In rejecting the appeal of Reliance Industries against an order of the markets watchdog, the appellate tribunal also observed it was due to a retrospective ordinance it was forced to take such a stand, however highhanded it found the action to be.
The Securities Appellate Tribunal (SAT) in its latest order said under normal situation it would have admitted Reliance appeal challenging the process followed by Securities and Exchange Board of India (SEBI) to settle a November 2007 case of alleged unfair trade practice.
But it was left with no option but to dismiss the appeal due to an ordinance of 2014 that bars -- retrospectively from April 2007 -- any appeal against an order passed in consent proceedings. Otherwise, it said, the appeal was maintainable.
The tribunal has also made several observations questioning the watchdog's role.
It said the watchdog ought to have given Reliance Industries at least one opportunity to present its case since copies of inspection documents running into 1,300 pages were given to it only after nearly two years, in the last week of November 2012.
Accordingly, the tribunal also observed that the request of the appellant in seeking postponement of the meeting before the inspection committee scheduled on Dec 7, 2012, till the third week of January 2013 was not reasonable.
"Undue haste shown by the officers of SEBI in disposing of the consent application even before disposal of Appeal No. 224 of 2012... shows total highhandedness on part of SEBI in handling the present case."
In another observation, it held it was the markets watchdog that stalled the proceedings by taking over two years to hand over copies of inspection documents to the appellant, and not the other way around.
It said the argument of SEBI that rejection of consent application has not caused any prejudice to Reliance and that the company was entitled to raise its grievances in the regular proceedings was without any merit.
"Therefore, the inordinate delay on the part of SEBI to give inspection of documents and disposing of the consent application, even before giving full inspection of documents, has not only caused prejudice to the appellant but also led to miscarriage of justice."
It also said: "Accordingly, we hold that SEBI was not justified in rejecting the consent application without giving an opportunity to the appellant to present its case for settlement of the dispute."
The markets watchdog had alleged that Reliance Industries made illegal gains by dealing in the shares of its former hydrocarbon arm Reliance Petroleum in 2007 before the entity was merged with it.
As per the watchdog's regulations, a defaulter can be imposed a fine of Rs.25 crore or three times the established illegal gains.
