My Article titled as 'Doing CIS activity in Guise of Running Real Estate Business: A Case Study' published and displayed by the Taxmann. Citation: [2016] 68 taxmann.com 72 (Article)
Doing cis activity in guise of running real estate business a case studyCS (Dr)Rajeev Babel
My Article published and displayed by the Taxmann.
Citation: [2016] 68 taxmann.com 440 (Article)
SEBI (Collective Investment Schemes) Regulation, 1999 provides details of compulsory registration, business activities and obligations, trustees and their obligations, collective investment scheme, general obligations, inspection and audit, etc., of Collective Investment Management Company.
The present article is a case study of PACL Ltd., which in guise of running real estate business, was actually running sham Collective Investment Schemes (CIS) which were detrimental to interest of investors. SEBI directed PACL to wind up its existing CIS and to refund money collected from investors with promised return, which was challenged in SAT by the company, but SAT justified the decision given by the SEBI.
PPT for the interactive session at the Institute of Cost Accountants of India Delhi on 7th Jan 2017 on the Role of Insolvency Professionals under Insolvency and Bankruptcy Code 2016
Given the disruption caused by Covid-19 pandemic, the performances under many contracts will be delayed, interrupted or even suspended.
Many of the corporate tenants in commercials lease may seek to delay and/or waive the commercial rentals for the duration especially during the 21 days lockdown. This unprecedented Covid-19 has legitimately prevented them from carrying out their business.
Doing cis activity in guise of running real estate business a case studyCS (Dr)Rajeev Babel
My Article published and displayed by the Taxmann.
Citation: [2016] 68 taxmann.com 440 (Article)
SEBI (Collective Investment Schemes) Regulation, 1999 provides details of compulsory registration, business activities and obligations, trustees and their obligations, collective investment scheme, general obligations, inspection and audit, etc., of Collective Investment Management Company.
The present article is a case study of PACL Ltd., which in guise of running real estate business, was actually running sham Collective Investment Schemes (CIS) which were detrimental to interest of investors. SEBI directed PACL to wind up its existing CIS and to refund money collected from investors with promised return, which was challenged in SAT by the company, but SAT justified the decision given by the SEBI.
PPT for the interactive session at the Institute of Cost Accountants of India Delhi on 7th Jan 2017 on the Role of Insolvency Professionals under Insolvency and Bankruptcy Code 2016
Given the disruption caused by Covid-19 pandemic, the performances under many contracts will be delayed, interrupted or even suspended.
Many of the corporate tenants in commercials lease may seek to delay and/or waive the commercial rentals for the duration especially during the 21 days lockdown. This unprecedented Covid-19 has legitimately prevented them from carrying out their business.
2018 was an interesting year for legal changes in corporate, finance and technology sector and the “Way of Doing Business” in India which dominated the headlines and we can expect 2019 to continue in the same way. Our article- Key Legal Developments in 2018 highlights some of the key legal changes of 2018 that you should take the time to understand and be prepared for. It’s important for any business owner to be aware of the changes affecting their business & put in place suitable safeguards. Failing to be prepared is often costly in terms of money, resource & time.
Objectives & Agenda :
The primary objective of Insolvency and Bankruptcy Code (IBC) is the resolution of distressed assets of the insolvent debtor in a time bound structured manner and to enable such insolvent entity to continue as a going concern. IBC emerges as a fast track mechanism in completion of insolvency proceedings and aims at maximising the value of the assets of an insolvent entity. The Supreme Court judgement on Essar Steel is a landmark judgement that affirms the principles of IBC. The webinar analyses the key aspects of the judgments delivered by all the judicial forums viz. National Company Law Tribunal (NCLT), National Company Law Appellate Tribunal (NCLAT) and the Honourable Supreme Court in Essar Steel case.
Covers all the issues related to Insolvency Laws and also compares the steps taken by other countries in Insolvency Laws. Views on the impact of COVID-19 on IBC laws are discussed.
