Mr. Rakesh Singh Narwaria & Another vs Securities and Exchange Board of India on 18 December 2019

1. Mr. Rakesh Singh Narwaria

2. Mrs. Girja Narwaria

72, Shiv Nagar, Birla Nagar, Gwalior, Madhya Pradesh- 474 004 …Appellants

Versus

Securities and Exchange Board of India, SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051

…Respondent

AND Review Application No. 29 of 2019

In Appeal No. 239 of 2019

Securities and Exchange Board of India

…Applicant

(Orig. Respondent) Versus

In the matter of

1. Mr. Rakesh Singh Narwaria

2. Mrs. Girja Narwaria

72, Shiv Nagar, Birla Nagar, Gwalior, Madhya Pradesh- 474 004 …Appellants

Versus

Securities and Exchange Board of India, SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051

…Respondent

Mr. Chirag Bhavsar, Adocate with Mr. Nishit Dhruva and Ms. Eram Quraishi, Advocaes i/b MDP & Partner for the Applicant/(Orig. Respondent).

Mr. Prakash Shah, Advocate with Mr. Chinmay Paradkar, Advocate i/b Prakash Shah & Associates for the Respondent (Orig. Appellants).

CORAM: Justice Tarun Agarwala, Presiding Officer Dr. C.K.G. Nair, Member Justice M. T. Joshi, Judicial Member Per: Justice Tarun Agarwala

1. We have heard the learned counsel for the parties. The present appeals were filed against the order dated March 27, 2018 passed by the Whole Time Member (“WTM” for convenience) of Securities and Exchange Board of India (“SEBI” for convenience) issuing various directions namely, to wind up the collective investment schemes and refund the monies and were also restrained from accessing the securities market, etc. Pursuant to the said orders, the bank accounts and the demat accounts of the appellants were frozen.

2. This matter came up for hearing and final disposal on November 26, 2019. Since we could not get the assistance of the learned senior counsel for the respondent, we passed an interim order dated November 26, 2019 after hearing the parties directing the respondent to withdraw a sum of ` 20 lakh from the accounts of the appellants and thereafter defreeze the bank accounts and the demat accounts of the appellants within a week.

3. The respondent being aggrieved by this part of the order has filed the Review / Modification Application No. 29 of 2019 praying that the directions issued by this Tribunal on November 26, 2019 be remained stayed during the pendency of the appeal.

4. At the outset, we may point out that during the midst of a hearing in another matter a mention was made by the learned senior counsel for the respondent to take up this matter. The Tribunal agreed to do so and when the appeal was called out we again found the non-availability of the learned senior counsel for the respondent. We accordingly, heard the learned counsel for the parties.

5. An attempt was made that the balance sheet as on March 31, 2008 indicates that a sum of ` 4,62,08,962/- was received

from the investors. The respondent thus contended that since the said amount was received during the period when the appellants were directors consequently the directions issued by this Tribunal should remain an abeyance failing which it would be difficult to recover the amount in the event of the dismissal of the appeal.

6. On the other hand, we find from a perusal of the balance sheet as on March 31, 2010 that the reserve and surplus as per the profit and loss account was ` 1.38 crores, the investment made by the company was ` 4.65 crores, the cash at bank was ` 1.95 crores. Thus, at the time when the appellants resigned as directors, the networth of the company was far more than the deposits taken from the investors. Consequently, at this stage we do not find any reason to modify our order dated November 26, 2019. The Review Application No. 29 of 2019 is misconceived and is dismissed.

Sd/- Justice Tarun Agarwala Presiding Officer

Sd/- Dr. C.K.G. Nair Member

Sd/- Justice M. T. Joshi Judicial Member

18.12.2019 Prepared & Compared By: PK