P.S. Dinesh Kumar, Presiding Officer

These three appeals are directed against order dated 17.04.2014, passed by AO1, SEBI2 imposing a penalty of Rs.6 Crore on Bharatiya Global Infomedia Ltd. ('Bharatiya Global/Company' for short) for violation of Securities laws.

2. Appeal No.476 of 2024 is filed by Mr. Harjeet Singh Anand; Appeal No.477 of 2024 is filed by Mrs. Arti Bhatia; and Appeal No.478 of 2024 is filed by Mr. Sanjay Kapoor.

3. We have heard Mr. Vinay Chauhan, learned Advocate for the appellants. Mr. J. P. Sen, learned Senior Advocate for the SEBI (respondent No.1) and Mr. Shailesh Kumar, learned Advocate for the Company, Bharatiya Global (respondent No.2).

Adjudicating Officer Securities and Exchange Board of India

4. Brief facts of the case are:

                          a) During July 2011, Bharatiya Global came out with an IPO 3.

                          SEBI conducted an investigation based on price fluctuations in Company's scrip, which revealed that the Company had supressed material facts in the offer document and IPO proceeds were transferred to various entities.

                          b) On 28.12.2011, SEBI passed an ex parte ad interim order debarring the Company from raising further capital and debarred its Directors from accessing the securities market.

                          c) The WTM4, SEBI vide order5 dated 07.05.2013, revoked the ex parte ad interim order and exonerated the appellants on the ground that they were Independent/Non- Executive Directors and the investigation did not establish their role in the fraud.

                          d) On 06.05.2013, SEBI issued an SCN6 to the Company and three others alleging violation of Securities laws7. After Initial Public Offering Whole Time Member Dated 07.05.2013 Show Cause Notice Securities and Exchange Board of India Act, 1992; SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003; and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.

                          Adjudication, the impugned order8 was passed against the Company and three others. Feeling aggrieved, the Company and others filed an appeal9 in this Tribunal. This Tribunal vide order dated 25.06.2019, dismissed the appeal and upheld SEBI's order. On appeal, the Hon'ble Supreme Court of India vide order dated 16.09.2019 dismissed the appeal10. Subsequently, a review application11 was filed in this Tribunal and the same was also dismissed12. The Company and others challenged the said order before the Hon'ble Supreme Court of India in Civil Appeal Nos.1379-1380 of 2022. The said appeals stood dismissed by order dated 04.03.2022.

                          e) Even after dismissal of its appeal, the Company did not pay the penalty and SEBI issued notices13 stating that criminal prosecution14 would be initiated.

                          f) On 23.02.2021, a criminal complaint was filed by the SEBI before the Special Court15 against the company and appellants for non-compliance of the impugned order16.

                          Dated 17.04.2014 Review Application No.32 of 2019 On 23.02.2021 First notice dated 20.01.2020 to the Company and the appellants (Harjeet Singh Anand and Arti Bhatia). Second notice dated 27.01.2021 to Sanjay Kapoor.

Under Section 24(1) of the SEBI Act, 1992

5. Mr. Vinay Chauhan, learned Advocate for the appellants submitted that:

                          i. The appellants are independent directors of the Company and had no role to play in the day-to-day affairs of the Company. Any act done by them is approved and ratified by the management of the Company and shareholders.

                          ii. Initiation of criminal prosecution against the appellants is contrary to the observations in WTM's order17.

                          iii. The Company in its resolution18 has undertaken to reimburse the Directors for any liability imposed on them by any authority, while discharging their duties in the interest of the company.

                          iv. In a separate proceedings, wherein it was alleged that the Company had diverted funds to GRD and Korp Groups, the AO, SEBI vide order19 held that there was no diversion of funds. Hence, appellants cannot be held responsible for the penalty imposed against the Company.

Dated 17.04.2014 Para Nos.5 and 6 of order dated 07.05.2013 Dated 30.09.2021 Dated 14.02.2022

6. Mr. J. P. Sen, learned Senior Advocate for the SEBI submitted that:

                          i. SEBI has initiated action to recover penalty imposed in the impugned order. The impugned order has been upheld by this Tribunal and also by the Apex Court. Therefore, a fresh challenge to the impugned order is not maintainable before this Tribunal. A direction to launch prosecution does not affect appellants' personal, pecuniary or proprietary rights and does not make appellants 'an aggrieved person/s' in terms of Section 15T of the SEBI Act. Therefore, these appeals are not maintainable.

