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TMI Blog2019 (12) TMI 1144X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the date when the documents were supplied for filing a reply. Further request for adjournment was not unreasonable. Further, the period granted for filing reply was wholly inadequate considering the voluminous documents running into thousands of pages relied upon by the respondent. In the light of the aforesaid, we are of the opinion that no reasonable opportunity was given by the respondent no. 1 to the appellant no. 2 for the purpose of filing objection/reply to the show cause notice. The request on behalf of the appellant no. 2 to permit his advocate to place submissions on the issue of jurisdiction was not unreasonable and should not have been rejected. The finding that the appellant was avoiding to show cause on one pretext or the other is a finding based on surmises and conjectures. As per sequence of events stated aforesaid, it is clear that there has been no unreasonable request on the part of the appellant in seeking time to file their written submissions and for placing their arguments. In our opinion the rejection of the request of the appellant on July 20. 2011 for an adjournment, was violative of the principles of natural justice. Consequently, the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the other as Managing Director and Chairman in Neptune Overseas Limited. Pursuant to the scheme of amalgamation, NMCE has merged with Indian Commodity Exchange Limited ('ICEL' for short) in 2018. 3. FMC is the regulatory authority set up by the Government of India in accordance with the provisions of Section 3(1) of the FCR Act to regulate the commodity futures markets. Section 3(2) of the FCR Act provides for constitution of the FMC. 4. A complaint dated November 28, 2010 relating to the trading irregularities and abuse of its position in the NMCE committed by appellant no. 1 and appellant no. 2 was received by the FMC, based on which an enquiry was initiated on December 14, 2010 which resulted in the inspection of the books of accounts. An enquiry into the affairs of NMCE prima facie revealed serious acts of omission and commission committed by appellant no. 2. Accordingly, a show cause notice dated June 21, 2011 was issued to the appellant no. 2 as Ex-Managing Director and Chief Executive Officer and as Vice Chairman of NMCE directing him to file an appropriate reply and appear for hearing on July 4, 2011. The show cause notice prima facie alleged tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Division Bench also recorded that if any documents are in possession of the FMC and the same has not been supplied to the appellants the same would be supplied on payment of usual charges, if any. 7. The said order of the Division Bench of the Gujarat High Court was challenged by FMC before the Supreme Court of India by filing a Special Leave Petition. The Supreme Court while entertaining the SLP passed an interim order staying the effect and operation of the order of the Division Bench of the Gujarat High Court and further directed that the impugned order would stand revived and remain operative. Subsequently, the Supreme Court by an order dated March 7, 2018 quashed and set aside the orders of the Gujarat High Court and granted permission to the appellants to file a statutory appeal before the Securities Appellate Tribunal (SAT) questioning the validity of the order dated July 23, 2011. The order of the Supreme Court dated March 7, 2018 is extracted hereunder:- ORDER We have heard learned counsel for the parties. In our opinion, it would be more appropriate if Respondent Nos. 1 and 2 are granted permission to file a statutory appeal before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and authority to issue the show cause notice and impose a penalty upon the appellants. In support of the submission, the respondent no. 1 relied upon a decision of the Supreme Court in First Commodities Exchange of India v. Union of India 2015 SC Exchange Online Ker 3808. 13. Learned counsel for the Respondent no. 2 submitted that pursuant to the directions issued by FMC in the impugned order dated July 23, 2011, respondent no. 2 NMCE has carried out and executed the said directions and thus contended that the appeal has become infructuous. 14. We are of the opinion that even if the directions have been carried out by respondent no. 2 the appellants have a legal right to question the veracity of the order on merits and contend that no such direction could have been issued. 15. On the issue of violation of natural justice, we find that admittedly appellant no. 1 and respondent no. 2 were not issued any show cause notice. This fact was conceded by the respondent no. 1 before the Gujarat High Court which respondent no. 1 cannot resile. The respondent no. 1 further agreed to issue a show cause notice to appellant no. 1 and respondent no. 2. We find that sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order was passed on July 23, 2011 which according to the appellants was a Saturday when the FMC was closed. The respondents contend that the aforesaid sequence of events clearly indicates that sufficient time was granted to the appellants to place their view point which they failed and consequently there was no violation of the principles of natural justice. 18. Having heard the learned counsel for the parties on this issue we find that admittedly the show cause notice was issued on June 21, 2011 which was received by appellant no. 2 shortly thereafter. The documents in part were only supplied on July 5, 2011. Accordingly, the appellant no. 2 cannot be faulted for the adjournment made on July 4, 2011. According to the appellant voluminous documents running into thousands of pages were provided and many documents were not provided for which further request was made which was rejected by the respondent. Request for further time to place their written submissions was granted till July 20, 2011. The request for adjournment on July 20, 2011 was rejected on the ground that the matter was being delayed. We find that only two weeks had elapsed from the date when the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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