Securities Appellate Tribunal has set aside an order passed by Sebi against two individuals, saying that they were not given an opportunity of hearing.
The market regulator has also been directed to pass appropriate order after giving an opportunity of hearing to the appellants.
The order passed against two individuals -- Bimal Kumar Jha and Rakesh Kumar -- with regard to a case involving Weird Infrastructure Corp to refund over Rs 16 crore, which it raised illegally from investors, along with 15 per cent interest.
Sebi had asked the company as well as 13 directors, including these two individuals, to refund the money.
However, Bimal Kumar Jha and Rakesh Kumar appealed against the order stating that they were not the directors of the company although on the "website of Registrar of Companies (RoC)/Ministry of Corporate Affairs (MCA) Form DIR-2 is uploaded with the signatures of the appellants to act as directors".
They claimed that the signatures were forged.
Besides, they alleged that they were not served with the notices of hearing before passing the order.
Citing a paragraph in the impugned order passed in July last year on the matter, the tribunal said "it is seen that on September 24, 2014 ex-parte interim order was passed against the company and its directors wherein the names of the appellants do not appear".
Further, the Securities Appellate Tribunal said nothing is recorded in the impugned order to suggest that subsequent to the September 2014 interim ruling that Sebi's Whole Time Member "deemed it necessary to treat the appellants as directors of the company and accordingly issue notice to that effect to the appellants".
Since there is no finding recorded in the impugned order to the effect that the notice of hearing was in fact served upon the appellants, the tribunal said the same cannot be sustained.
"In these circumstances, we quash and set aside the impugned order dated July 24, 2015 in so far as it relates to the appellants are concerned...," the tribunal said.
