to include every order or decision taken by the Board which adversely affects the rights of the parties. Black's Law Dictionary (Sixth Edition) defines the word 'order' to mean A mandate; command or direction authoritatively given; rule or regulation. Direction of a court or judge made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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