23 Landmark Securities Appellate Tribunal Judgements

from 2023

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 DISCLAIMER

The views expressed, discussions generated, any opinion expressed, any example or any
analysis provided are personal and for academic purposes alone.
This material is not intended to provide legal advice.

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Sr.No. Order Page No.
1. NSE V. SEBI (Order dated January 23, 2023) 5
2. SRSR Holdings Pvt. Ltd. V. SEBI (Order dated February 02, 2023) 6
3. Quantum Securities V. SEBI (Order dated February 02, 2023) 7
4. Bull Research Investment Advisors V. SEBI (Order dated February 06, 2023) 8
5. Ashish Bagrodia V. SEBI (Order dated February 23, 2023 9
6. Arshad Hussain Warsi V. SEBI (Order dated March 27, 2023) 10
7. Asit C. Mehta Investment Intermediaries Ltd. V. SEBI (Order dated April 11, 2023) 11
8. Pravin Champalal Jain V. SEBI (Order dated April 11, 2023) 12
9. Nectar Life Sciences Ltd. V. SEBI (Order dated April 27, 2023) 13
10. Brickwork Ratings India Private Limited V. SEBI (Order dated June 06, 2023) 14
11. Tejo Ratna Kongara V. SEBI (Order dated July 05, 2023) 15
12. Late Sh. Y.N. Saxena (Dead) V. SEBI (Order dated August 04, 2023) 16
13. Channel Nine Entertainment Limited V. SEBI (Order dated August 10, 2023) 17
14. Prem Lata V. SEBI (Order dated August 23, 2023) 18
15. Vedanta Limited V. SEBI (Order dated October 05, 2023) 19
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Sr.No. Order Page No.
16. GRK Reddy V. SEBI (Order dated October 17, 2023) 20
17. Choice Equity Broking Private Limited V. MCX (Order dated November 06, 2023) 21
18. Urban Infrastructure Trustees Limited V. SEBI (Order dated November 22, 2023) 22
19. Reliance Industries Limited V. SEBI (Order dated December 04, 2023) 23
20. Chaturvedi and Shah LLP V. SEBI (Order dated December 04, 2023) 25
21. Alpana Kirloskar V. SEBI (Order dated December 04, 2023) 26
22. Jio Financial Services V. SEBI (Order dated December 13, 2023) 27
23. Future Corporate Resources Pvt. Ltd. V. SEBI (Order dated December 20, 2023) 28

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NSE V. SEBI (Co-location Case)(Appeal No. 333 of 2019)
(Order dated January 23, 2023)
• SEBI directed NSE to disgorge INR 624.89 Crores, its MD & CEO to disgorge 25% of their salary for their
failure to maintain the TBT infrastructure leading to manipulation and market abuse. It was held that the
company and its directors were in violation of the SEBI Act and the PFUTP Regulations.
• SAT set-aside the INR 624.89 crores stating that "The direction to disgorge must be in relation to any
transaction or activity which is in contravention of the provisions of the SEBI Act or its regulations. The
directions to disgorge can be made when the company is found to be engaged in illegal acts, and not
necessarily in every case should a direction to disgorge be passed, because some provisions of the Act have
not been adhered to.”
• Further, with respect to the MD and the CEO, SAT while setting aside the disgorgement amount held that the
powers under Section 11 and Section 11B cannot be extended to recover money from salary. Salary is
remuneration paid for work undertaken by an individual and cannot be held to be illegal gain. Direction for
disgorgement from salary amounts to penal recovery. It becomes punitive and not equitable. A penalty of
INR100 Crores was imposed as under Section 15J read with Section 23J of the SCRA to act as a deterrent from
any future lapses in diligence.
• This Order was appealed at the Supreme Court by SEBI which is still pending consideration. An interim order
has been passed to return the INR100 Crore to NSE with an undertaking that the amount will be refunded with
interest if the appeal is allowed.
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SRSR Holdings Pvt. Ltd. V. SEBI (Appeal No.1 of 2019)
(Order dated February 2, 2023)
• The SEBI order is related to the Satyam Scam and B.Ramalinga Raju (CEO) and family. The
matter pertains to the fraudulent and manipulative activity of falsifying the financial statements and
also, making illegal gains by indulging in insider trading in Satyam’s shares. Based on the
findings, SEBI asked the company alongside its promoters to disgorge an amount of INR 813.40
Crores jointly and severally.
• SAT observed that while calculating disgorgement, gains are limited only to those amounts which
are illegal. In cases of artificially inflating the price, the intrinsic value of the share must be
considered when calculating the gain.
• Further, SAT also observed that the misuse of “joint and several” liability. The liability can be
held to be joint and several only for a common act by joint tortfeasors. Since, the appellants-
B.Ramalinga Raju and B.Rama Raju sold their shares separately and not concurrently, their
acts are separate and the disgorgement amount for each person will be only attributable to his
own act.
• Since in this case SEBI has only considered the total sale value as the disgorgement amount, the
order is patently erroneous and thus, is remanded back SEBI.

