Securities and Exchange Board of India Act 1992 – s.19 r/w. ss.11(1), 11(4)(d), 11(4A), 11(5) and 11B – SEBI (Prohibition of Insider Trading) Regulations 2015 – regn.10 – It was alleged that respondent-CEO and Managing Director of the company had sold 51,000 shares of the company on 24.10.2016 having inside knowledge of price sensitive information, namely, the unaudited financial results of the quarter ending on 30.09.2016 – Later, the price of the scrips of the company sustained a drastic reduction – The allegation against the respondent was that being in possession of price sensitive information, he had sold the shares and had, thus, made a notional gain or averted a notional loss – The matter became subject of investigation in 2017 and the respondent was called for information on 28.11.2019 – The Whole Time Member passed an ex-parte order on 15.06.2020 – However, the Tribunal held that it does not find any case of extreme urgency which warranted to pass an ex-parte interim order only on arriving at the prima-facie case that the respondent was an insider as defined in the Regulations, 2015 without considering the balance of convenience or irreparable injury – Held: On the facts, the Tribunal was correct in coming to the conclusion that since the investigation was pending since 2017 and information had been supplied on 28.11.2019, there was no urgency for passing an ex-parte interim order of the nature that was issued by the Whole Time Member – It was, in this background, that the Tribunal, while affirming the power of SEBI to pass an ex parte interim order in appropriate cases, observed that this should be exercised “only in extreme urgent matters” – Thus, there is no reason to take a view at variance with the conclusion of the Tribunal on the facts of the case – However, the interpretation which has been placed by the Tribunal on the powers of SEBI shall not be cited as a precedent in any other case – Accordingly, appeals are disposed of.
North End Foods Marketing Pvt Ltd v Securities and Exchange Board of India (Appeal 80 of 2019 decided on 12.03.2019 by Securities Appellate Tribunal) – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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