BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Order Reserved on: 18.11.2019 Date of Decision: 25.11.2019 Appeal No.72 of 2018 Ind Finance & Securities Trust Pvt. Limited One BKC, 1516 C Wing, Bandra Kurla Complex, Mumbai – 400051. ….. Appellant Versus Securities & Exchange Board of India Plot No.C4-A, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai 400051. …… Respondent Mr. Vinay Chauhan, Advocate with Mr. K.C. Jacob, Advocates i/b. Corporate Law Chambers India for the Appellant. Mr. Pradeep Sancheti, Senior Advocate with Mr. Abhiraj Arora and Mr. Vivek Shah, Advocates i/b. ELP for the Respondent. CORAM: Dr. C.K.G. Nair, Member Justice M.T. Joshi, Judicial Member Per : Justice M.T. Joshi

1. Aggrieved by the decision of the respondent Securities

and Exchange Board of India (hereinafter referred to as ‘SEBI’) dated 23rd January, 2018 disposing of the complaint filed by the appellant the present appeal is preferred.

2. The appellant’s case in short is as under:-

That one Brescon Advisory Ltd. has acquired 1500 shares of Eicher Motor Limited (hereinafter referred to as ‘Eicher’) on 8th December, 1995. Later on Brescon Advisory Ltd. was changed to Brescon Consultants Private Limited. Later on however it was amalgamated with the present appellant in the year 2016 vide the order of the Bombay High Court dated 26th February, 2016. Thus, the appellant became the holder of the 1500 shares of Eicher. In January, 2016 the appellant found that shares were misplaced and, therefore, it made enquiry with Registrar and Transfer Agent of Eicher i.e. Link Intime Pvt. Ltd. (hereinafter called as ‘Link Intime’). The Link Intime was requested to issue duplicate shares. After much persuasion vide letter dated 28th June, 2016 and 5th August, 2016 Link Intime informed the appellant that 600 shares were transferred by Brescon to the appellant which were subsequently sold by the appellant in the year 2007. However, as regards the remaining 900 shares, Link Intime informed that in the year 2012 duplicate shares were issued in favour of Mr. Sharad Negandhi. Said Mr. Negandhi had dematerialized those shares. The newspaper advertisement and pan card of Mr. Negandhi was also submitted for the purpose of issuance of duplicate share certificate. In the circumstances, the appellant filed complaint with Kherwadi police station, Mumbai. The police investigation revealed that beneficiary account of Negandhi was closed and he had transferred the shares of Eicher to one Mr. Vimal R. Kapadia. Thus, the shares were fraudulently transferred to Mr. Negandhi by Link Intime without proper verification as required by rules and regulations. In the meantime, the appellant found the original share certificates which were misplaced.

3. In the meantime, the appellant found that similar fraud

was prepatrated against several other investors with the help of officials of Link Intime. One Mr. Manoj Dharamdas Shah had complained to SEBI wherein the order was passed by SEBI on 27th October, 2016 thereby directing Eicher to immediately reinstate the shares to the complainant therein. In view of this fact the appellant registered a complaint (hereinafter referred to as ‘first complaint’) on the SCORES platform on 29th November, 2016. After much persuasion, respondent SEBI on 31st May, 2016 reported to the appellant that the said complaint has been closed. The reason that was forwarded by SEBI was that the orders in the cases of Manoj D. Shah and Another and Ms. Adesh Kaur passed by SEBI were challenged before this Tribunal. Vide order dated 7th February, 2017 the orders were set aside and SEBI was directed to pass fresh order. Thereupon Ms. Adesh has approached National Company Law Tribunal, New Delhi (hereinafter referred to as ‘NCLT’) by filing complaint for rectification of the register of company. NCLT had directed for rectification of the register of the company qua the shares of Ms. Adesh Kaur. In such circumstances, SEBI reasoned that the matter was being looked after by Mumbai police, order passed by it was set aside by this Tribunal and necessary direction could only be given by an order of NCLT to be passed under Section 59 of the Companies Act, 1956.