“Global Regulatory Update” is a compilation of global and domestic news, opinions on regulatory issues, CII initiatives and representations on regulatory issues. The Update is aimed at keeping CII membership apprised of developments in the international and domestic corporate governance and regulatory landscape.
PPT on Insolvency and Bankruptcy Code, 2016 analysis the jargons, processes, access, limitations, opportunities, etc. A bried comparison with US Bankruptcy Code has also been stated and addressing issues like cross border insolvency amongst others issues. Also, the probe of recently notified transfer of pending proceedings has been made in the presentation.
The Insolvency and Bankruptcy Code 2016 - A Step ForwardSumedha Fiscal
The new bankruptcy law isn’t a “magic wand”. The main
challenge will be implementation-adequacy of infrastructure
and skilled pool of insolvency professionals, who will help
with the fast implementation of the law.
CII-Sumedha Fiscal has come out with this knowledge paper
with the objective to touch upon the key aspects of the Code
and lay bare the issues and challenges.
Familiarisation with Forms and Formats under:
Insolvency and Bankruptcy (Application to Adjudicating Authority)Rules,2016
IBBI (Insolvency Resolution Process for Corporate Persons) Regulations,2016
IBBI (Liquidation Process) Regulations, 2016
IBBI (Voluntary Liquidation Regulations), 2017
IBBI (Inspection and Investigation Regulations),2017
IBBI (Grievances and Complaint Handling Procedure Regulations), 2017
Remembering the old days - 32 years back - My Article on 'Goodwill: Tax Treatment' which was published in 1984 in Taxmann.
Editorial Comments: Taxation of goodwill in cases involving its transfer has often presented innumerable problems culminating in the Supreme Court decision in the case of B.C. Srinivasa Setty holding that goodwill generated in a newly commenced business is not subject to capital gains tax. The author of this article first explains the meaning and nature of goodwill and thereafter discusses the debatable question as to whether goodwill can be regarded as a capital asset. He also goes into the question as to whether and when goodwill can be regarded as having a cost of acquisition. A typical case discussed by the author is of payment for goodwill in instalments acquired by a chartered accountant in which case the question arose whether the payments so made were deductible as business-expenditure. Thus, in this article, nearly all controversial aspects of tax treatment of goodwill have been dwelt on with reference to the relevant case law on the subject - Editor
2018 was an interesting year for legal changes in corporate, finance and technology sector and the “Way of Doing Business” in India which dominated the headlines and we can expect 2019 to continue in the same way. Our article- Key Legal Developments in 2018 highlights some of the key legal changes of 2018 that you should take the time to understand and be prepared for. It’s important for any business owner to be aware of the changes affecting their business & put in place suitable safeguards. Failing to be prepared is often costly in terms of money, resource & time.
Objectives & Agenda :
The primary objective of Insolvency and Bankruptcy Code (IBC) is the resolution of distressed assets of the insolvent debtor in a time bound structured manner and to enable such insolvent entity to continue as a going concern. IBC emerges as a fast track mechanism in completion of insolvency proceedings and aims at maximising the value of the assets of an insolvent entity. The Supreme Court judgement on Essar Steel is a landmark judgement that affirms the principles of IBC. The webinar analyses the key aspects of the judgments delivered by all the judicial forums viz. National Company Law Tribunal (NCLT), National Company Law Appellate Tribunal (NCLAT) and the Honourable Supreme Court in Essar Steel case.
Covers all the issues related to Insolvency Laws and also compares the steps taken by other countries in Insolvency Laws. Views on the impact of COVID-19 on IBC laws are discussed.
“Global Regulatory Update” is a compilation of global and domestic news, opinions on regulatory issues, CII initiatives and representations on regulatory issues. The Update is aimed at keeping CII membership apprised of developments in the international and domestic corporate governance and regulatory landscape.
PPT on Insolvency and Bankruptcy Code, 2016 analysis the jargons, processes, access, limitations, opportunities, etc. A bried comparison with US Bankruptcy Code has also been stated and addressing issues like cross border insolvency amongst others issues. Also, the probe of recently notified transfer of pending proceedings has been made in the presentation.
