N KHEMANI & CO Vs. SECURITIES AND EXCHANGE BOARD OF INDIA AND SHRI G N BAJPAI CHAIRMAN SECURITIES AND EXCHANGE BOARD OF INDIA
SECURITIES APPELLATE TRIBUNAL
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(1.) THE Appellants in both the appeals are members of the Calcutta Stock Exchange. THE Respondents have initiated investigation against the Appellants. Separate show cause notices were issued. It has been stated that during the course of investigation, the Respondents prima facie found several lapses and violations by the Appellants. Based on the response to the notices from the Appellants, the Respondents viewed that some preventive action is urgently required to be taken against the Appellants in order to ensure that the investors in the securities market do not in any way suffer any loss and are not put to any harm and that the safety and integrity of the market remain unimpaired, that such preventive action is necessary in order to prevent the Appellants from dealing in the securities market pending completion of the investigation. According to the Respondents, in view of the emergent situation, it was felt necessary to ensure that no further harm or detriment is caused to the market and that investors' confidence is restored. THE Respondents, based on the said perception, debarred the Appellants from "associating with the securities market activities and dealing in securities market till the completion of investigation." Both the orders are dated 21.1.2003. THE Appellants claiming to be aggrieved by the said orders preferred the present appeals, inter alia praying to quash and set aside the show cause notices issued by the Respondents. THEy have also prayed for interim order staying the operation of the impugned orders and restraining the 2nd Respondent from taking any action in pursuance of the said orders.
(2.) The Appellants' prayer for interim order was taken up for consideration today. It is noticed that though the Respondents have issued two separate orders the direction issued is identical. Both the orders are interim orders operative till the completion of the investigation. In view of the substantive similarity of the directions issued by the Respondents, as well as the background of the orders, it was decided, with the consent of the counsel for the parties, to hear and dispose of the matters by a common order.
Shri Shyam Diwan learned Counsel appearing for the Appellants submitted that he is now moulding the main prayer in the appeal seeking an order from the Tribunal to the Respondents directing them to complete the investigation within a time frame, as otherwise the Appellants would continue to remain debarred from doing their stock broking business indefinitely, till the investigations are completed. In response to the Respondents' contention that they are not in a position to serve the notices relating to the subject investigation on the Appellants and as a result the proceedings are delayed, Shri Diwan submitted that the offices of the Appellants have been sealed by the authorities and there is no one available at those premises. He furnished the present address to the Tribunal and the Respondents for the purpose of correspondence relating to the subject investigation. He submitted that with a direction to the Respondent to dispose of the appeals expeditiously, the present appeals may be disposed of.
(3.) SHRI Kumar Desai learned Counsel appearing for the Respondents submitted that the Respondents are not intentionally delaying the investigation, that they are not in a position to reach the Appellants, as the notices/summons issued to them at the addresses available on record are returned unserved. He submitted that the Respondents are also keen to complete the investigation as early as possible and for the purpose the Appellants' co-operation is also required, that there are practical difficulties in completing investigation in a rigid time frame. He submitted that the Respondents would not delay completition of the investigation provided the Appellants co-operate in the matter.;
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