IN THE SECURITIES APPELLATE TRIBUNAL

MUMBAI

 

 Appeal No. 119/2004

 

Date of Hearing	22.11.2005
Date of Decision	22.11.2005

 

In the matter of:

 

Suresh Kabra	Appellant – Represented by
	Mr. P.N. Ganwani, Advocate
Versus
Securities & Exchange Board	Respondent –Represented by
of India	Mr. Kumar Desai, Advocate

 

Coram:

            Justice Kumar Rajaratnam, Presiding Officer

            C. Bhattacharya, Member

           

 

Per:  Justice Kumar Rajaratnam, Presiding Officer

 

 

   1.            Appeal is taken up with consent of parties.

   2.            The appellant is a broker challenging the order passed by SEBI against another broker by name Trusted Shares and Investment Ltd. (TSIL) who has been given a “warning” under the provisions of the SEBI Act read with the Regulations [SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 and the code of conduct specified in Schedule II]. 

   3.            The appellant who has certain grievances against TSIL has filed this appeal seeking enhancement of the punishment given to TSIL.

   4.            SEBI received a letter dated March 26, 1997 from Mr. Suresh Kabra and Dilip Kabra addressed to the BSE with a copy endorsed to SEBI. In the said letter it was alleged that the appellant have delivered 5,00,000 shares of M/s Rhutu Bearings Ltd. against sale, however, the TSIL was avoiding payment of the sale proceeds of the said shares. The complaint was forwarded to the BSE vide SEBI letter dated SMD/BR/1409/785/97 dated April 09, 1997. BSE was also advised to examine the matter and take appropriate steps to redress the grievance of the appellant. The BSE vide letter dated January 10, 1998 informed that the matter was examined by their Investor Grievance Redressal Committee on October 03, 1997 and that the said Committee was of the opinion that the matter was under dispute therefore, advised the complainants should be advised to refer the matter for arbitration under the Rules, Bye-Laws and Regulations of the Exchange. Thereafter, BSE advised the complainants vide its letter dated December 19, 1997 to file arbitration in the matter.

   5.            SEBI letter dated January 20, TSIL was advised to redress the grievances of the appellant. TSIL vide its letter dated February 2, 1998, denied that the shares were delivered to it and that the transaction was done through or by it. It also submitted that the matter had been disposed of by the Investor Grievance Redressal Committee of BSE by an award. BSE vide its letter dated February 14, 1998 addressed to the appellant with a copy endorsed to SEBI informed that appropriate steps were taken to redress the complaint of the appellant in view of the decision taken by the Investor Redressal Committee, wherein the committee found that both the parties materially differed with regard to facts of the case. The appellant was advised by the committee, if he considered necessary to go in for arbitration. BSE, in the said letter further stated that even though it had not submitted any copy of the contract for the alleged transaction despite repeatedly being pointed out by the Investor Grievance Redressal Committee, the Investor Service Cell has gone through the records of the broker and also of the Stock Exchange but found no transactions having been put through  the stock exchange. By SEBI’s letter dated March 9, 1998, BSE was advised to have the arbitration proceedings completed at the earliest, if the appellant chose to file arbitration. The BSE was further advised to look into the role of the TSIL  in affixing the broker stamps on the reverse of the transfer deeds, raising bill, filing arbitration etc.

   6.            A joint meeting of the appellant and the broker was called at SEBI office on February 26, 1998. After hearing the parties on both sides, and in view of the above different versions, it was considered to conduct an enquiry against the said broker into the contravention if any of Rule 4 (b)and Rule 4 (e) of SEBI(Stock Brokers and Sub Brokers) Rules, and Code of Conduct as specified in Schedule II read with Regulation 7 of the said Regulations and Bye Laws 356 (ii), 356((iii), 356(x), 357(iii) and 357(v) of the BSE by the said broker in pursuance of the complaint filed by the complainants. Accordingly vide order dated April 17, 1998, an enquiry officer was appointed to conduct an enquiry into the contraventions, if any of the above provisions by the said broker, namely TSIL.  

   7.            The Enquiry Officer, after hearing both parties, recorded a finding that it was not the job of SEBI to go into rival claims of the appellant and TSIL but, however, held that TSIL had violated the code of conduct and recommended suspension of the registration of TISL as a broker for a period of two months.  SEBI, by its order dated 25.2.2000, considered the entire matter and taking into account the facts and circumstances of the case, accepted the finding of the enquiry officer with respect to the violation of code of conduct but reduced the penalty to that of a warning.  It also directed TSIL to be careful in future. 

   8.            The appellant is a stranger to this lis.  He is only a complainant with respect to some controversy over money matter between himself and TSIL and has filed this appeal against the order of SEBI for enhancement of the punishment.

   9.            On a careful reading of the records and after hearing appellant and the respondent, it is clear that the appellant has chosen to use this forum to try and settle scores against TSIL with regard to financial transactions.  It is purely a private litigation.  The appellant has approached unsuccessfully other forums and certainly an appeal for enhancement of punishment by another broker is not maintainable either on facts or in law.

10.            We have also carefully perused the provisions of SEBI Act and there is no provision for a third party to file an appeal in such circumstances, especially for enhancement of punishment.  In these circumstances, there is no merit in the appeal.

11.            The appeal stands dismissed.

12.            The interim application also stands disposed of accordingly.

13.            No order as to costs.

(Pronounced in Court)

 

 

Place: Mumbai

Date: 22.11.2005

SR/Avm

 

//SR12057