The Insolvency and Bankruptcy Code 2016 - A Step ForwardSumedha Fiscal
The new bankruptcy law isn’t a “magic wand”. The main
challenge will be implementation-adequacy of infrastructure
and skilled pool of insolvency professionals, who will help
with the fast implementation of the law.
CII-Sumedha Fiscal has come out with this knowledge paper
with the objective to touch upon the key aspects of the Code
and lay bare the issues and challenges.
Familiarisation with Forms and Formats under:
Insolvency and Bankruptcy (Application to Adjudicating Authority)Rules,2016
IBBI (Insolvency Resolution Process for Corporate Persons) Regulations,2016
IBBI (Liquidation Process) Regulations, 2016
IBBI (Voluntary Liquidation Regulations), 2017
IBBI (Inspection and Investigation Regulations),2017
IBBI (Grievances and Complaint Handling Procedure Regulations), 2017
Remembering the old days - 32 years back - My Article on 'Goodwill: Tax Treatment' which was published in 1984 in Taxmann.
Editorial Comments: Taxation of goodwill in cases involving its transfer has often presented innumerable problems culminating in the Supreme Court decision in the case of B.C. Srinivasa Setty holding that goodwill generated in a newly commenced business is not subject to capital gains tax. The author of this article first explains the meaning and nature of goodwill and thereafter discusses the debatable question as to whether goodwill can be regarded as a capital asset. He also goes into the question as to whether and when goodwill can be regarded as having a cost of acquisition. A typical case discussed by the author is of payment for goodwill in instalments acquired by a chartered accountant in which case the question arose whether the payments so made were deductible as business-expenditure. Thus, in this article, nearly all controversial aspects of tax treatment of goodwill have been dwelt on with reference to the relevant case law on the subject - Editor
My Article published and displayed by the Taxmann.
Citation: [2015] 64 taxmann.com 232 (Article)
The main aim behind the enactment of the Competition Act, 2002 was to promote efficiency using competition as one of the means of assisting in the creation of market responsive to consumers' preferences. Section 4 of the said Act prohibits abuse of dominance by any enterprise or group. Abuse of dominance has been dealt with in sub-sections 2(a) to 2(e) of section 4.
My books- Hacking Digital Learning Strategies http://hackingdls.com & Learning to Go https://gum.co/learn2go
Resources at http://shellyterrell.com/classmanagement
The reality for companies that are trying to figure out their blogging or content strategy is that there's a lot of content to write beyond just the "buy now" page.
Der Schock war groß. Noch Wochen danach bin ich nachts aufgewacht und habe mich mit einer dieser kleinen Alutaschenlampen auf den Weg um unser Haus gemacht, um zu prüfen, ob sie es vielleicht wieder versuchen würden.
In light of a lot of news relating to sham entities garnering funds through fraudulent investment schemes with promise of huge returns mainly in the name of property development and agriculture, SEBI has in the last few years, intensified its scrutiny of investment structures that raise domestic capital on an unregulated basis. SEBI regulates an investment scheme wherein several individuals come together to pool their money for investing in a particular asset(s) and for sharing the returns arising from that investment as per the agreement reached between them prior to pooling in the money under SEBI (Collective Investment Schemes ) Regulations, 1999
In light of a lot of news relating to sham entities garnering funds through fraudulent investment schemes with promise of huge returns mainly in the name of property development and agriculture, SEBI has in the last few years, intensified its scrutiny of investment structures that raise domestic capital on an unregulated basis. Securities Appellate Tribunal recently passed an order upholding SEBI’s findings against Alchemist Infra Reality Limited. The SAT order along with recent pronouncement by the Supreme Court have probed unregulated investment arrangements to conclude whether or not they constitute CIS, as Schemes are required to be registered with SEBI in pursuance to Securities And Exchange Board Of India (Collective Investment Schemes) Regulations, 1999
Nidhi Company - Registration & OperationsLegalDelight
In India, concept of Nidhi Companies has been set up way back in 20th Century where group of people came together with a purpose to resolve the monetary issues of people residing in a particular area or town so that they did not get prey on hands of moneylenders. It basically operates on principle of mutual benefits and also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company.