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Quantum Securities Pvt Ltd v SEBI (Appeal No. 49 of 2021)
(Order dated February 2, 2023)
• The appellants were alleged to have made wrongful gain of INR 2.2 Crore by
insider trading in the shares of NDTV. Therefore, the appellants were asked to
disgorge the amount jointly and severally.
• SAT with respect to one of the UPSI pertaining to re-organization of the entity
held that mere raw information which has not been crystallized, cannot be held to
be UPSI. In this instance, a board meeting barely discussed the possibility of
splitting the business without taking any action. Such information cannot be held to
be UPSI.
• Further, SAT held that there must be a relation between the trading and the
encashing of the PSI. Since the WTM has failed to consider the issue, the matter is
remanded back to the authority for fresh consideration.

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Bull Research Investment Advisors v. SEBI (Appeal No. 62
of 2022) (Order dated February 6, 2023)
• SEBI had alleged that the appellant was carrying on unregistered investment advisory by
offering assured returns, failing to conduct risk profiling, collecting payments before KYC
and risk profiling through an ex-parte ad-interim order.
• SAT held that SEBI had cherry picked the word “assured” without noting the fact, that the
appellant had also used terms like “not guaranteed” in various documents pertaining to
Investment Advisory.
• Furthermore, even though the appellant had lapsed in its KYC obligations in a few cases, the
same did not require a cease-and-desist interim order from SEBI.
• As on date of the present order, 2 years had elapsed since the impugned direction by SEBI.
Thus, the order of SEBI to not carry on the business without any conclusive evidence is a
violation of right guaranteed under Article 19. Accordingly, Appellant is allowed to carry
on business for 4 months until the SCN is issued, if the SCN is not issued then the
remaining direction shall stand vacated.
• The matter was partly allowed.
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Ashish Bagrodia v. SEBI (Appeal No. 183 of 2022) (Order
dated February 23, 2023)
• The appellant was the non-executive director of Winsome Yarns (“Company) wherein he
was also part of the promoter and KMP Personnel. The Company authorized the issuance
of GDR wherein it was observed that the the GDR was subscribed by a sole subscriber
who was linked to the Company. This was held to be in contravention of the PFUTP
Regulations and thus, a penalty of Rs.10 Lakhs was imposed on the appellant.
• However, SAT with respect to the appellant (Non- Executive Director) noted that the the
appellant is not merely a non-executive director but also related to the promoter and
KMP Personnel. Further, he was part of the GDR Issuance Committee and the
Shareholder Grievance Committee, thus the contention that he was not part of the day
to day affairs of the company cannot be upheld. Thus, the appellant was part of the
GDR Issuance Scheme and acted in contravention to the provisions.
• The Appeal was dismissed.
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Arshad Hussain Warsi V. SEBI (Appeal No. 284 0f 2023)
(Order dated March 27, 2023)
• The company, traders and a network of online traders were alleged to have manipulated the
scrip of Sadhna Broadcast Limited and induced the investors to trade in the Scrip.
• SEBI passed an ex-parte ad-interim order against the actor, Arshad Warsi, Maria Goretti,
wife and his brother, Iqbal Hussain Warsi & 30 other noticees for allegedly misleading
investors through false content disseminated by way of YouTube videos to trade in the scrip
of Sadhna.
• The Tribunal held that, “it is clear that ad-interim orders can be passed in case of urgency
or where it is found that the noticee is about to dispose of the property. In the absence of
any finding that the appellants will defalcate the unlawful gains, the impounding order
constitutes malice in law. Further, the power must be exercised with extreme care and
caution and should be resorted to only as a last resort or measure. Merely by stating that
the appellants may divert the unlawful gains is not based on any cogent evidence rather
on surmises and conjectures and formation of unguided subjected satisfaction which is
not permissible.”
• The order was stayed.

