sebi:WTM/MSS/SRO/86/11

SEBI · SEBI · 2010-03-18 · M. S. Sahoo, Whole Time Member

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Facts / Headnote

Request to keep proceedings in abeyance rejected; hearing of SCNs to proceed on merits

Provisions invoked

• s. 11
• s. 164

Parties

• Shri Talluri
• Shri Gopalakrishnan
• Price Waterhouse (PW) entities

Holding

The noticees' request to keep the SEBI adjudication proceedings under Sections 11 and 11B of the SEBI Act in abeyance pending conclusion of related criminal trials was rejected. The proceedings were held not to attract Article 20(3) and not to be equated with departmental proceedings, and the requirements for a stay were not satisfied.

Full text

Page 2 of 9 control of Institute of Chartered Accountants of India (ICAI). He stated that he adopted the submissions made on behalf of the Price Waterhouse (PW) entities, of which the noticees are partners, regarding jurisdiction of SEBI over Chartered Accountants. He made an alternative submission that the proceedings may be kept in abeyance till the conclusion of the criminal trials. The allegations in the SCNs are substantially similar to the charges filed by CBI against Shri Talluri in three criminal proceedings before the Special Court, and, therefore, his reply in the present proceedings on merits would amount to disclosing his defence which would seriously prejudice him in the criminal trials. The hearing could not be completed on that day and was adjourned to 18th June, 2010, which was postponed to June 25, 2010. Shri Talluri did not appear for the hearing on June 25, 2010.

Page 3 of 9 5. The learned Advocate accepted the position that the jurisdiction issue had been decided by the Hon’ble Bombay High Court against the noticees and that this issue no longer survived. He also stated that the noticees were no more in custody and that the issue of incapacity to respond to the SCNs no longer survived. However, he submitted that the proceedings by SEBI may be kept in abeyance till the conclusion of criminal trials as the rights of the noticees available under Article 20 (3) of the Constitution would be violated and their defence in criminal proceedings would be prejudiced if they were to make any submission on merits of the matter raised in the SCNs before the conclusion of the criminal trials. In support of his contention, he relied on the judgment of the Hon’ble Supreme Court in the case of Capt. M. Paul Anthony vs. Bharat Gold Mines Ltd. and another (1999) 3 SCC 679 (Anthony case).

Page 4 of 9 the criminal charge that may be pending against him ? The answer cannot but be an emphatic 'no'. The cardinal point involved in the protection of Article 20(3) relates to the question of compulsion. There is no question of compulsion in the defendant's filing a written statement in the civil suit or in examining himself as a witness to protect his own interest in such suit….. These decisions of the Supreme Court in Dushyant Somal v. Sushma Somal (supra) and T.G. Gaokar v. R.N. Shukla (supra), amongst others, demonstrate that it is wholly untenable to say that the continuance of a civil suit or a departmental proceeding during the pendency of the criminal case relating to the same matter will be violative of Article 20(3) which affords protection against testimonial compulsion. The position in law is very clear that if an accused makes any statement not under any compulsion in the sense in which the term has been referred to in Article 20(3) but voluntarily for the purpose of his own convenience or for protecting his own interest or for any reason whatsoever including the purpose of inviting punishment even, as happens when he voluntarily pleads guilty or makes confession under Section 164 Cr PC, that does not bring the case within the ambit of Article 20(3). We therefore reiterate that the accused cannot stall a civil suit or a departmental proceeding during the pendency of a criminal proceeding on the ground of Article 20(3) of the Constitution which is not at al

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