Last week, the Securities & Exchange Board of India (SEBI) Special Court while rejecting bail plea of Ketan Parekh (KP), prime accused in the securities scam of 2000-2001, ordered day-to-day hearing and pre-ponement of cases pending against Mr Parekh. The Court said the trial will begin on 15 November 2017 on day to day basis. Earlier, in arguing his bail plea, Mr Parekh tried to put the blame (for miscommunication and thus his non-appearance before the Court) on his previous lawyer, but the Court dismissed his arguments.
In a detailed order, Special Judge MG Deshpande, dismissed Mr Parekh's argument citing many instances where his lawyer not only appeared and defenced Mr Parekh but also secured a cancellation of non-bailable warrant (NBW) against him. "It is evident from the record that accused no5 (KP) never appeared before the Court...Still my Learned Predecessor many times believed the words of Learned Advocate (Sandip Parekh) for the accused and stayed the orders of warrants and proclamation, in a hope that these accused would never expose their lawyer that he gave false assurance across the bar on their behalf and got the warrants stayed. Therefore, I hold that no blame can be put on the earlier Counsel for accused, when accused No5 (KP) has proved his tendency to show utter disregard to the legal process," the Order says.
There are a large number of cases pending against Mr Parekh who has already served a 14 year ban under SEBI orders. The Court order noted this and said, "It cannot be ignored that there are near about 25 to 30 proceedings pending in this Court against this accused No5 (KP). In some of the said matters, he engaged Advocate Parekh and also got bail orders without even personally appearing before the Court...When there are near about 25 to 30 proceedings pending against accused no5 (KP), he ought to be very careful, punctual and vigilant for the Court Proceedings. His duty was to conduct the case and contact his lawyer in proper...whatever reasons given by the accused no5 (KP) in paragraphs 2 to 7 of the application are feigned, behind the back of those, the then Advocates, who garbed and shielded his absence."
The Court observed that market regulator SEBI has been hunting Ketan Parekh since the past over three years. There were a number of warrants issued, which SEBI tried to serve upon all the accused to their known addresses. However, all accused purposely evaded these warrants. "Inspite of relentless pursuit to serve and execute the legal process, he always gives the Court the slip. This glaringly indicates his (KP) tendency to show utter disregard for legal process," the Court said, adding, proclamation was the only last resort to secure his (KP's) appearance.
Ketan Parekh's new counsel contended that this was a simple private complaint under Section 200 of the Criminal Procedure Code (Cr PC) and the question of any investigation does not arise and KP's presence will suffice for the trial. Justice Deshpande, however, rejected the contention saying, "There are rare Sections in Indian Penal Code, which provide such huge fine of Rs25 crore. Merely the SEBI cases were dormant when pending before the Metropolitan Magistrate Court, will not minimize the gravity of the offence and punishment prescribed under SEBI Act. I am constrained to note that it took more than three years to force the appearance of accused no5 (KP) in this case, which is very simple case under section 200 (CR PC) as argued by Advocate Sanjog Parab...It is significant to mention that from 29 October 2001, Section 24 of the Act, was amended and provides imprisonment extending up to 10 years or with fine up to Rs25 crore or both. This shows that the Legislature has viewed the offences under SEBI Act very seriously and not simple as argued by Advocate Parab."
The Court also raised questions on all accused, especially their overseas travelling against restraints put up SEBI. It said, "There is serious allegation of SEBI that none of the accused could leave India without permission of the Court and it is the main condition imposed on them when they were released on bail. Inspite of the same, all the accused travelled abroad by making breach of said condition. In this background, the Court directed the accused persons to produce their passports to find out whether they committed any breach of the orders of bail. The accused have not filed any details of passports and contended that the same are with the Central Bureau of Investigation (CBI). According to SEBI, they are collecting evidence to show that accused travelled abroad."
"...I am of the opinion that this case independently or along with other cases of accused no5 (KP) can be tried on top priority, on day to day basis without which trial is no possible. The Court is ready for the same and expects possible response from accused no5 to try the case by framing charges. Hence I am of the opinion that fate of trial is not safe if accused no5 is release on bail," Justice Deshpande said in the order.
The Court then ordered a day to day trial from 15 November 2017 .
Ketan Parekh was accused of indulging in circular trading and was convicted for stock manipulation in 2008. In 2009, SEBI banned 26 entities post its investigation that revealed how several companies and brokers were indulged in circular trading on behalf of Mr Parekh.
Later, in March 2014, a Special Court of Central Bureau of Investigation (CBI) had convicted Mr Parekh for cheating and sentenced him to two years of rigorous imprisonment.
The advertisement/ proclamation ordered last month by the SEBI Special Court had taken, the market by surprise since many believed that Mr Parekh was now free to trade having completed the SEBI's 14-year ban. Parekh is Director of Panther Fincap and Management Services Ltd.
