Appeal No.22 of 2013. Case: 1. D & A Financial Services P. Limited, 2. Mr. Dinesh R. Kaushik Vs Securities and Exchange Board of India, Mumbai. Securities and Exchange Board of India
| Case Number | Appeal No.22 of 2013 |
| Counsel | For the Appellants: Ms. Leene Toty, Advocate and For the Respondent: Mr. Shiraz Rustomjee, Senior Advocate with Mr. Mihir Mody, Advocate |
| Judges | P. K. Malhotra, Member & Presiding Officer (Offg.) |
| Issue | Securities and Exchange Board of India Act, 1992 - Sections 11 of 11B |
| Judgement Date | February 07, 2013 |
| Court | Securities and Exchange Board of India |
Judgment:
P. K. Malhotra
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With the consent of the learned counsel for the parties, the appeal is taken up for final hearing.
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At the outset learned counsel for the appellant submitted that the appeal may be confined only to prayer in paragraph 6(ii) of the appeal and she is not pressing for other prayers. Prayer in paragraph 6(ii) reads as under:- "(ii) pass an order setting aside letter dated 27.12.2012 directing Appellant not resume its Merchant banking Operations and declaring that as per Order dated 5.10.2012 the interim order stands vacated and consequently allow the Appellant to carry on its Merchant Banking Activities;"
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The facts of the case, in brief, are that Appellant no.1 is a merchant banker and it acted as a broker of Brooks Laboratories Limited (the company). Appellant no.2 is one of the promoters of the appellant company. The Securities and Exchange Board of India (for short the Board) carried out investigation into the IPO issue of the company and found certain irregularities committed by the appellants. The Board passed an ad-interim ex-parte order dated December 28, 2011 prohibiting, beside others, the appellant from taking up any new assignment or involvement in any new issue of capital including IPO, follow-on issue etc from the securities market in any manner whatsoever from the date of the order till further directions. This direction to the appellant is part of paragraph 28 of the order which, in the opening portion, states that the ad-interim ex-parte order is being passed pending investigations. The said ad-interim ex-parte order was also a show cause notice and the appellant was required to file a reply. After granting personal hearing to the appellant, the Board passed an interim order on September 5, 2012 in which it specifically said that the direction issued by order dated December 28, 2011 should continue till the completion of investigation in the matter. As per affidavit dated February 5, 2012, filed by the Board, the investigation qua the appellant was completed on November 27, 2012 and a show cause notice was issued on December 21, 2012. The Assistant General Manager of the Board issued another letter dated December 27, 2012 to the appellant observing that the Board has completed investigation in compliance with the directions issued by this Tribunal earlier on October 5, 2012 and consequently proceedings are underway. It advised the appellant to refrain from resuming the merchant banking...
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