SEBI had, on December 24, 2020 imposed Rs. 27 crore penalty on the three NDTV promoters- Prannoy Roy, Radhika Roy and RRPR Holding Limited on failure of disclosing the price sensitive information shareholders of NDTV.
The Apex Court in the recent hearing stayed the recovery of penalty of Rs 27 crore imposed by SEBI on NDTV promoters for not disclosing the price sensitive information with the NDTV shareholders.
Background of the Case
The SEBI had on December 24, 2020 imposed Rs. 24 crore penalty on the three NDTV promoters – Prannoy Roy, Radhika Roy and RRPR Holding Limited for not revealing the price sensitive information to the shareholders of NDTV.
While a Rs. 25 crore penalty was imposed jointly and severally on all three promoters, Rs. 1 crore each was directed to be paid separately by Prannoy Roy and Radhika Roy. Roy then approached to SAT via appeal.
It was pronounced on February 15 by SAT, that if Roys deposit 50 percent of the amount minus interest within four weeks, then the balance amount shall not be recovered amid pendency of the appeal.
“The matter would be listed for admission and for final disposal on April 6, 2021. In the meanwhile, if the appellant deposits 50 percent of the amount minus interest within four weeks from today, the balance amount shall not be recovered during the pendency of the appeal”, the SAT order stated.
The above stated order was challenged by the promoters in the Apex Court.
Observation of the Court
The Hon’ble Supreme Court observed that the SAT has failed to give any reasoning behind the conditional order.
“SAT had furnished no reason for its conditional order directing the deposit of half the penalty. SAT is amenable to the appellate jurisdiction of this court. Unreasoned orders do not facilitate judicial oversight by a superior court”, the apex court observed.
The Court noted that it would have resend the matter back to SAT to provide its reasoning for its order, as it is done in normal course of nature, however the appeals are to be finally disposed off on April 6, the apex court said that it would pass an order without sending it back to SAT to re- refer its earlier order.
Thus, the order passed by the SAT was amended by doing away with the condition to deposit 50 percent penalty.
“The order passed by the Tribunal on 15 February 2021 requiring a deposit of 50 percent of the penalty shall accordingly stand substituted by a direction that pending the hearing and final disposal of appeals before SAT, there shall be a stay on the recovery of the penalties which have been imposed by the Whole Time Member of SEBI in the order dated on 24 December 2020” the Supreme Court ordered.
Case Details
Before: Hon’ble Supreme Court
Case Title: Radhika Roy v. SEBI
Coram: Hon’ble Justice DYChandrachud, Hon’ble Justice MR Shah
Read Order@LatestLaws.com
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