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TMI Blog2021 (12) TMI 1523X X X X Extracts X X X X X X X X Extracts X X X X ..... Advocate with Mr. Mihir Mody, Mr. Arnav Misra and Mr. Mayur Jaisingh, Advocates i/b. K. Ashar & Co. for the Respondent. ORDER Tarun Agarwala, J. (Presiding Officer) 1. The present appeal has been filed against the order dated 30th September, 2019 passed by the Whole Time Member ('WTM' for short) directing the appellants to disgorge an amount of Rs.4,77,91,034 towards wrongful gains alongwith interest at the rate of 12% per annum from 12th March, 2007 till the date of payment and further directing that the interest for the period 30th June, 2016 till the date of the impugned order dated 30th September, 2019 shall be excluded. 2. The facts leading to the filing of the present appeal is, that Securities and Exchange Board of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his order, appeal no.225 and 227 of 2014 was filed which was partly allowed. This Tribunal by its order dated 30th June, 2016 upheld the findings regarding the manipulation of the price in the scrip by the appellants and further recorded that PK has executed manipulative trades in the scrip of the Company with a view to inflate the price of the scrip of the Company with the purpose of enabling the appellants to offload the shares of the Company at inflated prices. The Tribunal further held that the profit or gains made by the appellants on account of fraudulent and manipulative trades were liable to be disgorged. The WTM further found that three price sensitive announcements that was made by the Company and its promoters was not with a view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this appeal. 6. We have heard Mr. Somasekhar Sundaresan, Advocate assisted by Mr. Paras Parekh and Mr. Samyak Pati, Advocates for the appellants and Mr. Fredun DeVitre, Senior Advocate assisted by Mr. Mihir Mody, Mr. Arnav Misra and Mr. Mayur Jaisingh, Advocates for the Respondent. 7. In the impugned order, the WTM has held that the acquisition price as on 3rd October, 2006 would be considered as the purchase price while calculating the unlawful gain which acquisition price comes to Rs.4.33 which was the opening trading price on 3rd October, 2006. The WTM did not agree with the contention of the appellant that the acquisition price should be the price as on 13th December, 2006 on which date PK entered into the trade and/or the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was finally determined by the impugned order dated 30th September, 2019. It was, thus, urged that the interest, if any, can only be payable after the expiry of the stipulated period from the date of the impugned order dated 30th September, 2019 instead from 12th March, 2007. 9. On the other hand, the learned senior counsel Mr. Fredun DeVitre submitted that the order of the WTM does not suffer from any error of law and that the WTM has complied with the directions of this Tribunal in pith and substance though at some places the order of the WTM is not happily worded. 10. Considering the submissions made by the learned counsel we find that the best method for calculating the unlawful gains is the difference between the sale price and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he earlier order of the Tribunal to calculate the acquisition price from the date when PK started selling the shares is wholly misconceived. The Tribunal in paragraph 16 of its order dated 30th June, 2016 had only made an observation and not a direction. 15. The contention that no interest is payable with effect from 12th March, 2007 and that only interest, if any payable after 45 days from the date of the order dated 30th September, 2019 appears to be attractive but said contention cannot be sustained. Reliance by the appellant on a decision of this Tribunal in Dushyant Dalal & Anr. vs. SEBI, appeal no.182 of 2009 dated 12th November, 2010 cannot be considered in view of the decision of the Supreme Court in the case of Dushyant Dalal vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty became due. The Civil Appeals 10410-12 of 2017 are allowed insofar as the penalty cases are concerned." 16. In view of this decision of the Supreme Court (supra) the contention of the appellant cannot be sustained. The other decisions in the matter of CIT Kanpur vs. JK Synthetics Ltd., Income Tax appeal no.243 of 2012 decided on 3rd September, 2015, Mohan Meakin Ltd. v. State of U.P. and Others 2016 (4) AWC 4072 and in the matter of Shailesh Jhaveri v. SEBI, appeal no.79 of 2012 decided on 4th October, 2012 are clearly distinguishable and not applicable in the instant case. 17. For the reasons stated aforesaid the appeal is partly allowed. The WTM is directed to calculate the disgorgement amount taking the acquisition price as Rs.5.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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