BEFORE THE SECURITIES APPELLATE TRIBUNAL

MUMBAI
Date of Decision: 16.12.2014
Appeal No. 184 of 2013

1. Jayesh P. Khandwala HUF

Prop: M/s Zealous Trading Company
12, Shivalik Villa,
Opp. Saundarya Villa,
Rajpath Club-Ambli Road,
Ahmedabad- 380 058
2. Jayesh P. Khandwala
12, Shivalik Villa,
Opp. Saundarya Villa,
Rajpath Club-Ambli Road,
Ahmedabad- 380 058

Appellants

Versus
Securities and Exchange Board of India,
SEBI Bhavan, Plot No. C-4A, G-Block,
Bandra-Kurla Complex, Bandra (East),
Mumbai 400 051

Respondent

Mr. Somasekhar Sundaresan, Advocate with Mr. Paras Parekh,

Advocate i/b J. Sagar Associates for Appellants.
Mr. Shiraz Rustomjee, Sernior Advocate with Mr. Rushin Kapadia,
Advocate i/b K. Ashar & Co. for the Respondent.

CORAM: Justice J.P. Devadhar, Presiding Officer

Jog Singh, Member
A.S. Lamba, Member
Per: Justice J.P. Devadhar (Oral)

1.

This appeal is filed to challenge the order passed by the Whole

Time Member (WTM for short) of Securities and Exchange Board of

India (SEBI for short) on August 12, 2013. On perusal of the said
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order it is seen that the WTM has directed the appellants to disgorge the
unlawful gain with interest as the interest at the rate of 12% per annum
for 8 years (2005-2013) whereas, in the earlier round of litigation, the
same WTM had directed the appellants to disgorge the unlawful gain
with interest at 6% per annum. No reasons are set out in the impugned
order for the increase in the interest rate.

2.

Similarly in the impugned order the WTM has rejected the

contention that Bhanuprasad owned ` 7.43 crore to the appellants on

ground that apart from ledger account, appellants had not produced any
documentary proof in support of above contention. However, it is seen
from the compilation, that apart from ledger appellants had produced
bank statements and contract notes in support of their contention, which
were not taken into consideration in the impugned order.

3.

In view of above infirmities in the impugned order, learned counsel

for SEBI requests that the impugned order be set aside with liberty to the
WTM to pass fresh order on merits after hearing the appellants.

4.

Learned counsel for the appellants while agreeing to the suggestion

made by the counsel for the respondent, requests that the debarment
imposed under para 23(d) of the impugned order may also be lifted as
has been done in the earlier round of litigation.

5.

As per the request made by counsel on both sides, we set aside the

impugned order dated August 12, 2013 and direct the WTM of SEBI to
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pass fresh order on merits and in accordance with law after hearing the
appellants within a period of three months from today. However, in view
of the fact that debarment under para 23(d) of the impugned order has
been in operation upto this date, we direct that till the expiry of three
months from today, the appellants shall continue to be debarred from
accessing the securities market or from buying or selling or dealing in
securities in any manner whatsoever as more particularly set out in para
23(d) of the impugned order.

6.

SEBI is permitted to issue supplementary show cause notice, if

deemed fit in relation to the enhancement of interest rate. Similarly, it

would be open to the appellants to file reply and to adduce additional
documents in support of their contention.

7.

All contentions of both sides are kept open.

8.

Appeal is disposed of in the above terms with no order as to costs.

Sd/Justice J.P. Devadhar

Presiding Officer

Sd/Jog Singh
Member

Sd/A S Lamba
Member
16.12.2014
Prepared & Compared By: PK

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