4. Thereafter, second complaint was filed by the

appellant on 16th June, 2017 with the SEBI for the same grievance with a request to act by exercising the powers under the SEBI Act. SEBI vide letter dated 31st May, 2017 reiterated the reasons already forwarded to the appellant advising it that it may also approach NCLT in this regard. Subsequently, the order of NCLT was set aside by National Company Law Appellate Tribunal (hereinafter referred to as ‘NCLAT’) vide order dated 29th August, 2017 and, therefore, the appellant filed third complaint with SEBI dated 20th December, 2017 requesting SEBI to conduct investigation and to issue direction in which impugned communication referring to the earlier decisions was passed. Hence the present appeal.

5. During the pendency of the appeal, the order of

NCLAT in case of Ms. Adesh Kaur was challenged before the Supreme Court of India. Vide decision dated 3rd July, 2018 the Supreme Court had set aside the order of the NCLAT and the order of NCLT directing for rectification of the register of company of Eicher was restored.

6. Heard Mr. Vinay Chauhan, learned counsel for the

appellant and Mr. Pradeep Sancheti, learned Senior counsel for the respondent.

7. Mr. Vinay Chauhan, the learned counsel submitted

that the order of SEBI dated 31st May, 2017 disposing of the first complaint of the appellant is wrong. SEBI is very well empowered to conduct the investigation in the misconduct committed by Link Intime i.e. Registrar and Transfer Agent of Eicher approved by SEBI. He submitted that the order of NCLT would also show that NCLT found it fit that SEBI’s assistance on the contemplated action at SEBI’s end would be necessary. He submits that the present case as well as the other cases detailed supra would show that Link Intime has committed misconduct and the SEBI can very well issue directions to the said Registrar and Transfer Agent which is approved by SEBI according to the rules and regulations.

8. On the other hand, learned Senior counsel for the

respondent Shri Pradeep Sancheti submits that as per the own contention of the appellant, his first complaint was disposed of by SEBI long back on 31st May, 2017. Thereafter the appellant went on to file second and third complaint on the same grounds with SEBI. While the last of the order is impugned in this appeal, the appellant is commenting on the reasoning recorded by SEBI in its order dated 31st May, 2017 passed in first complaint. He therefore submits that the appeal itself is not maintainable. He further submitted that in the case of Ms. Adesh Kaur NCLT has issued directions for rectification of the register under section 111A of the Companies Act, 1956 and, therefore, he submits that on these two grounds the appeal is liable to be rejected.

9. Upon hearing both the sides in our view the appeal

cannot be allowed. It is to be noted that the appellant had raised a grievance with SEBI vide complaint dated 29th November, 2016. The said complaint was disposed of by SEBI on 31st May, 2017. Instead of challenging the said order the appellant filed second compliant on the same ground on 16th June, 2017. The same was also dismissed. Still the appellant filed third complaint on 20th December, 2017 and as the same was rejected by referring the earlier two orders vide communication dated 23rd January, 2018 the same is challenged before the Tribunal.

10. In the circumstances without going into the merits of

the case the appeal is liable to be dismissed as the appellant could not have raised the same issue vide complaints after complaints before SEBI and then thought it fit to challenge the last of the communication. If the appellant was aggrieved by the speaking order of the SEBI dated 31st May, 2017, it could have very well filed appeal before this Tribunal at that point of time.

11. The history of the case of Ms. Adesh Kaur would

show that NCLT is competent to issue direction for rectification of the register of Eicher under section 111A of the Companies Act.

12. In the circumstances, the following order:

The appeal is hereby dismissed. The appellant is at liberty to take such recourse in any other forum as provided by law. Sd/- Dr. C. K. G. Nair Member Sd/- Justice M.T. Joshi Judicial Member 25.11.2019 Prepared and compared by RHN