BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI

 Appeal No. 173 of 2012 

 Date of decision: 29.08.2012   

1. Alfa Fiscal Services Private Limited
   a company registered under the Companies
   Act, 1956 and having its registered office
   at 437, Start Chamber, Harihar Chowk,
   Rajkot – 360 001.
2. Hardik Bagadia
   Director of Appellant No.1, having his
   address at 437, Start Chamber, Harihar Chowk,
   Rajkot – 360 001.
3. Bhavesh Sheth
   Director of Appellant No.1, having his
   address at 437, Start Chamber, Harihar Chowk,
   Rajkot – 360 001. … 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. D. J. Khambatta, Senior Counsel along with Mr. Ravi Hegde and Mr. Paras Parekh,
   Advocate for Appellants.
   Mr. Shiraz Rustomjee, Senior Advocate along with Mr. Mihir Mody and Mr. Mobin
   Shaikh, Advocates for the Respondent.
   Coram : P. K. Malhotra, Member & Presiding Officer ( Offg .)
   S.S.N. Moorthy, Member
   Per : P. K. Malhotra (Oral) PG Electroplast Limited, a company regi stered under the Companies Act, 1956
   came out with an initial public offer (IPO) in September, 2011. The scrip of the
   company was listed on the National Stock Ex change of India Limited and Bombay
   Stock Exchange on September 26, 2011. 2
4. Securities and Exchange Board of Indi a carried out investigations into the
   alleged irregularities in the IPO and tradi ng of the scrip of the company. During the
   course of investigations, the Board prim a facie came to the conclusion that the
   appellants, which is an investment company and carrying on the business of dealing in
   securities, and its directors have traded in the scrip of the company and it placed buy
   order at a price higher than the available sell order price in the system with the intention
   to increase the price of the scrip. Pending further investig ations, the Board passed an
   ex-parte ad-interim order on December 28, 201 1 against various entities including the
   appellants. By the impugned order, the appe llants were prohibited from buying, selling
   or dealing in the securities market in any ma nner, whatsoever, till further directions.
   The said ex-parte ad-interim order is also a show-cause notice to the concerned entities,
   including the appellants, asking them to file objection, if any, against the said order.
5. The grievance of the appellants is that they filed their reply to the said show-
   cause notice on January 16, 2012 denying the allegations. They also attended a
   personal hearing on May 3, 2012 and sent anot her letter dated July 24, 2012 requesting
   the Board to vacate the said ex-parte ad-i nterim order. However, the Board has not
   taken any action so far and under the said ex-p arte ad-interim order, the appellants are
   being denied the right to trade in the market . According to the appellants, they have
   amply demonstrated that there is no merit in the allegations and th e directions against
   the appellants are not required and the res pondent’s action of not having passed a final
   order pursuant to the submissions of the appellants despite lapse of more than 7 months,
   is a major irregularity on the part of th e respondent and call for impugned order to be
   set aside.
6. Shri Darius Khambatta, learned senior counsel appearing for appellants, has
   further drawn our attention to the le tter dated March 14, 2012 addressed by Mr.
   Bhavesh N. Sheth, director of the appellant company and one of the appellants in the
   appeal where a request has been made to th e Board that he may be allowed to operate 3
   his demat account purely on ad-interim basis to enable him to pay off his liabilities on
   which no action has been taken by the Board so far.
7. Shri Shiraz Rustomjee, Senior Counsel for the respondent Board submitted
   before us that there are 100 parties involved in the investigation a nd the Board is still
   looking into the matter. However, in so fa r as the appellants are concerned, the Board
   will pass final order within a period of two weeks. Therefore, interference by the
   Tribunal is not called for at this stage.
8. After hearing learned counsel for the parties, we are of the considered view that
   the matter is still at the investigation stage and it does not call for any interference by us
   at this stage. In so far as the appellants are concerned, since they have already filed
   their reply and a personal hearing was also granted wa y back on May 3, 2012, we see
   no reason why the Board cannot pass a final or der after considering the reply filed by
   the appellants.
   We dispose of the appeal with a direc tion to the Board to pass a final order qua
   the appellants within two week s from today. While doing so, the prayer made by
   Mr. Bhavesh N. Sheth in his letter date d March 14, 2012 may also be considered. In
   case the Board is not able to pass appropriate order within the stipulated time, the ex-
   parte ad-interim order qua the appellants shal l stand vacated. We make it clear that we
   are not expressing any opinion on the merits of the case.
   The appeal stands disposed of with above directions. Sd/- P. K. Malhotra Member & Presiding Officer ( Offg.) Sd/- S.S.N. Moorthy Member 29.8.2012
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