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Judgment
We have heard Sri Pradeep Sancheti, learned senior counsel assisted by Sri Pulkit Sharma and Sri Aditya Bhansali, Advocates for the appellant and
Sri Rashid Boatwalla, learned counsel assisted by Sri Rahul Jain and Sri Pruthvi Dhinoja, Advocates for the respondent through video conference.
The scrip of Mittal Lifestyle Limited were initially placed in the information list during the Covid-19 Pandemic period on May 12, 2020 and
subsequently transferred to the current watch list on June 24, 2020. When the scrip were placed in the information list, the appellant wrote an email
dated May 14, 2020 seeking clarification from the respondent as to whether they can sell the shares of Mittal Lifestyle Limited. In response, the
respondent vide email dated May 14, 2020 replied that there was no restriction in the sale of the shares unless it was placed in the current watch list
as per the Circular dated July 10, 2018.
Based on this clarification given by the respondent, the appellant made trades on behalf of the promoters of Mittal Lifestyle Ltd. and other entities
between June 10, 2020 to June 24, 2020 amounting to Rs. 9,86,49,243/- of the promoter and Rs. 7,34,165/- against an entity known as Ramakant
Parasrampuria. On the night of June 24, 2020 respondent informed the appellant that the scrips in question has been placed in the current watch list
and, thereafter, through various emails including the impugned email dated June 24, 2020, the appellant was directed to withhold the disbursed
proceeds from the sale of shares of Mittal Lifestyle Limited which was done between June 10, 2020 to June 24, 2020 and further directed to transfer
the same in an Escrow account by July 31, 2020 failing which Additional Surveillance Margin @ 25% on the highest gross traded value across
segment would be made applicable.
The contention raised by the learned senior counsel for the appellant is, that the proceeds of the scrips have already been paid to the promoters/
entities within the stipulated preiod as per the rules and regulations framed by the respondent including Securities and Exchange Board of India
(“SEBIâ€) and that only a sum of Rs. 89,42,515/- has been withheld of the promoters and a sum of Rs. 2,41,502.40/- of Ramakant Parasrampuria.
It has also come on record that the appellants as per various circulars dated November 17, 2017, May 15, 2018 and July 10, 2018 have been
requesting the promoters and other entities to refund the amount so that the directions of the respondent could be complied with but till date the
amount has not been received. It has been urged, that the appellants have not defaulted in the sales made by them and that they have carried out the
sales as per the Circulars and clarification received from the respondent.
On the other hand, Sri Boatwalla submitted that a Surveillance Action has been taken and, at the moment, no disciplinary action has been taken
against the respondent and as and when the need arises appropriate proceedings would be taken.
Considering the aforesaid, we direct the respondent to file a reply within four weeks from today. Three weeks thereafter to the appellant to file
rejoinder. Let the matter be listed for admission and for final disposal on October 07, 2020.
In the meanwhile, we direct the appellant to deposit the withheld amount of Rs. 89,42,515/- + Rs. 2,41,502/- totaling Rs.91,84,017/- before the
respondent within 24 hours from today. In addition to the aforesaid, the appellant will make all efforts to bring back the balance money from the
promoters and other entities and update the respondent on that score on a week to week basis. In addition to the aforesaid, in the event of failure of
the appeal, the appellant would also be directed to deposit the balance amount along with interest as quantified by this Tribunal.
In view of the aforesaid, the direction of the respondent by the impugned order dated July 25, 2020 directing the appellant to deposit 25% Additional
Surveillance Margin shall remain stayed during the pendency of the appeal. Misc. Application No. 218 of 2020 (Urgency Application) and Misc.
Application No. 219 of 2020 (Interim Relief) are accordingly disposed of.
Parties are directed to take instructions from the Registrar 48 hours before the date fixed in order to find out as to whether the matter would be
taken up for hearing through video conference or through physical hearing.
The present matter was heard through video conference due to Covid-19 pandemic. At this stage it is not possible to sign a copy of this order nor
a certified copy of this order could be issued by the Registry. In these circumstances, this order will be digitally signed by the Presiding Officer on
behalf of the bench and all concerned parties are directed to act on the digitally signed copy of this order. Parties will act on production of a digitally
signed copy sent by fax and/or email.