ORDER
Kumar Rajaratnam, J. (Presiding Officer)
1. The appeal is taken up with consent of parties.
2. Heard the counsel for the appellant and the counsel for the respondent. The appellant challenges the impugned order which reads as follows :
“In view of the above, it is clear that DK Dalai manipulated the price of JRAL. The manipulation was done by DK Dalai in connivance with promoters and directors of JRAL and Vrushti Financial Services which is unambiguously clear from movement of funds from JRAL and Jyoti Cosmetic to DK Dalai controlled entities, purchase in name of UIPL, statement of accomplices of DK Dalai including Mr. Bakshi and Mr. Thakkar directors of Vrushti about modus operandi used by DK Dalal etc. The aforesaid manipulative acts of Vrushti and its directors and promoters are in violation of Regulation 4(a) and (d) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995. It is pertinent here to mention that SEBI has taken appropriate action against M/s. Manyog Investments, Raj Investments & its partners, Jyoti Resins & Adhesives Ltd. and its directors for dealing in shares of Jyoti Resins and Adhesives Ltd. in connivance with DK Dalal. Therefore, in the interest of investors and safety and security of the capital market, in exercise of powers conferred on me under Section 4(3) read with Sections 11 and 11B of SEBI Act, I, hereby direct Vrushti Financial Services Pvt. Ltd. and its directors Shri Shailesh Thakkar, Shri Kayur Bakshi and its promoters to dissociate themselves in every respect from the capital market related activities and not to access the capital market for a period of one year.”
3. Various contentions were raised before the Tribunal. However, it is not necessary to go into each of the contentions raised by the appellant as we wish to dispose of this matter on the ground of violation of principles of natural justice.
4. It is submitted that the appellant was never served with any show-cause notice nor was any opportunity given to the appellant before the impugned order was passed. It was further submitted that the appellant is a nominal director and was not involved in the day-to-day affairs of the company.
5. It appears to us from the records placed before us that the appellant was not served with any show-cause notice. In that view of the matter, we have no alternative except to set aside the impugned order insofar as the appellant is concerned and direct the respondent to dispose of the matter afresh in accordance with law. All contentions are left open in the event the respondent wishes to issue a fresh show-cause notice.
6. It is also brought to our notice that the period of ban imposed in the impugned order has already spent itself out. Be that as it may, since the appellant has raised the important question of principles of natural justice the impugned order, as stated earlier, is set aside only insofar as the appellant is concerned. The respondent is at liberty to issue fresh show-cause notice to the appellant, if they so desire.
7. Accordingly the impugned order is set aside. No order as to costs.