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Asit C. Mehta Investment Intermediaries Ltd. v. SEBI
(Appeal No. 272 of 2023) (Order dated April 11, 2023)
• The matter was initiated based on an inspection undertaken by NSE and BSE
wherein it noticed certain anomalies such as misuse of clients fund, short collection
of margin, incorrect reporting, etc.
• NSE and BSE both charged INR3 lakhs as penalty from the appellant.
• SAT was of the view that while penalty under Section 23H of the SCRA was
justified, penalty under Section 23D for misuse of client’s funds was erroneous
because the Appellant had already been penalized by both BSE and NSE for the
same violation and such penalty would amount to penalizing the appellant for the
same violation, twice. Thus, the appeal was partly allowed wherein the penalty
under Section 23H of the SCRA was quashed while the penalty under Section 15H
of the SEBI Act and Section 23D of the SCRA was upheld.
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Pravin Champalal Jain v. SEBI (Appeal no. 566 of 2020)
(Order dated April 11, 2023)
• SEBI issued an order against Maars Software International imposing a penalty of INR 1 Crore for
violation of Section 12A of SEBI Act, 1992 and read with Regulations 3 and 4 of PFUTP
Regulations. According to SEBI, the Company had devised a fraudulent mechanism for issuance
of GDRs. It was held that the Company had devised a fraudulent scheme wherein Vintage was the
sole subscriber to such GDRs. However, Company did not disclose this fact with clarity that only
one entity had subscribed to the entire GDR and, therefore, misled the investors.
• SAT found that the GDR issue were received by the Company belatedly and was utilized for the
assigned purpose. There is no diversion of funds and no wrongful dealings in securities. It held
that the emphasis has shifted from the wednesbury principle of unreasonable to one of
proportionality. A disproportionate punitive measure which does not commensurate with the
offence would be violative of Article 14 of the Constitution of India. When the punitive
measures are harsh, the Court must exercise the principle of proportionality and reduce the
penalty to ensure rationality and make the unequals equal.
• The tribunal further noted that the penalty of INR 1 crore as levied by AO was excessive and
accordingly reduced the penalty to INR 10 lakhs only.
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 Nectar Life Sciences Ltd. V SEBI (Appeal No. 185 of 2023)
(Order dated April 27, 2023)
• In the matter, a casual vacancy arose in the company due to the death of the director of the company. According to
Section 161(4) of the Companies Act read with the proviso to Rule 4(1) of the Rules it is clear that a casual vacancy
which occurs in the office of the Director is required to be filled up by the Board of Directors within three months
from the date of such vacancy and such appointment is required to be approved by the members in the next general
meeting.
• The Company appointed another director aged 75 years but the person resigned within 132 days before
shareholders assent could be taken. NSE fined the company Rs.3,11,520/- for non-compliance of Regulation
17(1A) of LODR Regulations with respect to non passing of a special resolution.
• SAT has observed that there is clear distinguishment between a "casual vacancy by death" and a "casual
vacancy by resignation." It overturns a previous order, stating that a combined interpretation of section 17(1A)
and rule 4 of regulation 17(1C) of the LODR regulations, along with the provisions of Sections 152 and 161(4)
of the Companies Act, clarifies that even if a person over the age of 75 is appointed by the board of directors to
fill a casual vacancy, approval must be obtained through a special resolution in the next general meeting by the
company's members within the prescribed period. The term "unless" in Regulation 17(1A) does not imply "prior
approval," and the necessity of passing a special resolution is not a qualifying condition for appointing a person
as a director.
• The appeal was allowed.
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Brickwork Ratings India Private Limited v. SEBI (Appeal
No. 694 of 2022) (Order dated June 6, 2023)
• The Appellant was granted registration by SEBI in 2008 as a CRA and a securities
market intermediary. The WTM had cancelled the certificate of registration of
