BEFORE THE SECURITIES APPELLATE TRIBUNAL

MUMBAI


Appeal No. 230 of 2014

Date of Decision : 01.10.2014


M/s. A.G. Shares & Securities Ltd.
Shop No. 1, Block No. 20/4,
1
st
Floor, Maruti Tower,
Sanjay Place,
Agra 282002.




Appellant


Versus



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

2. National Stock Exchange of India Ltd.
Exchange Plaza,
Bandra Kurla Complex,
Bandra (E), Mumbai 400 051.

3. The U.P. Stock Exchange Ltd.
Padam Towers,
14/113, Civil Lines,
Kanpur 208 001, U.P.

4. The U.P. Stock Exchange Association Ltd.
Padam Towers,
14/113, Civil Lines,
Kanpur 208 001, U.P.



















Respondents


Mr. Bharat Merchant, Advocate for the Appellant.

Mr. Kumar Desai, Advocate with Mr. Pulkit Sukhramani, Advocate for
Respondent No. 1.

Mr. Rashid Boatwala, Advocate for Respondent No. 2.

None for Respondent Nos. 3 & 4.



CORAM : Justice J.P. Devadhar, Presiding Officer
Jog Singh, Member
A.S. Lamba

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Per : J.P. Devadhar (Oral)


1. Appellant is aggrieved by the recovery certificate issued by Securities
and Exchange Board of India (SEBI) on May 22, 2014 as well as the notice
issued by SEBI to National Stock Exchange of India Ltd. (NSE) on
June 16, 2014. In the recovery certificate dated May 22, 2014 it is stated
that appellant is liable to pay outstanding fees amounting to Rs. 17,89,494/-
along with interest, all costs, charges and expenses and appellant was called
upon to pay the said amount within 15 days of the receipt of the said
recovery certificate. Since appellant failed to pay the amount within the
specified date, by notice dated June 16, 2014 SEBI called upon NSE to
remit Rs. 17,89,494 from the deposits of the appellant which were lying
with NSE.

2. Grievance of the appellant is that the impugned recovery certificate
has been issued on the basis of provisional liability statement of SEBI dated
August 25, 2004 which was made available to the appellant through U.P.
Stock Excahnge Ltd. alongwith its letter dated August 27, 2004. It is
contended on behalf of appellant that without any formal order passed by
SEBI supporting such provisional liability statement, it was not proper on
part of SEBI in issuing the impugned recovery certificate. Hence, the
recovery certificate as also the notice sent by SEBI to NSE are illegal and
hence liable to be quashed and set aside. It is further contended that SEBI
has neither considered the auditors certificate furnished on April 5, 2002 nor
the auditors certificate furnished on August 30, 2004 wherein the auditors
had certified that the turnover details of the appellant have been checked,
verified and found to be correct. Without considering the aforesaid auditors
certificate and without passing final orders SEBI could not have raised
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demand against the appellant. Accordingly, it is submitted that the recovery
certificate as also notice issued by SEBI to NSE be quashed and set aside.

3. Counsel for respondent no. 1 on the other hand submitted that the
recovery certificate has not been issued on the basis of provisional liability
statement, but issued on the basis of final fee liability statement issued on
March 14, 2005 and on April 22, 2005. Those final fee liability statements
were issued after considering the documents furnished by the appellant.
Therefore, the argument of the appellant that the demand has been raised
based on the provisional liability certificate is not correct. Counsel for the
SEBI further submitted that pursuant to the notice dated June 16, 2014 the
amounts have already been remitted by NSE to SEBI vide NSEs letter
dated June 17, 2014. Hence, the appeal has become infructuous.

4. We have carefully considered rival contentions.

5. Basic grievance of the appellant is that the recovery certificate has
been issued on the basis of provisional liability statement dated August 25,
2004 and without considering the auditors certificate furnished on April 5,
2002 and again on April 30, 2004. Since SEBI has issued fee liability
statement on March 14, 2005 and April 20, 2005 subsequent to the appellant
furnishing auditors certificate, it is evident that the said fee liability
statements dated March 14, 2005 and April 20, 2005 constitute final fee
liability statement.

6. Moreover, it is relevant to note that challenging the provisional fee
liability statement dated August 25, 2004 (served on September 2, 2004) as
also the final fee liability statement drawn up by SEBI on March 14, 2005
and April 20, 2005, appellant had filed Appeal No. 158 of 2012 with Misc.
Application seeking condonation of delay before this Tribunal inter alia
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alleging that the fee liability statement has been issued without considering
the arguments raised on behalf of the appellant. On August 22, 2012 this
Tribunal declined to condone the delay and accordingly the appeal filed by
the appellant was dismissed. Thereupon, appellant filed Civil Appeal Nos.
8472-8474 of 2012 before the Apex Court which was dismissed as
withdrawn on January 14, 2013. Thus, the fee liability of appellant as per
fee liability statement attained finality.

7. Thereafter, the appellant took out Review Application No. 2 of 2013
with Misc. Application No. 33 of 2013 seeking review of our order passed
on August 22, 2012 in Appeal No. 158 of 2012. By order dated July 24,
2013 the Misc. Application as also Review Application was allowed to be
withdrawn. Thereafter once again appellant filed Appeal No. 158 of 2013
with Misc. Application No. 92 of 2013 seeking condonation of delay in
filing appeal against the fee liability statement dated August 25, 2004,
March 14, 2005 and April 20, 2005. Said Misc. Application was dismissed
on October 4, 2013. Consequently, Appeal No. 158 of 2013 was also
dismissed. Thus, it is evident that instead of paying fee liability as per the
fee liability determined by SEBI on March 14, 2005 and April 20, 2005 the
appellant has been initiating proceedings one after the other with a view to
stall payment of fee liability. Since appellant failed to pay the outstanding
fees due and payable to SEBI within 15 days of the receipt of the recovery
certificate dated May 22, 2014, SEBI issued notice to NSE on June 16, 2014
and accordingly, NSE on June 17, 2014 has remitted entire amount to SEBI
from the deposits of appellant lying with NSE.

8. Thereafter, appellant has filed the present appeal in gross abuse of the
process of law. The recovery certificate was issued based on the fee liability
statement dated August 25, 2004, March 14, 2005 and April 20, 2005 which
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were all served on the appellant. Moreover, appellant had repeatedly
challenged those fee liability statements of SEBI by initiating proceedings
one after the other and all those proceedings have been either dismissed or
allowed to be withdrawn by this Tribunal / Apex Court.

9. In these circumstances, since the recovery certificate is in conformity
with the fee liability statements referred to hereinabove and the fee liability
under those statements have already attained finality and in fact SEBI has
received that amount from NSE as per notice of SEBI dated June 16, 2014,
the appeal apart from being devoid of any merit has become infructuous.
Accordingly, present appeal filed in gross abuse of the process of law is
dismissed with costs quantified at Rs. 10,000/- to be paid by the appellant to
SEBI within a period of four weeks from today.


Sd/-
Justice J.P. Devadhar
Presiding Officer



Sd/-
Jog Singh
Member


Sd/-
A.S. Lamba
Member


01.10.2014
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