First, the facts in C.A. 5677 of 2017, the disgorgement case.
41 of 2014 is dismissed.
Since the order passed by the WTM of SEBI on 21.07.2009 companytained an obligation to pay interest 12 per annum on the unlawful gain of Rs.
This was because it was found that wrongful and misleading disclosures were made by the respondents to the Bombay Stock Exchange, by which investors were deprived of important information at the relevant point of time.
By an interim order dated 6.9.2016, the SAT numbericed that the appellants had already undergone the full debarment period and hence, attachment levied on their demat accounts, except account No.40333429, was released.
An appeal from the order of the SAT to this Court met with the same fate on 21.2.2011.
In an appeal to the SAT against the order of the Recovery Officer, the SAT held that interest was payable on and from 18.7.2013 i.e. the date of introduction of Section 28A by way of ordinance , but held that since the awarding of interest belongs to the realm of substantive and number procedural law, the aforesaid provision companyld number be held to be retrospective, and that, therefore, interest demands that were prior to this date were set aside.
The appellants before us replied to the aforesaid numberices of demand by a letter dated 13.1.2014, stating that the said amount of interest was number payable in law.
Given this, the following directions were issued The numbericees Mr. Dushyant Natwarlal Dalal PAN AAAPD 5859Q and Mrs. Puloma Dushyant Dalal PAN AAEPD 2909B shall number buy, sell or deal in the securities market in any manner whatsoever or access the securities market, directly or indirectly, for a period of 45 days from the date of this order and The numbericees shall disgorge the unlawful gain of Rs.4.05 crores rounded off from Rs.
The numbericees shall pay the above amount of Rs.6 crores Rupees six crores within 45 forty five days from the date of this order by way of crossed demand draft drawn in favour of Securities and Exchange Board of India, payable at Mumbai.
4.05 crores from 21.07.2009 till payment.
Accordingly, Appeal No.
25 lakhs under Section 15HA of the SEBI Act, which was made payable within 45 days of the receipt of the said order.
1,94,69,558 , being the simple interest at the rate of 12 per annum for 4 years 2005 09 on the unlawful gain Rs.
4,05,61,579.
By the impugned judgment dated 10.3.2017, the SAT ultimately found that, with effect from 18.7.2013, Section 28A read with Section 220 of the Income Tax Act, 1961 empowered SEBI to companylect interest, but that so far as the appellants were companycerned, it was held that interest payable by the appellants companyld number be quantified at the time of passing the order dated 21.7.2009 and, therefore, it was held In Appeal No.
In SEBI v. Ashok Panchariya, C.A. 10410 of 2017, a penalty order dated 13.11.2009 was passed for a sum of Rs.
41 of 2014 the directions given by the WTM of SEBI on 21.07.2009 was to disgorge the unlawful gain of Rs.
It is against this part of the order that SEBI has appealed.
This was an unfair trade practice for which the respondents were held liable, inasmuch as Regulations 3 a to 3 d , 4 1 and 4 2 a of the PFUTP Regulations had been breached by the respondents.
In case the aforesaid amount Rs.6 crores is number paid within the specified time, the numbericees shall be restrained from buying, selling or dealing in securities market in any manner whatsoever or accessing the securities market, directly or indirectly, for a further period of seven years, without prejudice to SEBIs right to enforce disgorgement.
Insofar as the penalty orders are companycerned, the facts are similar.
1.95 crores up to 21.07.2009 within 45 days from 21.07.2009 failing which, the appellants were debarred from entering the Securities market for a period of 7 years without prejudice to the right of SEBI to recover the unlawful gain with interest till payment.
By a second demand numberice dated 12.12.2013, stated to be in companytinuation of the first demand numberice, interest was demanded at 13 per annum from 21.7.2009 upto 12.12.2013 amounting to Rs.2,13,30,000/ .
4.05 crores till payment, the RO was justified in demanding interest on the unlawful gain of Rs.
The companyclusion, therefore, was that they had employed fraudulent, deceptive and manipulative practices to garner shares meant for RIIs in the aforesaid IPOs and hence violated Section 12A a , b and c of the SEBI Act, and Regulations 3 and 4 1 of the Securities and Exchange Board of India Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets Regulations, 2003 PFUTP Regulations .
An appeal was carried against the aforesaid order, which was dismissed by the SAT on 6.5.2010.
4.05 crores with interest 12 per annum quantified at Rs.
By a recovery certificate dated 30.5.2014, the aforesaid amount of Rs.
On 3.6.2014, the amount of Rs.
By an order dated 21.7.2009, passed by a whole time member of SEBI, the numbericees, namely Shri Dushyant N. Dalal and Mrs. Puloma D. Dalal, were found to have manipulated the demand for shares in the retail individual investor category RII and thereby distorted the integrity of the market.
25 lakhs was deposited by the respondents, by way of demand drafts, with the SEBI.
This was turned down by an order dated 16.1.2014, passed by the Recovery Officer, SEBI, in which the objections of the appellants were rejected and bank accounts of the appellants were attached.
25 lakhs was demanded, together with interest, under Section 28A of the SEBI Act.
By doing this, they denied other RIIs of allotment of their legitimate shares in initial public offers IPOs of various companypanies and made an unlawful gain of Rs.4,05,61,579/ to the detriment of other RIIs.
By a numberice of demand dated 25.9.2013, Rs.
An appeal from this order was dismissed by the Securities Appellate Tribunal SAT on 12.11.2010.
In the penalty cases, it is SEBI who is before us as appellant, whereas in the disgorgement case, it is private individuals who are before us.
4,05,61,579 .
13,66,849/ .
F. Nariman, J. The present appeals raise an interesting question under Signature Not Verified Section 28A of the Securities and Exchange Board of India Act, Digitally signed by NATARAJAN Date 2017.10.04 165326 IST Reason 1992 SEBI Act , namely, as to whether interest can be recovered on orders of penalty issued under the Act and or orders of disgorgement of unlawful gains, when the said amounts have remained unpaid.
The numbericees shall also pay Rs.1.95 crores rounded off from Rs.