appellant to operate as CRA. The WTM observed that the repeated lapses, noticed
across multiple inspections, shows that governance changes recommended in earlier
inspections, and monetary penalties imposed have not proved effective or deterred
the Noticee (Appellant) in addressing very basic requirements of running a CRA.
• In this view, the SAT held that the repeated violations which include the delay in
recognition of default of NCDs and conflict of interest issues due to non-
segregation of roles are trivial in nature. The other errors as observed by the
WTM are routine operational errors and do not warrant cancellation of the
license of the appellant. Even the charge of conflict of interest is not that serious
which by itself could warrant cancellation of the license of the appellant. It was
held the proportionality in punitive measures is a vital facet of Article 14 and
thus, the cancellation is unjustified.
• SAT remitted the matter back to SEBI to pass a fresh order on the quantum of
penalty other than the order of the cancellation of the license.
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Tejo Ratna Kongara v. SEBI (Appeal No. 206 of 2023)
(Order dated July 5, 2023)
• An appeal was filed by the appellant challenging the order of SEBI whereby the
representation in the matter of scheme of amalgamation/ arrangement between Indiabulls
Real Estate Limited and Embassy Group Companies was decided.
• A scheme of arrangement between certain respondents was approved by the shareholders
and NCLT, Bengaluru however, NCLT Chandigarh rejected it because one person purchased
20,100 equity shares of Indiabulls, thus becoming a shareholder but did not participate in the
meeting of the shareholders. This person filed an intervention application later before NCLT
Chandigarh on the ground that he did not meet the threshold limit of 10% of the
shareholding for raising objection as stipulated under the proviso to Section 230(4) of the
Companies Act, 2013.
• The issue that arose was whether the appellant is an aggrieved person as provided under
Section 15T of the SEBI Act and SEBI also contended that the appellant cannot go forum
shopping on the same cause of action, the matter falls under the jurisdiction of NCLT. SAT
noted that by purchasing the shares from the shareholder, the appellant becomes a
shareholder of the Company and derives such rights which a shareholder of a Company
gets but such right does not include the right to litigate or to continue with the complaint.
Thus, the transfer of shares from the shareholder to the appellant does not and cannot
include the transfer of a cause of action. The complaint is personal and comes to an end
when the shareholder transfers the shares.
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Late Sh. Y.N. Saxena (Dead) v. SEBI (Appeal no. 601 of
2021) (Order dated August 4,2023)
• The appellants were the legal representatives of Late Shri Y.N. Saxena, Director in Sahara India Commercial
Corporation Ltd. (“SICCL/the Company”)
• The WTM had passed an order against the Late shri Y.N. Saxena for failure of SICCL to mobilize funds
through Optionally Fully Convertible Debentures (“OFCDs”) in accordance with the SEBI Act, the
Companies Act and the ICDR Regulations etc. The WTM had directed the appellant to refund the money
collected from the investors.
• SAT observed that since no proceedings were initiated against Shri Saxena during his lifetime,
proceedings against the legal representatives could not be initiated nor continued and, therefore, the
impugned order is a nullity in the eyes of law and cannot be sustained.
• Furthermore, in the absence of any provision in the SEBI Act to recover monies from the estate of the
deceased, no such directions can be issued to the legal representatives of the deceased.
• As per 5(g) of the Companies Act, the right to sue will not survive against the legal representatives in case of
personal actions, i.e., the actions where the relief sought is personal to the deceased. In this regard, the
maxim “actio personalis moritur cum persona” is fully applicable, namely, that personal action dies with
the death of the person and the right to recover survives only when it is crystallized before the death of the
deceased.
• A penalty of INR 5 lakhs was imposed on the respondent for the harassment caused to the legal
representatives of the deceased.