Since then, Nidhi Company has gained popularity as a form of business. Main object of Nidhi Company is accepting money and promoting the habit of saving and growing value of money but activities of a Nidhi company are restricted to their members only.
In India concept of Nidhi Company is mostly popular in southern part of India almost 80% of the Nidhi Companies are operational in South India. Since object of Nidhi Companies include accepting of deposits its functioning came under the ambit of Non-Banking Financial Companies it is also governed by Reserve Bank of India besides being regulated under Companies Act, 2013.
Accounts of Banking Companies - as per the Government of India Notification no. F.No.2/6/2008-C.L-V dated 30-3-2011, applicable for the financial year commencing on or after April 1, 2011.
The SARFAESI Act was enacted for enforcement of security. Section 13(1) of the said Act provides that any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act. However, Section 14(1)(c) of the Code provides that the Adjudicating Authority shall by order declare moratorium for prohibiting, any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the SARFAESI Act. The Appellate Authority had analysed provisions of the Code and held that once the Resolution Plan is approved by the Committee of Creditors under section 30(4) and if the same meets as per the requirements of Section 30(2) and once approved by Adjudicating Authority as provided vide section 31(1), is not only binding on Corporate Debtor, but also on its employees, members, creditors, guarantors and other stakeholders involved in Resolution Plan, including Personal Guarantor.
Insolvency resolution by operational creditor: 'Demand Notice' and 'Financial...CS (Dr)Rajeev Babel
My Article published in ICSI IPA Insolvency and Bankruptcy Journal-March 2018:
In order to file insolvency resolution by the operational creditor, a demand notice must be served on the corporate debtor. The format of the demand notice to be served should be in the prescribed format as mentioned in Rule 5 of the I & B (Application to Adjudicating Authority) Rules, 2016. Further the demand notice shall be issued by the operational creditor himself or by the authorized person. The operational creditor shall also ensure that no dispute exist before the issue of demand notice.
The operational creditor shall also submit a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt by the corporate debtor and such financial institutions comes within the definition given under section 3(14) of the Code.
Invoking of Section 4 of the Competition Act: First criteria ‘Dominant Posit...CS (Dr)Rajeev Babel
Section 4 of the Competition Act, 2002 prohibits abuse of dominant position by any enterprise or group. Abuse of dominance dominant position means, (i) imposition, either directly or indirectly, of unfair or discriminatory purchase or sale prices or conditions, including predatory prices of goods or service; (ii) limiting or restricting production of goods or provision of service; (iii) indulging in practices resulting in denial of market accesses; (iv) making the conclusion of contracts subject to acceptable by other parties of supplementary obligations, and (v) using dominant position in one market to enter into or protect other market.
To invoke Section 4 of the Act, the pre-condition is that the enterprise or group should enjoy the status of dominant position and there shall be abuse of such dominant position as envisaged under section 4(2) of the Act.
Rights of secured creditors under SARFAESI prevails over BRUCS (Dr)Rajeev Babel
My Article published in Chartered Accountants Practice Journal - December 2017 issue.
Section 35 of the SARFAESI Act clearly mandates that the provisions of the SARFAESI Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. The secured creditor, as defined under the provisions of SARFAESI Act can exercise its statutory rights under Section 13 thereof notwithstanding the fact that the borrower has got a notification issued in its favour under the provisions of Maharashtra Relief Undertakings (Special Provisions) Act, 1958, (BRU Act), which suspends all its obligations and liabilities to secured creditor.
