9911796707
TMI Blog2021 (4) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... - penalty on directors - HELD THAT:- As appellant Mr. Govind Das, Mr. Bharat Kumar and Mr. Avichal were admittedly independent non executive directors. The resolution itself would show that they did not participate in the issue of GDR proceeds at any point of time after passing of the resolution. All the necessary followup was to be carried by the Managing Director. No case of adverse inference that they should have taken efforts to bring back GDR proceeds was made out against them in any of the impugned order as argued before us and, therefore, they could not have been penalised or restrained as detailed supra. Appellant Mrs. Jyoti Bankda is concerned, admittedly on the very day of the passing of the resolution she had resigned from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent : Mr. Kumar Desai, Advocate with Mr. Mihir Mody and Mr. Arnav Misra, Advocates i/b. K. Ashar Co. ORDER PER: JUSTICE M.T. JOSHI, JUDICIAL MEMBER 1. For the reasons stated in the applications, the delay in filing the appeals is condoned. Misc. application nos. 586, 662 and 663 of 2019 are allowed. 2. Aggrieved by the two separate orders of the learned Whole Time Member ( WTN for short) of the respondent Securities and Exchange Board of India (hereinafter referred to as SEBI ) dated 15th January, 2019 and the learned Adjudicating Officer s ( AO for short) order dated 30th August, 2019 in the same set of facts the present appeals are filed by the common appellants and, therefore, the appeals are being decided by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Vintage was secured by the appellant Company itself by pledging the entire GDR proceeds with the same EURAM Bank by executing account charge agreement. Thus, the proceeds were not utilised for the objective of the GDR but merely a show was made that the GDRs issued by the Company were subscribed immediately upon its listing. The GDRs were later converted into equity shares and those shares were sold in Indian securities market. The cancellation of GDR started from February, 2011 and continued till January, 2016 by which time all the GDRs were converted into shares. 6. During the said period appellant Mr. Ajay Bankda was the Managing Director, appellant Mrs. Jyoti Bankda his wife as well as appellant Mr. Jagdish Bagaria, were the Whol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Bank and to carry and affix, Common Seal of the Company thereon, if and when so required. Resolution also states that: ...... RESOLVED FURTHER THAT Mr. Ajay S Bankda, Managing Directors of the Company, be and is hereby authorised to draw cheques and other documents, and to give instructions from time to time as may be necessary to the said Euram Bank or any of branch of Euram Bank, including the Offshore Branch, for the purpose of operation of and dealing with the said bank account and carry out other relevant and necessary transactions and generally to take all such steps and to do all such things as may be required from time to time on behalf of the Company RESOLVED FURTHER THAT the Bank be and is hereby authorised to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he had infact signed the account charge agreement by religiously following the directions of the Lead Manager to the issue, namely, Prospect Capital Ltd. He was not aware of any of the niceties of the GDR and, therefore, as he himself was deceived by the Lead Manager in entering into the agreement he also could not have been charged by the respondent SEBI. 13. On the other hand, learned counsel for the respondent SEBI submitted that all the present appellants were parties to the resolution. They did not take any action when the GDR proceeds did not reach the coffers of the Company later on. They remained silent throughout the period which would show that all of them are guilty. 14. Post hearing the learned counsels for the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EURAM Bank on the strength of the resolution. Therefore, she also could not have been penalised or restrained by the respondent SEBI. 17. So far as appellant Mr. Ajay Bankda the then Managing Director of the Company, the Company itself and appellant Mr. Jagdish Bagaria, the Whole Time Director are concerned, they cannot escape the liability. The Company would be liable for the acts of the Managing Director. So also the Managing Director is also liable for any default committed by the Company. Appellant Mr. Jagdish Bagaria was the Whole Time Directors and, therefore, he cannot plead that he was not aware of the day to day affair of the Company which included non return of GDR proceeds to the Company. Their involvement in the fraudulent a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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