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TMI Blog2021 (8) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... tlement applications. This Court concludes that no relief can be granted to the petitioner for revival of the settlement applications and the petitioner has to move afresh application if so chooses in terms of Regulation 7 of the Settlement Regulations, 2018. If such afresh application for settlement is moved, it shall be placed before the High Powered Advisory Committee as provided under Regulation 7 of the Settlement Regulations, 2018 and a decision shall be taken at the earliest. However, taking into consideration that the orders have already been passed under Section 11B of the SEBI Act, 1992, there can be no precondition of depositing the amount of 50% over the settlement amount. The said condition would only operate after the settlement is arrived at and determined by the concerned Committee. Similarly, in relation to settlement of penalty also, the aforementioned observations will equally apply. - S.B. Civil Writ Petition No. 12422/2019 - - - Dated:- 7-4-2021 - Hon'ble Mr. Justice Sanjeev Prakash Sharma For the Petitioner(s) : Mr. Rajendra Prasad, Senior Adv. with Mr. Sandeep Taneja, Adv. Mr. Kartiky Sharma, Adv. For the Respondent(s) : Mr. Shyam Anil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part issued a show cause notice under Section 11B of the SEBI Act, 1992 as it found that the issue alleged to have subscribed by 8 subscribers was false while the entire subscription came from only one entity namely; Vintage. The Vintage on its part took loan of USD 25 Million from Euram Bank, Dubai where the petitioner had an account and had deposited the GDR subscription. Thus, the GDR subscription was actually made from the same loan taken from the same Bank and deposited in the same Bank. A tripartite agreement was also entered between Vintage, Euram Bank and the petitioner; and the GDR proceeds were pledged to secure the loan. The pledge agreement was also suppressed by the petitioner. The investigation also revealed that the Vintage repaid the loan installments on the same day or later money was transferred from petitioners' Euram Bank to its UAE subsidiary's Bank account during the period when the loan was repaid i.e. 29/10/2010 to 17/03/2011 and thus fraud was committed within the meaning of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (for short, 'the Regulations of 2003'). 5. The SEBI also issued another show cause notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and penalty was also imposed. The petitioner-company later on came to know that in similar matters of similar nature relating to identical allegations, two companies were allowed to enter into settlement and penalty was imposed on them and the matter was dropped vide orders dated 05/04/2019 and 16/05/2019 respectively. Learned Senior Counsel brought attention of this Court to the aforesaid orders passed in the case of two companies namely; HFCL and KEI and submitted that upon realizing the aforesaid, the petitioner-company have approached this Court to submit that right of settlement of the petitioner-company has been taken away discriminately, unreasonably and arbitrarily by the respondents by laying down an irrelevant and impossible condition of bringing the amount in India. It is submitted that the action of the respondents amounts to coercion and any action under coercion cannot be said to be with free will. The withdrawal of settlement applications was under duress of an illegal condition. It is, therefore, prayed that such condition be declared illegal, arbitrary and the settlement applications be examined on merits without insisting on the condition of bringing the GDR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken this Court to the language used by the Lawyers intimating the SEBI of their intention to withdraw their settlement applications. He submitted that as on today, there is no settlement application pending on record as the prayer for withdrawal of the settlement applications was decided in favour of the petitioner by the Board. The petitioner, therefore, cannot turn around now after having participated in the regular proceedings relating to the show cause notices and seek revival of their settlement applications. Learned Senior Counsel has also taken this Court to Regulation 7 of the SEBI Settlement Regulations to submit that once the settlement application is withdrawn, ordinarily the same cannot be allowed to be made again before the authorities. However, if such an application is moved, the concerned High Powered Advisory Committee may recommend for allowing application for settlement subject to increase of at least 50% over the settlement amount determined in accordance with Schedule 2 of the SEBI Settlement Regulations. He, therefore, submitted that if the petitioner-company wants, they may move a second application for settlement which would be examined by the High Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise a portion of advance money in the form of other assets and/or licenses/any other form. 5. In the light of the above, the Applicants once again request that their application for settlement of the proceedings may be considered without insisting on immediate repatriation of the GDR proceeds to the Company or into India. 11. On 25/01/2019, the petitioner conveyed through their Advocates as under:- Joby Mathew Associates Advocates Date: 25/01/2019 The Assistant General Manager Settlement Division Enforcement Department-2 Securities and Exchange Board of India, SEBI Bhavan, C-4A, G Block, BandraKurla Complex, Bandra (E), Mumbai 400 051 Sir, Kind attention: Mr. Pradeep Kumar, Assistant General Manager. Ref: Hearing before the Internal Committee in the Settlement Application in the matter of Aksh Optifibre Ltd. We address you on behalf of and at the instructions of Aksh Optifibre Ltd ( Company ); Dr. Kailash S Choudhari, Mr. P.F. Sundesha, Mr. B.R. Rakhecha, Mr. Narendra Kambhat and Mr. Arun Sood (collectively referred to as our Clients ). a) It is submitted that our clients were afforded a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice, penalties proposed were also imposed. 14. This Court has been informed that the aforesaid orders have been challenged in appeal before the concerned appellate authority and as there is no interim order, security amount has been deposited subject to the appeal by the petitioner-company. 15. Learned counsel for the petitioner has relied on the orders passed in the case of two companies namely; HFCL and KEI where settlement orders were passed on the settlement applications. The allegations against both the Companies were almost identical except to the extent that while in the case of the petitioner-company, the amount secured through GDRs was invested in Africa from where the petitioner-Company is unable to get the amount refunded, the aforesaid two companies HFCL and KEI had got the amount transferred to India itself in the Company after issuing of the GDRs. 16. Keeping in view the aforesaid, this Court finds that the petitioner-Company of its own will and as per the decision taken by it at the relevant time, withdrew its settlement applications without any demur. If the petitioner-Company had a grievance relating to the conditions laid down by the Int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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