Whether identical or similar trade is a preconditon for establishing apprecia...CS (Dr)Rajeev Babel
My Article published in Competition Law Review- Nov 2017 issue:
SUMMARY: While Anti-competitive agreements are dealt with under Section 3, Section 4 prescribes that no enterprise shall abuse its dominant position. The CCI has rightly concluded that for applicability of section 3(3), it is necessary that parties are engaged in identical or similar trade of goods or provision of services. Prasar Bharti (OP-1) was a Government of India entity providing infrastructure facilities to Radio and FM operators, is treated as ‘enterprise’, while OP-2 being a nodal Ministry for Information and Broadcasting responsible for formulating guidelines can not be treated as an ‘enterprise’. The CCI held that OPs were not engaged in identical or similar trade of goods or provision of services. The CCI opined that the conduct of Prasar Bharti imposing one sided unfair terms and conditions on FM radio broadcasters, was anti-competitive.
Winding up petition by the unpaid employee whether sustainable- capj-sept 2017CS (Dr)Rajeev Babel
My article published in Manupatra's Chartered Accountant's Practice Journal, September 2017 issue.
The Trade Union, for and on behalf of the its members can certainly prefer a winding up Petition as contemplated under section 439 of CA 1956. This is for the simple reason that if the workmen have not been paid their wages and/or salary by the Company, they would certainly be a creditor or creditors as contemplated under section 439(1)(b) of the CA, 1956. Section 15 clearly mandates that the Trade Union can take up this cause for and on behalf of its members. Hence, after complying with the provisions of section 434 of the Companies Act, 1956 the Trade Union would certainly be competent to present a winding up Petition. After the enactment of the Insolvency and Bankruptcy Code, 2016 (Code), an operational creditor may also file an insolvency petition against a Corporate debtor on the occurrence of a default.
My Article published in the Manupatra's Chartered Accountant's Practice Journal in July, 2017.
Composition scheme under the new GST regime, will be a growth driver for small taxpayers who are carrying out intrastate transaction and not doing import-export of goods. Under the normal scenario, a taxpayer under GST has to file minimum 3 returns monthly and one annual return, thus he is compelled to file 37 returns in a year or penalty will be levied for non-compliance. For small suppliers and manufacturers, it is quite difficult to maintain so detailed books of accounts on a daily basis and record every transaction with supporting documents. Whereas, in composition scheme, only a quarterly return will be uploaded under GSTR-4. The present article examines the pros and cost about the Composition Scheme.
My article published in Competition Law Reports - July 2017.
WhatsApp is the most used consumer communication apps. In a case, presented by one of the user of the WhatsApp before the CCI, alleged that WhatsApp has infracted the provisions of Section 4 of the Competition Act, 2002 and is indulging in predatory pricing. Further the conduct of WhatsApp is in breach of the Information Technology Act, 2000 and the right to privacy.
The CCI opined that although WhatsApp is in a dominant position in the relevant market, however, the allegations of predatory pricing, have no substance and the WhatsApp has not contravened any of the provisions of Section 4 of the Competition Act, 2002 hence no prima facie case of contravention of the provisions of Section 4 of the Act is made out against the WhatsApp. The CCI further opined that the allegations of breach of the Information Technology Act, 2000 do not fall within the purview of examination under the provisions of the Competition Act.2002.
Presumption of appreciable adverse effect on competition- A case of TV serial...CS (Dr)Rajeev Babel
Section 3(3)(b) of the Competition Act, 2002, inter-alia, creates a presumption that an agreement, or practice carried on, or decision taken ,which limits or controls production, supply, markets, technical development, investments or provision of services has an appreciable adverse effect on competition and is to be treated as a prohibited agreement in terms of Section 3(1) of the Act. The Supreme Court in the case of Competition Commission of India vs. Co-ordination Committee of Artists and Technicians of W.B. Film and Television and others, had already affirmed that once an agreement falls under Section 3(3)(b) of the Act, appreciable adverse effect on competition is presumed. Therefore, if a particular agreement comes in any of the said categories, it is per se treated as adversely effecting the competition to an appreciable extent and comes within the mischief of sub-section (1).
