Amit Bhutra And Others vs Securities And Exchange Board Of India

Tarun Agarwala, Presiding Officer

We have heard Shri Somasekhar Sundaresan, the learned counsel for the appellant and Shri Shiraz Rustomjee, the learned senior counsel for the

respondent. The present appeal has been filed against an ex parte ad interim order dated May 31, 2021 whereby a slew of directions have been issued

by the Whole Time Member (‘WTM’ for short) of the Securities and Exchange Board of India (‘SEBI’ for short) after prima facie

finding that the appellant was engaged in insider trading and therefore violated the provisions of the Securities and Exchange Board of India Act, 1992

and other Regulations for trading in the scrip of Infosys Ltd. in July 2020 during the pandemic period. Some of the directions are that the unlawful gain

amounting to Rs. 3,06,33, 348/- should be deposited in an escrow account and further they have been debarred from accessing the securities market

till further orders.

The prime contention of the appellant is, that the impugned order has been passed on a mere suspicion without giving notice to the appellant and

without getting the matter adjudicated, namely, as to whether the appellant is guilty of insider trading and whether the unlawful gain has been correctly

calculated.

We have been informed that pursuant to the impugned order, the alleged unlawful gains have been deposited by the appellant in an escrow account

under protest. It was, thus, contended that the appellant should be allowed to continue to trade in the securities market as they are investors and at

best they could be restrained only with regard to the trading in the scrip of Infosys Ltd.

Be that as it may. We are of the opinion that before this Tribunal deals with the issues that has been raised by the appellant with regard to the

urgency or otherwise in passing of the impugned order and in issuing the directions, it would be appropriate for the appellant to file their reply along

with an application for vacating the directions so issued by the WTM.

In view of the aforesaid, we dispose of the appeal at this stage directing the appellant to file an appropriate reply along with the stay vacating

application within a week from today. If that is done, the WTM will give an opportunity of hearing and thereafter pass an appropriate order within

three weeks.

The present matter was heard through video conference due to Covid-19 pandemic. At this stage it is not possible to sign a copy of this order nor a

certified copy of this order could be issued by the registry. In these circumstances, this order will be digitally signed by the Private Secretary on behalf

of the bench and all concerned parties are directed to act on the digitally signed copy of this order. Parties will act on production of a digitally signed

copy sent by fax and/or email.