The Supreme Court has on Monday given interim relief to NDTV promoters Prannoy Roy and Radhika Roy. The court directed Securities Appellate Tribunal to hear their appeals, and not to insist on pre-condition of deposit to hear their appeals, against the penalty imposed by SEBI for insider trading.
The court was hearing the appeal against the Securities Appellate Tribunal’s (SAT) direction to NDTV promoters Prannoy Roy and Radhika Roy to deposit 50 per cent of the disgorged amount before markets regulator SEBI within four weeks.
A three-judge bench headed by the Chief Justice S. A. Bobde, and Justices A. S. Bopanna & V. Ramasubramanian has said “The appeal which is stated to be heard on 4th March by the Tribunal, it is directed that no amount is to be recovered forcefully from the appellant till he is heard. This order shall not be a precedent.”
During the hearing, the Solicitor General Tushar Mehta appearing for SEBI said he has an objection against the maintainability.
CJI said, we are of the view they can be allowed to give security of their shares.
To which, Solicitor General replied and said all their shares are frozen and cannot be traded. They are restrained from creating encumbrance on their shares.
The court said, this is a deposit and not an encumbrance or pledge, which is liable to be returned.
The Solicitor General said, the deposit of money is a condition precedent for grant of stay on the direction of SEBI.
Rohatgi appearing for Roys replied, I don’t have any other security. If there is no stay, my properties will be attached.
The court directed,
“the appeal which is stated to be heard on 4th March by the Tribunal, it is directed that no amount is to be recovered forcefully from the appellant till he is heard. This order shall not be treated as a precedent.”
In two separate orders passed on January 4, the tribunal noted that the appeals filed by the petitioners needed consideration and directed the appeals to be listed before the tribunal for final disposal on February 10, 2021.
The petitioners had filed an appeal before SAT against a SEBI order passed in November, whereby the markets regulator had barred them from the securities market for two years and also directed them to disgorge illegal gains of Rs 16.97 crore for indulging in insider trading more than 12 years ago.
The Securities Appellate Tribunal (SAT) had directed the appellants to deposit 50% of the disgorged amount before the respondent/SEBI within four weeks. “If the said amount is deposited the balance amount shall not be recovered during the pendency of the appeal. The amount so deposited would be kept in an interest bearing account and would be subject to the result of the appeal,” said by the SAT in its Order dated 4th January, 2021.
The Roy couple challenged the said order before the Supreme Court. In an order dated 29th January, 2021, the Senior Advocate Mukul Rohatgi appearing for the NDTV promoters had made an undertaking to file statement of shares indicating their market value which they are willing to offer as security in lieu of the deposit offered by the Securities Appellate Tribunal.