Sarfaesi act can not override the provisions of the rent control actCS (Dr)Rajeev Babel
My article published in the Manupatra's Journal 'Chartered Accountants Practice Journal' in April 2017 issues.
SUMMARY:
SARFAESI Act does not destroy the pre- existing rights that were created prior to the creation of the mortgage/security was clearly laid down by the Supreme Court in the cases of Harshad Govardhan Sondagar (supra) and Vishal N. Kalsaria (supra) and the High Court of Bombay relied on the decision given in the instant case.
While the SARFAESI Act is concerned with non-performing assets of the banks, the Rent Control Act governs the relationship between a tenant and the landlord and specifies the rights and liabilities of each as well as the rules of ejectment with respect to such tenants. The provisions of the SARFAESI Act cannot be used to override the provisions of the Rent Control Act.
Story of dubbing of tv serial mahabharat i bangla a cs ase on competition actCS (Dr)Rajeev Babel
My Article published in Competition Law Reports-April 2017 issue.
Highlights:
The purpose of defining the 'relevant market' is to assess with identifying in a systematic way the competitive constraints that undertakings face when operating in a market. This is the case in particular for determining if undertakings are competitors or potential competitors and when assessing the anti-competitive effects of conduct in a market. The concept of relevant market implies that there could be an effective competition between the products which form part of it and this presupposes that there is a sufficient degree of interchangeability between all the products forming part of the same market insofar as specific use of such product is concerned.
When trade union is of 'enterprises' and its action of boycott is reflecting the collective intent of its members, its action would violate Competition Act, 2002 even if the union itself is carrying on no economic activity by itself. When some of the members are found to be in the production, distribution or exhibition of films/serials line, the matter could not have been brushed aside by merely giving it a cloak of trade unionism.
Grounds of detention under cofeposa is valid even if one of grounds is legall...CS (Dr)Rajeev Babel
My article displayed by the well known publisher MANUPATRA on 23rd February, 2017.
http://www.manupatrafast.com/articles/
The purpose behind the enactment of the COFEPOSA was to provide for preventive detention in certain cases for the purposes of conservation and augmentation of Foreign Exchange and prevention of smuggling activities and for matters connected therewith. The Supreme Court, in its landmark decision very well interpreted section 3 read with section 5A of the COFEPOSA and opined that where the detention order is based on more than one grounds, independent of each other, then detention order will still survive even if one of grounds found is non-existing or legally unsustainable.
Penalty for non furnishing of information on combination under section 42 a o...CS (Dr)Rajeev Babel
My Article published in the Manupatra's Competition Law Review- Jan 2017 issue.
SUMMARY:
The Supreme Court in the case titled Chairman, SEBI v. Shriram Mutual Fund has opined that mens rea is not an essential ingredient for contravention of the provisions of a civil act. The penalty is attracted as soon as contravention of the statutory obligations as contemplated by the Act is established and, therefore, the intention of the parties committing such violation becomes immaterial. In other words, the breach of a civil obligation which attracts penalty under the provisions of an Act would immediately attract the levy of penalty irrespective of the fact whether the contravention was made by the defaulter with any guilty intention or not.
The Tribunal opined that the CCI has power to approve a combination under section 31 and such approval neither obliterates nor condones contravention, for which penalty is to be imposed under section 43A and, thus, penalty under section 43A is leviable even if combination has no appreciable adverse effect on competition. The Tribunal held that the Appellants failed to notify proposed combination to CCI as required under section 6(2), penalty under section 43A was to be imposed upon appellant even though combination was approved by CCI.
My Article published in Manupatra's Chartered Accountant Practice Journal, Jan 2017:
The Registrar of Companies has been empowered under section 248 of the Companies Act, 2013, for the removal of names of companies from the Register of Companies. This section corresponds to section 560 of the old Companies Act, 1956 and its sub-section (6) have a clause for restoration of the name of the company after it has been struck off and a time limit of 20 years from the date of struck off, has been prescribed. The prayer for the restoration of name of the company may be made by the aggrieved person (i.e. a company or any member or creditor thereof), however where the company/ its directors, itself had made the application for struck off the name, whether the restoration of the name of such company is allowable. This article narrates the circumstances under which the restoration of name can be allowed under section 560(6) of the old CA 1956.
