The Supreme Court on Wednesday dismissed Sebi’s appeal against the Securities Appellate Tribunal’s order that quashed its choice to impose Rs 7-lakh penalty on the NHAI for the delay in filing economic final results. The tribunal had let off the authority with just a warning.
A Bench led by justice LN Rao upheld the SAT’s August 27 order that had termed the imposition of penalty as “harsh and excessive” immediately after noting violations of the Listing Obligations and Disclosure Requirement (LODR) Regulations. The tribunal had granted relief to NHAI “in the peculiar facts and circumstances” of the case and had stated that it should really not be treated as a precedent for other matters.
The regulator had in May levied the fine on NHAI as it did not submit the mandated economic final results on time for the half-year ended September 30, 2018, and March 31, 2019, as expected beneath the LODR Regulations. The Sebi’s order was challenged by the NHAI just before the tribunal.
Sebi told the SC that the SAT’s order was “wholly erroneous and unsustainable” and also the tribunal had erred in law in converting the monetary penalty to a mere warning immediately after upholding its findings. The market place regulator stated that there was no provision for offering relaxation beneath Regulation 52 of the LODR.
Attorney basic KK Venugopal told the SC that SAT’s remarks that the penalty imposed by Sebi’s adjudicating officer was “harsh and excessive” was “unwarranted and disparaging” as Sebi had immediately after a detailed consideration of the supplies on record unequivocally discovered that there was repeated failure of compliance with the LODR Regulations by NHAI which continued even immediately after the Sebi’s advisory.
Sebi in its appeal filed by means of counsel Pratap Venugopal additional stated that SAT by converting the monetary penalty into a mere warning had travelled beyond the provisions of Section 15T(4) of the Sebi Act, 1992, which limits its powers to only confirming, modifying or setting aside of the Sebi’s impugned orders.
The tribunal even though granting relief to NHAI had stated that the PSU getting governed beneath the NHAI Act warranted involvement of a huge quantity of members who are very ranked officials appointed by the government and simultaneously discharge their duties beneath numerous other portfolios. “It thus becomes slightly tedious and cumbersome to ensure that all the members of the board meeting come together under one roof and get the audited or unaudited financial results approved before the stipulated period,” the tribunal stated, adding that at instances it was beyond the manage of the NHAI officers to enforce strict compliance of the Sebi’s norms.
According to the tribunal, Sebi should really have taken this element into account even though contemplating the application for extension of time to file the economic final results.
The adjudicating officer had held that there was repeated failure on the aspect of NHAI in not filing the returns on seven occasions from 2015-2019. It rejected the NHAI’s contention that the procedural delay can not be taken as a mitigating element for relaxation of the period for filing the unaudited economic final results.