In the matter of Alfavision Overseas (India) Limited

In the matter of

CORAM

Justice Kumar Rajaratnam, Presiding Officer

Dr. B. Samal, Member

N.L. Lakhanpal, Member

Per: Justice Kumar Rajaratnam, Presiding Officer

1. The appeal is taken up with the consent of parties.
2. The appellant challenges the order passed by the respondent dated 21^st October, 2003. The operative portion of the impugned order reads as under:

"5.1 In view of the above, in exercise of the powers conferred on me under Section 19 of the Securities and Exchange Board of India Act, 1992, read with Regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to the Securities Market) Regulations, 2003 and Sections 11 and 11B of SEBI Act, 1992, I hereby prohibit the company from accessing the capital market and buying, selling or dealing in securities for a period of two years and further direct the company, under section 11D of the SEBI Act, 1992 to cease and desist from violating regulation 26 of SEBI (Depositories and Participants) Regulations, 1996, regarding processing of dematerialization requests within the stipulated period."

3. The representative of the appellant raised various grounds before us such as delay in issuance of show cause notice and denial of charges of manipulation. This appeal can be disposed of without going into the merits of the matter, since it has been vehemently urged by the representative of the appellant that his client has sent a fax to the respondent dated 12^th September, 2003, which reads as follows:

"Ref: Alpha Vision Overseas India Limited

VD2/KR/AOL/16288/2000

 

"Kind Attention:- Mr. P.K.Kuriachan

 

"Dear Sir,

 

"The above matter was scheduled for hearing on 10^th of September 2003 at your office. However, due to an emergency matter of my client had come up outside Bombay hence I had to rush for the same.

 

"I had informed Mr. Vijesh Attrey practicing company secretary regarding my inability to appear in the matter.

 

"I am extremely sorry and extend my apologies for the Inconvenience caused in the matter. I would also like to request you to kindly fix up the next date of hearing."

4. It was urged by the appellant as per Annexure A-4 the respondent informed the appellant that the hearing will take place on 4^th September, 2003. The respondent wrote another letter as per Annexure A-5 that the matter will not be heard on the 4^th September, 2003 and the matter will be heard on the 10^th of September, 2003. The appellant wrote a letter informing the respondent that he could not make himself be present due to personal reasons and was prepared to appear before the respondent on any date that is convenient to the respondent. It is not denied that the above mentioned letter dated 12^th September, 2003 was in fact received by the respondent. However, the respondent proceeded to pass orders on 21^st October, 2003 without giving an opportunity to present his case.
5. Learned counsel for the respondent Shri Kumar Desai submitted that when the letter was received on 12^th September, 2003 the hearing date was over. The representative of the appellant, however, submitted that the letter was available with SEBI before the impugned order was passed and since many substantial questions were raised SEBI ought to have given an opportunity to the appellant before the order was passed.
6. We are entirely in agreement with the representative of the appellant that the impugned order was passed on 21^st October, 2003 it was an ex-parte order and the letter for adjournment admittedly had been received by SEBI on 12^th September, 2003. The appellant has already undergone the bar of not accessing the capital market or buying or selling or dealing in securities w.e.f 21^st October, 2003. No interim order has been granted by this Court.
7. However, we are not inclined to set aside the impugned order, but we have no doubt that the appellant should have been heard before any order adverse to the appellant is passed. In that view of the matter we remand the case to the respondent for fresh disposal of the matter after hearing the appellant. The respondent shall dispose of the matter within 10 weeks of receipt of this order. The respondent is also at liberty to reduce period of debarment, if in accordance with law, and if equitable and taking into account that there was no interim order by this Tribunal staying the impugned order. Accordingly without setting aside the impugned order we direct the respondent to hear the appellant and pass fresh orders in accordance with law. All contentions are left open. As stated earlier the fresh order may also take into account the fact that the appellant has already suffered one year ban. It would be open to the respondent to confirm its earlier order, or set aside the earlier order or modify the earlier order as it deems fit in accordance with law after hearing the appellant. The appeal is disposed of accordingly. No costs.

(Pronounced in Court)

Place: Mumbai

Date: 12/10/2004

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