                          ii. The power to quash or set aside prosecution proceedings vests with High Court under Section 482 of Cr.P.C and not this Tribunal.

                          iii. Appellants have no locus standi because the impugned order was not passed against them.

                          iv. The Company failed to pay the penalty imposed by the impugned order. Therefore, a criminal complaint was filed against the Company and its Directors including the appellants under Section 27 of the SEBI Act. SEBI's criminal complaint cannot be interfered by this Tribunal under Section 15T of the SEBI Act.

                          v. SEBI has exclusive authority under Section 24(2) and 27(2) of the SEBI Act to initiate prosecution against every Director for non-payment of the penalty.

                          vi. These appeals are filed with an inordinate and unexplained delay of 1,563 days (Appeal No.47620 and 477 of 202421) and 1,187 days (Appeal No.478 of 202422) without showing sufficient cause.

                          vii. Despite their knowledge of penalty since May 2014, appellants approved misleading financial statements denying repeated adverse remarks raised by the Auditors between FY 2013-14 and FY 2023-24 for failure to pay the SEBI penalty.

                          viii. Arti Bhatia23 and Sanjay Kapoor24 filed discharge applications before the SEBI Special Court and the same were rejected. Thereafter, they approached the Hon'ble Bombay High Court under Section 482 Cr.P.C. challenging the framing of charges and the said proceedings are pending.

Mr. Harjeet Singh Anand v. SEBI Mrs. Arti Bhatia v. SEBI Sanjay Kapoor v. SEBI Appellant in Appeal No.477 of 2024 Appellant in Appeal No.478 of 2024

7. Mr. Shailesh Kumar, learned Advocate for respondent No.2 (Bharatiya Global/Company) argued supporting the appellants and opposing SEBI's stand.

8. We have carefully considered the rival contentions and perused the records.

9. In the light of facts recorded hereinabove, the point that arises for our consideration is whether these appeals are maintainable?

10. The first prayer in the appeal is to set aside the impugned order. Admitted position is, SEBI passed the impugned order imposing a penalty of Rs.6 Crores. It was submitted that only Rs.16,88,220/- had been recovered and SEBI has initiated criminal proceedings to recover the remaining amount. It is true that appellants were not parties in the impugned order. The Company challenged the order passed by this Tribunal before the Apex Court in Civil Appeal No.6706 of 2019 and the same has been dismissed on 16.09.2019 with the following order:

                          "O R D E R

                          1. We find no ground to interfere with the impugned judgment and order. The appeal is, accordingly, dismissed.

                          2. Pending application(s), if any, shall stand disposed of."

11. Thereafter, Company filed a review application25 in this Tribunal and it was dismissed vide order dated 23.02.2020. The Company challenged the said order also in the Hon'ble Supreme Court of India in Civil Appeal Nos.1379-1380 of 2022, which were also dismissed26 holding thus:

                          "We have perused the papers and considered the appeals on merits. The review application was filed after the Special Leave Petitions were dismissed by this Court on merits. Once that was so, the High Court was absolutely justified in rejecting the review applications. It is to be noted that what is challenged in the present appeals is the order rejecting the review application, and as held by this Court in a catena of decisions, the appeals against the rejection of the review application alone would not be maintainable. Hence, the Civil Appeals stand dismissed."

12. SEBI's order impugned in this appeal has been confirmed by this Tribunal in the earlier round of litigation. The order passed by this Tribunal has also been upheld by the Apex Court. Therefore, appellants being third parties cannot assail the very same order in these proceedings. In any event, appellants have challenged criminal proceedings initiated against them before the Hon'ble Bombay High Court under Section 482 Cr.P.C.

13. The second prayer is to dispose of this appeal expeditiously. The third prayer is to direct the SEBI not to take coercive steps for recovery of penalty. Since, the appeals are not maintainable, the second and third prayers do not merit any consideration.

Review Application No.32 of 2019 On 04.03.2022

14. The fourth prayer is to direct SEBI to drop appellants' name from SEBI Special Case No.384 of 2021 before SEBI Special Judge, Mumbai. This Tribunal has no jurisdiction over the said Court. Hence, fourth prayer also does not merit consideration.

15. In the result, these appeals fail. Accordingly, we answer the point for consideration in the negative. However, we make it clear that this order shall not preclude the appellants from seeking appropriate remedy before any appropriate forum as may be permissible in law.

16. Hence the following:

ORDER

                          i. Appeal Nos.476, 477 and 478 of 2024 are dismissed.

                          ii. Pending interlocutory application(s), if any, stand disposed of.

                                iii. No costs.