After assignment of debts to arc no reference can be filed before bifrCS (Dr)Rajeev Babel
The second proviso to section 15(1) of the SICA, 1985 as introduced by the provisions of the SARFAESI Act applies specifically to a situation where financial assets have been acquired by any securitisation company or by a reconstruction company under section 5(1) of the SARFAESI Act. Thus in view of this a reference cannot be filed by a company before the BIFR after its debts or part thereof, have been assigned in favour of a securitisation or reconstruction company.
My Article published by the TAXMANN in Oct 2016.
Section 28 of the Indian Contract Act, 1872 had drawn attention of the Law Commission of India, which was reflected in its 13th Report (Sept- 1958) and 97th Report (March 1984). The said section was amended on the recommendation of the 97th Report, by the Indian Contract (Amendment) Act, 1996, and came into force w,e,f, 8th January, 1997. This paper narrates the situation of the case pertaining to bank guarantee executed prior to this amendment. The Apex Court has very rightly observed that 1997 amendment to section 28 of the Indian Contract Act, 1872, which made certain agreements covered by section 28(b) void does not purport to be either declaratory or clarificatory, it being substantive law operates prospectively.
Amortization of preliminary expenses cannot be stopped if the clock has start...CS (Dr)Rajeev Babel
My Article published in TAXMANN in Oct 2016.
The amortization of preliminary expenses is permitted under Section 35D of the Income Tax Act, 1961. The Supreme Court has rightly opined that once, this position is accepted and the clock had started running in favour of the assessee, it had to complete the entire period and benefit granted in first two years could not be been denied in the subsequent years.
The Apex Court also stated that where there is any dispute with employees over quantum of bonus, the amount of bonus paid to the Trust (formed for benefit of employees) and after the settlement of the dispute the trust paid the bonus amount to employees before the due date disallowance of the same, cannot be made by invoking the provisions of section 40A(9) or section 43B(b). Nor any disallowance can be made for the reason that bonus was not paid by the employer-assessee directly in cash to employees and payment was made to employees by the trust.
Forfeiture of properties of relatives of convct under safem actCS (Dr)Rajeev Babel
My article published by the TAXMANN in Oct 2016.
SUMMARY
The object of the SAFEM Act is to ensure that the properties purchased out of smuggling activities or by illegal means in violation of the provision of the SAFEM Act cannot be permitted to be enjoyed by the convict/detenu or a relative holding the property as benami. However, It is only when link or nexus of properties with convict/detenue or to income from such illegal activity is established, properties standing even in name of a relative can be forfeited. The article highlights a case recently decided by the High Court of Madras, in which Court has opined that where properties of respondent were his individual properties without any nexus to his wife, who was convict/detenue for violation of FERA, properties of respondent being spouse of convict could not be forfeited.
Whether bank acting as debenture trustee can file proceedings under drtCS (Dr)Rajeev Babel
My Article published in 'Chartered Accountant Practice Journal', Sept 2016 issue.
The definition of “debt”, has been given a very wide meaning under section 2(g) of the RDB Act, but Section 17, which prescribes the jurisdiction of the Tribunal, has not amended. Therefore, when a debenture trustee wants to file a proceedings for recovery of the amounts payable to the debenture holders or for the benefits of debenture holders, Section 17 will not apply and hence, the jurisdiction of regular civil court is not excluded. The reason is that in such a case, the bank which is a debenture trustee does not claim recovery of a debt due to itself.
Non disclosure of material facts in the offer doc may debar from assessing th...CS (Dr)Rajeev Babel
Whenever a company opt the IPO route for raising of funds, there should be material disclosure in the Offer documents. The ICDR Regulations provides the manner of disclosure in the offer document. What facts are material in terms of disclosure requirements, is a question of facts. The present article discusses the issues relating to it, findings of the SEBI, imposing of penalty on the company concerned to debar from the securities market and the final verdict of the SAT, in reducing the penalty.
