V. R. Venkatachalam vs Securities And Exchange Board Of India And Others

Tarun Agarwala, Presiding Officer

We have heard the learned counsel for the parties. The order of the Adjudicating Officer (hereinafter referred to as ‘AO’) of Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) dated January 31, 2018 has travelled all the way to the Hon’ble Supreme Court of India and has reached its finality. The penalty imposed was required to be recovered but before it could be recovered, the appellant obtained an interim order from the Hon’ble Madras High Court. The said Writ Petition was disposed of finally on February 6, 2020 permitting the appellant to file the present appeal.

Based on the said order, it transpires that the appellant has furnished title deeds of immovable properties to the Recovery Officer which according to the appellant would be sufficient to cover the penalty amount alongwith the interest accrued thereon. It was urged that the shares and securities which are also attached may not be sold by the Recovery Officer prior to selling the land. It was also urged that the balance amount, if any, could also be paid provided some time is given to the appellant.

Considering the submissions, we are of the opinion that the appropriate remedy available to the appellant is to approach the Recovery Officer by filing an appropriate application under Section 28A of the Securities and Exchange Board of India Act, 1992 read with Section 220 to 227, 228A, 229, 232 etc. of the Income Tax Act and Income Tax (Certificates Proceedings) Rules, 1962. If such an application is filed, the Recovery Officer would deal with the application and pass appropriate order after giving an opportunity of hearing. It would also be open to the appellant to move an appropriate interim application before the Recovery Officer for appropriate interim relief pending final disposal of the main application.

The appeal is disposed of accordingly.