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Channel Nine Entertainment Limited v. SEBI(Appeal No.
140 of 2022) (Order dated August 10, 2023)
• The Company had made preferential allotment of equity shares to a total of 100 persons on three
instances from November 01, 2012, to November 10, 2012. Since the number of allottees were above
the prescribed limit of 49 persons under Section 67 of the Companies Act, 1956, the Company was
under an obligation to file a prospectus in connection with the issue of securities and comply with the
provisions of the Companies Act, 1956 as well as the provisions of the Securities and Exchange Board
of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (“ICDR Regulations”).
• The SAT held that that the investors in the deemed public issue through allotment of preferential shares
have not been substantially prejudiced due to non-compliance with the provisions of Section 67 of the
Companies Act read with Section 73 of the Companies Act as the scope of Section 73 is to list the
company on a stock exchange before issuing shares. If no permission for listing is provided then the
company must refund the money to the investors. In this case, the appellant was listed on the BSE and
hence, exit opportunity was available to the investors.
• Hence, the directions of the WTM directing the appellants to refund the money collected through
preferential allotment under Section 67 along with interest cannot be sustained and, to that extent the
directions are quashed. Since the appellants did violate Section 67 of the Companies Act, the directions
debarring the appellants from accessing the securities market etc. is affirmed.

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Prem Lata v SEBI (Appeal No. 781 of 2022) (Order dated
August 23, 2023)
• The husband of the appellant, Nanak Chand, had a trading account with the broker Amrapali
Aadya Trading & Investment Pvt. Ltd. The broker become a defaulter in the Bye laws and
rules of NSE and thus, a committee was formed to the investors to obtain the non received
funds and securities. The Defaulter Committee noticed that the trades and funds pertained to
a period after the death of the account holder and thus, the claim was rejected.
• The Committee held that the agreement between the broker and the investor comes to an end
after his death. Further, since the period between the account holder's death and the disabling
of the broker's terminal exceeded 24 months, the widow's claim could, at most, be classified
as a loan transaction.
• SAT set-aside the Committee order and held that in the absence of any provision it cannot
be presumed that the trading account ceases to exist on the death of the investor and
additionally, there were trades and settlements in the account and thus, NSE must accept
the claim for funds and securities by the wife of the account holder.
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 Vedanta Limited v SEBI (Appeal No. 420 of 2021) (Order
dated October 5, 2023)

• The Board of Directors of Cairn India Ltd. approved a buyback for which the Company was not able to
meet the minimum number of shares stipulated.
• Sebi’s main allegation against the company was that it had no intention to conduct a buyback because it
could not buy the minimum number of shares stipulated. It said the buyback was merely designed to
induce investors to trade the company’s shares. This was in violation of Regulation 19(1)(a) of SEBI
(Buyback of Securities) Regulations, 1998. SEBI fined the company INR5 Crores for misleading
announcements and another INR 25 Lakhs penalty for violation of the buyback rules. In the same order
the regulator also imposed a fine of INR 15 lakh each on the directors and the compliance officer.
• The appeal was allowed by SAT stating that it was not foreseen or predicted that the stock markets
would witness a bullish trend at the time when the decision for going for a buyback was taken nor
could the Company be aware at the time of making the public announcement that the traded price of
the scrip would be above the maximum buyback price on 68 days out of 123 trading days, which it had
to complete the buy-back.

