Cynthia Pinto De Andrade And Others vs Securities And Exchange Board Of India And Others

Meera Swarup, Technical Member

Four Appeals no. 390 to 393 of 2021 were filed by Ms. Cynthia and Ms. Lucille Pinto De Andrade as legal heirs of Late Mr. Michael Pinto De Andrade, Mr. Carl Pinto De Andrade, Ms. Shreya Pinto De Andrade and Ms. Cynthia Pinto De Andrade (collectively referred to as „Pinto Group‟) whereby the Appellants have sought to challenge communication dated March 17, 2021 passed by Respondent No. 1, Securities and Exchange Board of India („SEBI‟ for short) disposing of the complaints filed by the Appellants on SCORES Platform of SEBI in terms of this Tribunal‟s order dated January 20, 2021 in Appeal nos. 129 to 132 of 2020. The other respondents in these appeals are Ventura Securities Ltd. (Respondent No. 2) and Mr. Ameet Savant (Respondent No. 3).

Similarly, Mr. Nelson Thomas D‟Silva has filed Appeal no. 569 of 2021 challenging communication dated June 11, 2021 passed by Respondent No. 1 (SEBI) disposing of the complaints of the Appellant made on SCORES Platform of SEBI. Another Appeal no. 699 of 2021 was filed by the Ms. Catherine D‟Silva, wife of Mr. Nelson D‟Silva, challenging communication dated September 24, 2021 (hereinafter referred to as „D‟Silva Group‟) issued by the National Stock Exchange of India Limited („NSE‟ for short) disposing of the complaint made on the SCORES platform of SEBI.

As the subject matter of all these six appeals is the same, all the appeals are hereby taken up together. The Appellants have alleged that they invested large sums of money from their precious savings (Rs. 5.85 crores by Pinto Group and Rs. 2.40 crores by D‟Silva Group) during the period May 2016 to October 2018 in fixed income scheme with a return of 2% per month (Pinto Group) and Index Option Scheme with a stop loss of 4% (D‟Silva Group) with Ventura Securities Ltd. (VSL), a registered stock broker with NSE, through Mr. Ameet Savant, an Authorised Person (AP) of VSL. After an initial lock-in period, the schemes had an open option of redemption.

Initially, the Appellants received various amounts as returns against their investment, however, once they made redemption requests, the investments of the Appellants were not redeemed. The Appellants filed various complaints with SEBI and NSE. The Appellants also filed Commercial Summary Suit No. 1231 of 2019 (Pinto Group) on September 9, 2019 and Suit No. 95 of 2021 (D‟Silva Group) on August 10, 2021 in Bombay High Court. The complaints of the Appellants were closed by SEBI and NSE holding that the Appellants were not registered with VSL and their money was invested with Mr. Ameet Savant who was giving the Appellants fixed returns. Mr. Ameet Savant was being investigated by SEBI and Economic Offence Wing (EOW), Goa. Further, the Appellants have already filed Commercial Summary Suits with Bombay High Court and since the matter is sub-judice the complaints were treated as closed.

Earlier, Appellants in Appeal nos. 390 to 393 of 2021 filed Appeal nos. 129 to 132 of 2020 before this Tribunal. By an order dated January 20, 2021 of this Tribunal, the matter was remitted back to SEBI to reconsider the complaint of the Appellants and decide the same in accordance with law in the light of the observations made. The order reads as:-

“2. Having heard the learned counsel for SEBI Shri Anubhav Ghosh and Shri P.N. Modi, the learned senior counsel for Ventura, Respondent No. 2, we find that admittedly Mr. Ameet Savant was a registered sub-broker of Ventura. Whether Mr. Ameet Savant had received money as a proprietary concern or on behalf of the principal, namely, Ventura is something which is required to be investigated. The appellants have alleged that the monies given to Mr. Ameet Savant eventually came into the accounts of Ventura. This fact also required to be investigated. The mere fact that the Mr. Ameet Savant is separately been investigated by SEBI is not sufficient. These complaints cannot be disposed of in a summary manner.

We accordingly set aside the impugned communication given to the appellants and remit the matter to SEBI to reconsider the complaints of the appellants and decide the same in accordance with law in the light of the observations made above preferably within a period of two months from today. All the appeals are allowed. No order on costs.”

We have heard Shri Ankit Lohia, the learned counsel with Mrs. Yasmin Bhansali, Ms. Prachi Singh and Shri Ashutosh Agarwal, the learned counsel for the Appellants and Shri Pradeep Sancheti, the learned senior counsel with Shri. Manish Chhangani, Ms. Samreen Fatima, Shri Simil Suresh Purohit, Shri Abdul Wahab A.H. Mukri, Shri Jahaan Dastur, Shri Rashid Boatwalla and Shri Juan D‟Souza, the learned counsel for the respondent in respective appeals.

We note that the impugned communication of SEBI dated March 17, 2021 reads as “As per SAT direction case is pursued based on available info with SEBI”. This clearly indicates that the SEBI did not investigate the matter as per order dated January 20, 2021 of this Tribunal. Despite a clear direction that their complaints cannot be disposed of in a summary manner, the case was disposed off summarily without carrying investigation as to whether Mr. Ameet Savant received monies from the Appellants as a proprietary concern or on behalf of VSL or whether monies given to Mr. Ameet Savant eventually went into accounts of VSL.

Admittedly Mr. Ameet Savant was the authorized person representing VSL in Goa. Further, in its affidavit in reply to the Appellants Appeal nos. 390 to 393 of 2021, VSL has admitted to having received some of the monies of Appellants through their representative Mr. Ameet Savant. NSE vide its letter dated December 12, 2020 to Economic Offences Cell, Goa has stated that there were non-compliance on part of VSL. The letter also indicates that not only the six appellants but other investors from Goa have also made complaints against VSL and its Authorized Person Mr. Ameet Savant. Prima facie, it appears that VSL is involved with Mr. Ameet Savant and that the amount received by Mr. Ameet Savant was on behalf of VSL. It thus, appears that both VSL and Mr. Ameet Savant were indulging in fraudulent and unfair trade practices, which needs to be investigated under the Securities Laws. The fact that the appellants have filed suit for recovery of money has nothing to do with violation of the Securities Laws.

Thus, there is sufficient ground to hold that a detailed investigation by SEBI and / or NSE is required to investigate the complaints made by the Appellants against VSL and its Authorized Person in Goa, Mr. Ameet Savant.

We, accordingly, set aside the impugned communication dated March 17, 2021 and June 11, 2021 of SEBI and dated September 24, 2021 of NSE and direct SEBI to register the complaints of the appellants and conduct a detailed investigation preferably within a period of three months from today after giving an opportunity of hearing to the appellants. We also impose a cost of Rs. 10,00,000/- (Rupees Ten Lakh only) on SEBI for failing to investigate the complaints of investors against the trading member despite the order of this Tribunal dated January 20, 2021. The amount may be deposited with the Registrar of this Tribunal within one month of this order. The miscellaneous applications are also disposed of.

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. Certified copy of this order is also available from the Registry on payment of usual charges.