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TMI Blog2021 (3) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the UPSI Period, as mentioned against their respective names in below table: Table-11 Name PAN Number Unlawful loss avoided (in Rs.) Rajeev Vasant Sheth AAFPS7760Q 1,26,59,481.50 Aarti Sheth AAGPS3762H 2,09,930.40 Divya Sheth AAHPS8431L 9,62,060.70 48. The persons mentioned in Table-11 above are also directed that above mentioned individual amount of unlawful loss avoided is to be credited to an interest bearing Escrow Account ["Escrow Account in Compliance with SEBI Order dated September 04, 2020 - A/c (in the name of the respective person)"] created specifically for the purpose in a Nationalized Bank. The Escrow Account(s) shall create a lien in favour of SEBI and the monies kept therein shall not be released without permission from SEBI. 49. Banks are directed that no debits shall be made, without permission of SEBI, in respect of the bank accounts held jointly or severally by the persons mentioned under Table-11, except for the purposes of transfer of funds to the Escrow Account. Further, the Depositories are also directed that no debit shall be made, without permission of SEBI, in respect of the demat accounts held by the aforesaid persons. However, credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Shri Anubhav Ghosh and Shri Ravishekhar Pandey, advocates for the respondent through video conference. 5. It is the contention of the learned counsel Shri Somasekhar Sundaresan, appearing on behalf of the appellants that the impugned order has been passed in haste and that too without show-causing the appellants and thereby not providing them an opportunity of presenting the full facts. If such an opportunity had been given, the appellants would have been able to demonstrate that there was no UPSI in question; profits of the company declining since 2016 was a public information; appellants sold the shares in order to infuse funds to the company as a final effort in reviving its falling fortunes due to adverse market conditions; full information relating to the sale proceeds from shares and transfer of funds to the accounts of the company soon thereafter etc. are matters of record; in fact more funds have been transferred to the company than the sale proceeds and, therefore, there has been no diversion of funds in any manner whatsoever and, therefore, the appellants were trying to help the company to remain within business. It was submitted that since the revival efforts did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nformation relating to adverse profitability of the company and, therefore, trading while in possession of UPSI. Moreover, the appellants have violated code of conduct for insider since it is an admitted fact that they did not pre-clear the trades. There is investigation by multiple agencies in the matter. Therefore, given the fact that the Company has gone under liquidation and there are only a few shares left with appellant no. 1 it was imperative for SEBI to secure the amount of loss averted by the appellants by trading as insiders while in possession of UPSI. Therefore, the learned counsel submitted that if the appellants cooperate and provide all the relevant information a final order will be passed at the earliest possible time and this Tribunal may not interfere with the impugned order. In any case, it was urged that the interest of the investors need to be protected. 8. Having heard the learned counsel for the parties at reasonable length, we proceed to dispose of the appeal at the stage of admission itself without calling for reply/rejoinder etc. as this matter is squarely covered by our orders in Abhijit Rajan's case (supra) and Dr. Udayant Malhoutra's case (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed at the time of initiation of the proceedings. Further, no order of the like nature can be passed without recording its satisfaction and cannot be based on the basis of possibility. 10. In this regard, we may refer to the provisions of Order 38 Rule 5 to 13 of the Code of Civil Procedure, 1908 which lays down the parameters for attachment before judgment. The said principles are fully applicable in the instant case. The object of attachment before judgment is to prevent any attempt on the part of the appellant to defeat the realization of the final order on disgorgement that may be passed against the appellant. But this principle applies only when it is found that the appellant is about to dispose of the property in question. Further, this principle can only be applied when there is evidence to show that the appellant has acted, or is about to act with the intent to obstruct or delay the adjudication of the proceedings that may be passed against him. We are of the opinion that there is no finding that the appellant will remove the property or will dispose of all the property or that he would obstruct the proceedings or that he would delay the proceedings pursuant to the show c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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