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TMI Blog2019 (10) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... t as attachment order was served through his employer which formed the basis of his termination from his service. When the appellant came to know about the impugned order sometime in May 2017, he made an attempt to find out the matter and took steps to file a complaint before the EOW and representation before SEBI. We are constraint to observe that satisfactory explanation has not been given by the appellant for the period from May 2017 till September 2018 that is the date when the appeal was eventually filed, Appellant has made out a case that the show cause notice was not served upon him. Since the appellant had left the last known address available with SEBI and was working with another company and at another place, we are of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubhav Ghosh, Ms. Rashi Dalmia, Advocates i/b The Law Point ORDER Per : Justice Tarun Agarwala, Presiding Officer 1. The present appeal has been filed against the order dated August 27, 2014 passed by the Adjudicating Officer (hereinafter referred to as, AO ) imposing a penalty of ₹ 70 lacs under Section 15HA of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as, SEBI Act ) for violating Regulations 3 and 4 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as PFUTP Regulations ). The appellant has also challenged the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 and thereafter joined another firm known as Elite Wealth Advisors Ltd. (Elite). It was contended that on May 12, 2017 while trying to withdraw some money from his account through the debit card the transactions were declined and, upon an enquiry made by the appellant from the bank, the appellant came to know that the account was blocked due to a legal order. Before he could further investigate in the matter, his employer, namely, Elite received the attachment proceedings from National Securities Depository Ltd. (NSDL) and, on that basis, his employer terminated his services on May 22, 2017. It is alleged that thereafter he made enquiries and contacted Mr. Sushil Kumar Jain and then came to know about the transactions done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. It was contended by SEBI that the service of the show cause notice etc. was done in accordance with the provisions of Rule 7 of the Securities and Exchange Board of India (Procedure of Holding Inquiry and Imposing Penalty by Adjudicating Officer) Rules, 1995 (hereinafter referred to as, Inquiry Rules ). It was contended that the procedure laid down in the Inquiry Rules was duly followed and, therefore, there was no violation of natural justice. 7. Having heard the learned counsel for the parties, we find that due procedure for serving the show cause notice was duly followed by SEBI in accordance with the Rule 7 of the Inquiry Rules. The summons was sent at the address that was obtained by SEBI from the stock exchange. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty has been imposed upon him and when there is an allegation that a fraud has been played upon the appellant by his ex-employer. We are of the opinion that the appellant is entitled to contest the matter on merits. We are also of the opinion that the delay of five years should be condoned on payment of costs. 11. In Civil Appeal No. 4649 of 2006 (Noted Infotech P. Ltd. vs. Securities and Exchange Board of India decided on August 4, 2008), the Hon ble Supreme Court condoned the delay of 720 days on payment of costs. 12. In Ummer vs. Pottengal Subinda, [2018 SCC OnLine SC 199] , the Hon ble Supreme Court held that the appellant was not required to explain each days delay in filing the appeal and if plausibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice and thereafter the AO will proceed from there onwards. The appellant will also provide the address for communication of the proceedings and shall file a reply within the appropriate period granted by AO. We also direct the AO to provide adequate opportunity of hearing to the appellant and pass an order within six months thereafter. We also direct that the attachment proceedings initiated by the Recovery Officer will continue to operate for a period of six months from today and in the event the adjudication proceeding does not come to an end, it would be open to the parties to move an application before this Tribunal for further orders. 16. In the circumstances of the case, parties shall bear their own costs. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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