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GRK Reddy v SEBI (Appeal No. 584 of 2020) (Order dated
October 17, 2023)
• The issue is with respect to voluntary open offer made by the Company which was later
withdrawn. The Supreme Court in the matter held that an open offer cannot be withdrawn as it
would be detrimental to the shareholders of the Company. With respect to the matter, 2 AO orders
and a WTM Order was passed at a later stage for violation of the SAST Regulations.
• With respect to the WTM order, SAT held that the direction to make an open offer after a belated
time is arbitrary and without application of mind.
• In respect to the AO order, it held that the penalty under Section 15H(ii) is to be between INR10
lakhs to INR 25 Crore or 3 times the profits. In the present case, the AO has calculated the
penalty as the cost of acquisition alongside the interest, which is completely without any
application of mind.The second AO Order was issued for non-compliance with the WTM Order
which was already in appeal at the Tribunal.
• SAT held that such issuance is patently erroneous. Further, SAT held that Section 15HB cannot
be imposed for enforcement of a WTM Order under Section 11 and Section 11B.
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Choice Equity Broking Private Limited v MCX (Appeal
No. 818 of 2023) (Order dated November 6, 2023)
• MCX had penalized the broker for non-genuine trades undertaken by its client.
However, the issue that arose was that the penalty was imposed through an email,
which was deemed to be a show cause notice.
• While the SAT recognized MCX's authority under Clause 3.1 of the Bye-laws and
relevant Rules to impose penalties, it expressed concern about the absence of a
procedural framework for penalty imposition. Dismissing MCX's assertion that an
email sufficed as an SCN, the SAT, referring to the Gorkha Security Services case,
deemed it inadequate due to a lack of grounds for action and specifics about the
proposed penalty. Consequently, the SAT considered the imposition of the penalty
without a proper SCN a gross violation of natural justice and directed the
reimbursement of the debited amount. The tribunal concluded by instructing MCX
to establish a procedure for initiating penalty proceedings against its members,
emphasizing the current absence of such a framework in the presented Bye-laws and
Rules.
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Urban Infrastructure Trustees Limited v. SEBI (Appeal
No. 93 of 2023) (Order dated November 22, 2023)
• The matter pertains to a VC Fund started in 2016 to invest in real estate. The VCF
failed to wind up its operations in a timely manner and pay off its investors and
accordingly, SCN was issued by SEBI. The SEBI order restrained certain persons
from accessing the securities market or associating with any registered intermediary
for a period of one year.
• A key interpretation by SAT in this order is that a restraining a person from
securities market is outside the scope of SCN issued under Section 11B. Section
11B is merely an enabling provision and thus, cannot prevail over Section 11.
SEBI has a choice to initiate actions under Section 11(1), (2), (2-A) and (3) or
under Section 11B and save its right under Section 11(4) to be availed at a later
stage.
• Thus, the appeal was partly allowed.

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 Reliance Industries Limited v. SEBI (Appeal No. 87 of 2021)
(Order dated December 4, 2023)
• The matter pertains to the alleged profits between November 1, 2007 to November 29, 2007, made
by the directors of Reliance Petroleum and its certain officers by selling shares in the equity
segment and shorting the scrip in the futures segment through 12 agents allegedly appointed by the
entities related to the Company. The WTM passed an order asking the company to disgorge
INR400 Cr with interest which is pending consideration at Supreme Court while AO penalized the
appellants for INR 70 Cr.
• SAT while quashing the order held that with respect to the allegations against the MD that it is
justly argued that prior to the 2019 amendment to Section 27 the word “offence” only intended
to punish criminal offenses and not impose civil liability. The Finance Bill indicates that the
idea of the amendment was to broaden the scope of section to include enforcement proceedings.
Thus, the Company cannot be penalized.
• Additionally, the there is no proof against the MD as his knowledge was restricted to limited
information provided at the Board meeting and he was not involved in the sale of shares.
Reliance was placed on Sunil Bharti Mittal vs CBI, (2015) 4 SCC 609, wherein it was held that
unless the statute specifically provides for a vicarious liability, no such liability can be imposed.
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• On the question of delay in issuance of SCN, SAT held that the order cannot be passed
on the whims and fancies of the regulator as it is completely perverse to the
principles of Limitation Act.
• Further, on the question on non-supply of documents to one of the Appellants, SAT
held that “Non supply of documents was violative of the principles of natural justice.
We are also of the opinion that prejudice caused by non-disclosure of the relevant
material was writ large.” Reliance was placed on the T. Takano judgement.
• The appeal was allowed.

