| The Tax Publishers 2022 TaxPub(CL) 2828 (SAT- Mum) : (2022) 173 SCL 0506 SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992
Section 15T
AO imposed penalty upon acquirers, as they acquired shares of target company without making a public announcement, but SEBI was aware of the acquisition and there was an inordinate delay of 13 years in initiation of the proceedings, on the ground of laches, the proceedings could not be sustained and the order was quashed.
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Appeal to the Securities Appellate Tribunal - Appeal against imposition of penalty - Acquirers acquired shares of target company without making a public announcement in violation of Takeover Regulation - Inordinate delay in initiation of proceedings
Adjudicating Officer (AO) found that acquirers acquired 6.97% equity shares of target company without making a public announcement in violation of Takeover Regulation. Therefore, the AO imposed penalty upon the acquirers. The acquirers filed an appeal against the order on the ground that there was an inordinate delay in passing the order. Held: It was found that information of acquisition of the shares was available in public domain. Further, SEBI was also aware of the acquisition. There was an inordinate delay of 13 years in the initiation of the proceedings. Therefore, on the ground of laches, the proceedings initiated against the acquirers for transaction done in 2006-07 could not be sustained. Thus, the order of imposition of penalty was quashed.
REFERRED : Government of India v. Citedal Fine Pharmaceuticals 1989 taxmann.com 618 (SC) : 1989 TaxPub(EX) 719 (SC); Bhavnagar Municipal Corporation v. Palitana Sugar Mills (P.) Ltd. (2004) 12 SCC 670, State of Punjab v. Bhatinda District Coop. Milk (P.) Union Ltd. (2007) 11 SCC 363 and Joint Collector Ranga Reddy District v. D. Narsing Rao (2015) 3 SCC 695
FAVOUR : In favour of appellant
A.Y. :
IN THE SECURITIES APPELLATE TRIBUNAL, MUMBAI BENCH
JUSTICE TARUN AGARWALA, PRESIDING OFFICER M.T. JOSHI, JUDICIAL MEMBER & MEERA SWARUP, TECHNICAL MEMBER
Powerhouse Fitness Ltd. v. SEBI
Appeal No. 426 of 2020
9 June, 2022
Appellant by: Saurabh Bacchawat and Harsh Kesharia, Advocate
Respondent by: Sumit Rai, Advocate, Abhiraj Arora, Anshu Mehta, Shourya Tanay and Harshvardhan Nankani, Advocates
Justice Tarun Agarwala, Presiding Officer
The present appeal has been filed against the Order, dated 31-7-2020 passed by the Adjudicating Officer ('AO' for convenience) of the Securities and Exchange Board of India ('SEBI' for convenience) imposing a penalty of Rs. 51 lakhs upon the appellants for violation of regulation 12, regulation 7 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ('SAST Regulations, 1997' for convenience) and regulations 3 and 29 of the SAST Regulations, 2011 and regulation 13 of the SEBI (Prohibition of Insider Trading) Regulations, 1992 ('PIT Regulations, 1992' for convenience) etc.
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