Appeal No. 512 of 2015. Case: Sandeep Kumar Vs Securities and Exchange Board of India. Securities and Exchange Board of India

Case NumberAppeal No. 512 of 2015
CounselFor Appellant: Deepak Dhane and Vinita Nair, Advocates i/b Joby Mathew & Associates and For Respondents: Pradeep Sancheti, Senior Advocate and Anubhav Ghosh, Advocate i/b The Law Point
JudgesJ.P. Devadhar, J. (Presiding Officer), Jog Singh and Dr. C.K.G. Nair, Members
IssueCapital Market
Judgement DateJanuary 19, 2017
CourtSecurities and Exchange Board of India


J.P. Devadhar, J. (Presiding Officer)

  1. Appellant is aggrieved by the order passed by the Whole Time Member ("WTM" for short) of Securities and Exchange Board of India ("SEBI" for short) on 19th October, 2015. By that order, Megasys Medi Life Ltd. ("company" for convenience) and its directors including the appellant herein are, inter alia, jointly and severally directed to refund the money collected by the company through the issuance of secured redeemable debentures with interest at 15% per annum compounded at half yearly intervals from the date when the repayments became due to the investors till the date of actual repayment.

  2. It is the case of the appellant that he had resigned as a director of the company on 9th August, 2010 and out of the amount of Rs. 52.79 lac collected through secured redeemable debentures during the years 2010-2011 to 2012-2013, only amount of Rs. 2.97 lac was collected during the period when the appellant was the director. It is contended on behalf of the appellant that since recovery proceedings have already been initiated by SEBI against the company and other directors for recovery of the entire amount with interest which the company has failed to refund to the investors, recovery against the appellant be restricted to the amount collected during the period when the appellant was director of the company. To prove the bona fides, Counsel for the appellant on instruction submitted that the appellant would submit a fixed deposit receipt of nationalized bank for Rs. 5 lac to SEBI on or before 31/1/2017 which SEBI shall be at liberty to encash in case SEBI is unable to recover the entire amount from the company and other directors. Counsel for appellant further states that the appellant shall not dilute the fixed deposit of Rs. 5 lac in any manner whatsoever till entire amount under the impugned order is recovered by SEBI.

  3. Counsel for SEBI fairly stated that recovery proceedings have been initiated by SEBI against the company and several other directors by attaching their immovable properties, bank...

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