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Chaturvedi and Shah LLP v. SEBI (Appeal No. 625 of 2023)
(Order dated December 4, 2023)
• The LLP is a CA firm which was the statutory auditor for the Company, CG Power, during
2016-17 and 2017-18. In August 2019, the company disclosed that the liabilities and its related
and unrelated transactions might be understated.
• A SCN was issued to Chaturvedi and Shah on March 11, 2020 as to why action under Section
15HB must not be taken against them for conniving with the company by assisting in cleaning
up their books while being aware of the irregularities and misstatements in the financial
statements.
• SAT discussing the scope of SEBI’s jurisdiction relating to professionals held that SEBI can
only take action against CAs for the protection of investors and in allegations of PFUTP
Regulations, only if the CA has acted in connivance or has conspired in the manipulation.
Reliance was placed on Price Waterhouse & Co. & Anr v. SEBI (2010 SCC OnLine Bom
1197).
• SAT held that audit has its own limitations and should be differentiated from forensic audit.
The CA may act with diligence but given that the audit is done on sampling basis and based
on document evidence, it may miss a misstatement. Since, there is no proof that the firm
assisted the Company in clearing its books, the order is quashed. The ICAI may take actions,
if there are any violations of Accounting Standards.
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Alpana Kirloskar v SEBI (Appeal No. 499 of 2020) (Order
dated December 4, 2023)
• The matter pertained to insider trading by promoters of Kirloskar Group in 2010 where SEBI
alleged that the promoters made profits by selling shares of KBL before the disclosure of
capital loss on investments. The interim stay was given by SAT in December 2020 directing
that the accounts be defreezed with the only condition that the promoters shall not sell the
shares of KBL. The order was confirmed on October 2022.
• However, the accounts on the promoters was not defreezed even uptil November 2023, after
sending several emails to SEBI and NSDL. SAT held that, “this lackadaisical approach by
SEBI is contrary to the spirit of the SEBI Act which in our opinion is to protect the
interest of the investors. In the instant case, we find that the interest of the investors,
namely, the appellants were least considered and apathy was writ large.”
• Further SAT held, “SEBI should have been more diligent in ensuring compliance of the
orders of this Tribunal and by taking a lackadaisical approach the interest of the investors
suffered. For more than a year the appellants shares remained frozen inspite of their
appeals have been allowed.” A penalty of INR5 lakhs was imposed on SEBI.
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Jio Financial Services Ltd. v SEBI (Appeal No. 745 of 2023)
(Order dated December 13, 2023)
• The facts pertaining to the case was that Jio Financial being a subsidiary of RIL around
2016-17, took certain positions in equity derivatives which were squared off in compliance
with the SEBI order dated March 24, 2017, which debarred RIL from dealing in equity
derivatives and asked the entity to exit all the current positions. It contented that any trading
apart from squaring off would be held to be indirect trading by RIL. The AO held that the
appellant was involved in synchronized trading as the trades were executed at a significant
discount.
• SAT held that the allegations of synchronized trading are based on surmises and conjectures.
The shares were at a discount on account of the WTM order and it cannot be expected for a
company to have a policy for such situations. Additionally, a single trades without any
circular or reversal trading cannot be held to be manipulative. Further, there is no law
that states that pre-negotiation of trades before executing it on the stock exchange is
prohibited.
• SAT agreeing with the appellant that any trade undertaken by it would constitute ”indirect
trading” by RIL, set-aside the order.

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Future Corporate Resources Pvt. Ltd. v. SEBI (Appeal No.
81 of 2021) (Order dated December 20, 2023)
• The matter pertains to the scheme of arrangement entered by the Company with various entities during which the appellants
have been alleged to have traded. Thus, a WTM Order was issued for against the company and a few of the KMPs for
violation of PIT Regulations.
• For an information to be termed as UPSI, it must
(i) be relating to the company or its securities either directly or indirectly;
(ii) not be generally available; and
(iii) likely to materially affect the price of the securities.

• Further, SAT held that the WTM’s conclusion that the term ‘generally available information’ must only mean
information which has been disseminated on the platform of the stock exchange was found to be erroneous and it was
further observed that the information published on the stock exchange’s website would constitute ‘generally available
information’, it would not follow that only information that is published on the stock exchange website would be
considered ‘generally available information’. Further, any information accessible to the public on non-discriminatory
basis would also be ‘generally available information’.
• Hence, the SAT concluded that the publication of information regarding the transaction which was reported in multiple print
and digital publication clearly leads to an irresistible conclusion that information of the transaction was generally available.
Thus, the information relating to de-merger was already in the public domain and, therefore, trading done by the appellants
in the shares after the publication of the interviews and news reports cannot be considered as trading while in possession of
UPSI. Appeals were allowed and the impugned order was quashed.

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