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The Supreme Court on Thursday asked the Securities Appellate Tribunal (SAT) to hear Kimsuk Krishna Sinha, a former business partner of DLF, before passing any directions on the realtor’s appeal. It set aside a SAT order rejecting Sinha’s move. DLF is contesting an order by the Securities and Exchange Board of India (Sebi) banning it from the securities market for alleged irregularities in disclosure during its initial public offering (IPO) in 2007. “The SAT order has been kept in abeyance. The court has directed that I be heard in the matter. SAT can pass the order only after it has heard me,” Sinha’s lawyer Rajneesh Chopra told Business Standard after the hearing.
The move could further delay relief for the real estate firm, which submitted its argument in the SAT on Thursday. DLF lawyers argued that the punishment was disproportionate and similar to capital punishment.
Sinha is the original complainant in the matter of alleged irregularities in the disclosures made by DLF in its IPO document.
SAT adjourns DLF hearing
The SAT adjourned a hearing of DLF to Friday. A counsel for Sebi will argue on Friday.
Last week, SAT had declined to allow the intervention by Sinha after the DLF lawyers had argued such interventions should only be if a broader investor concern is being addressed. The DLF counsel said allowing an intervention would only support Sinha's cause and not that of any investor.
Sinha had first complained to Sebi in 2007 about non-disclosure of a police complaint filed by him against Sudipti Estates (SEPL), then an associate of DLF. Sinha, SEPL, and one Praveen Kumar signed a tripartite agreement to develop a piece land in Bandhwari village near Gurgaon. That deal soon soured and turned into a dispute, leading to the complaint.
While Sebi initially did not probe deep into the matter, it initiated investigation after Sinha won directions from the Delhi High Court. The Delhi High Court order dated April 2010 directing Sebi to investigate the matter describes some of the events.
“According to the petitioner, DLF and SEPL 'ensnared and cheated' him of a sum of Rs 31.09 crore towards sale proceeds of certain lands. An FIR (first information report) was registered at the instance of the Petitioner against SEPL on 26 April 2007. The Petitioner addressed a letter on 4 June 2007 to Sebi in this regard. According to the Petitioner, he was dismayed by the response of Sebi dated 25 June 2007 in which it was stated that his letter had been forwarded to SEPL and DLF for their responses,” it said.
