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TMI Blog2024 (3) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... la Srinivas, learned Senior Counsel representing Mr. C.V. Narasimham, learned counsel for the respondents No. 1 and 2. 2. This intra court appeal is filed against the order dated 19.09.2023 passed in W.P. No. 34761 of 2021. The appellants and the respondents No. 3 to 6 had filed a writ petition, in which the action of the Securities Exchange Board of India (hereinafter referred to as "SEBI") in issuing the impugned certificate under Section 28A of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as "the SEBI Act"), read with Section 222 of the Income Tax Act, 1961, directing the appellants to pay a sum of Rs. 69,33,92,781/- along with interest was challenged. The said writ petition has been dismissed. 3. Facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants are pending and the orders of interim moratorium have been passed. 5. The learned Single Judge, by an order dated 19.09.2023, inter alia, held that the provisions of IBC have an overriding effect over the provisions of the SEBI Act. It was further held that no interim moratorium orders have been passed in favour of the appellants and the proceedings initiated by the appellant No.2 and respondents No. 3 to 5 are still pending. It was further held that only in respect of the appellant No. 1, the interim moratorium order has been passed under Section 96 of IBC. It was held that the penalty imposed and sought to be recovered from the appellants by issuing the impugned certificate fall within the meaning of 'fine', which is excluded un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants has referred to the definition of 'penalty' in P. Ramanatha Aiyar's Advanced Law Lexicon 5th Edition and has placed reliance on the decisions of the Supreme Court in Indo-China Steam Navigation Company Limited v. Jasjit Singh, Additional Collector of Customs, Calcutta 1964 SCC OnLine SC 42 : AIR 1964 SC 1140, Director of Enforcement v. M.C.T.M.Corporation Private Limited (1996) 2 SCC 471, Pratibha Processors v. Union of India (1996) 11 SCC 101, State of U.P v. Sukhpal Singh Bal (2005) 7 SCC 615 and Union of India v. R.Gandhi, President, Madras Bar Association (2010) 11 SCC 1. 7. On the other hand, learned Senior Counsel for the respondents No. 1 and 2 has submitted that there is no moratorium in favour of the appellants and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. 101. Moratorium. - (1) When the application is admitted under section 100, a moratorium shall commence in relation to all the debts and shall cease to have effect at the end of the period of one hundred and eighty days beginning with the date of admission of the application or on the date the Adjudicating Authority passes an order on the repayment plan under section 114, whichever is earlier. (2) During the moratorium period- (a) any pending legal action or proceeding in respect of any debt shall be deemed to have been stayed; (b) the creditors shall not initiate any legal action or lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified in issuing the impugned certificate under Section 28A of the SEBI Act. It is pertinent to note that the provisions of Chapter IV of IBC, namely Sections 121 to 124 do not apply to the facts of the case as the application under Section 122 was not filed when the Certificate under Section 28A of the SEBI Act was issued. The issue whether the impugned levy is a fine or a penalty is also not required to be decided in the facts and circumstances of the case and we keep the same open to be adjudicated in an appropriate proceeding. 11. For the aforementioned reasons, we do not find any grounds to differ with the view taken by the learned Single Judge. 12. In the result, the appeal fails and is hereby dismissed. 13. Miscellaneous applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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