The Roman Empire A Historical Colossus.pdfkaushalkr1407
The Roman Empire, a vast and enduring power, stands as one of history's most remarkable civilizations, leaving an indelible imprint on the world. It emerged from the Roman Republic, transitioning into an imperial powerhouse under the leadership of Augustus Caesar in 27 BCE. This transformation marked the beginning of an era defined by unprecedented territorial expansion, architectural marvels, and profound cultural influence.
The empire's roots lie in the city of Rome, founded, according to legend, by Romulus in 753 BCE. Over centuries, Rome evolved from a small settlement to a formidable republic, characterized by a complex political system with elected officials and checks on power. However, internal strife, class conflicts, and military ambitions paved the way for the end of the Republic. Julius Caesar’s dictatorship and subsequent assassination in 44 BCE created a power vacuum, leading to a civil war. Octavian, later Augustus, emerged victorious, heralding the Roman Empire’s birth.
Under Augustus, the empire experienced the Pax Romana, a 200-year period of relative peace and stability. Augustus reformed the military, established efficient administrative systems, and initiated grand construction projects. The empire's borders expanded, encompassing territories from Britain to Egypt and from Spain to the Euphrates. Roman legions, renowned for their discipline and engineering prowess, secured and maintained these vast territories, building roads, fortifications, and cities that facilitated control and integration.
The Roman Empire’s society was hierarchical, with a rigid class system. At the top were the patricians, wealthy elites who held significant political power. Below them were the plebeians, free citizens with limited political influence, and the vast numbers of slaves who formed the backbone of the economy. The family unit was central, governed by the paterfamilias, the male head who held absolute authority.
Culturally, the Romans were eclectic, absorbing and adapting elements from the civilizations they encountered, particularly the Greeks. Roman art, literature, and philosophy reflected this synthesis, creating a rich cultural tapestry. Latin, the Roman language, became the lingua franca of the Western world, influencing numerous modern languages.
Roman architecture and engineering achievements were monumental. They perfected the arch, vault, and dome, constructing enduring structures like the Colosseum, Pantheon, and aqueducts. These engineering marvels not only showcased Roman ingenuity but also served practical purposes, from public entertainment to water supply.
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
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Letter from the Congress of the United States regarding Anti-Semitism sent June 3rd to MIT President Sally Kornbluth, MIT Corp Chair, Mark Gorenberg
Dear Dr. Kornbluth and Mr. Gorenberg,
The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
unwillingness to rectify this violation through action requires accountability.
Postsecondary education is a unique opportunity for students to learn and have their ideas and beliefs challenged. However, universities receiving hundreds of millions of federal funds annually have denied
students that opportunity and have been hijacked to become venues for the promotion of terrorism, antisemitic harassment and intimidation, unlawful encampments, and in some cases, assaults and riots.
The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
• The Committee on Oversight and Accountability is investigating the sources of funding and other support flowing to groups espousing pro-Hamas propaganda and engaged in antisemitic harassment and intimidation of students. The Committee on Oversight and Accountability is the principal oversight committee of the US House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X.
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Doing CIS activity in Guise of Running Real Estate Business: A Case Study
1. [2016] 68 taxmann.com 72 (Article)
Doing CIS activity in Guise of Running Real Estate Business: A Case Study
DR. RAJEEV BABEL, FCS
SEBI (Collective Investment Schemes) Regulation, 1999 provides details of compulsory registration,
business activities and obligations, trustees and their obligations, collective investment scheme,
general obligations, inspection and audit, etc., of Collective Investment Management Company.
The present article is a case study of PACL Ltd., which in guise of running real estate business, was
actually running sham Collective Investment Schemes (CIS) which were detrimental to interest of
investors. SEBI directed PACL to wind up its existing CIS and to refund money collected from
investors with promised return, which was challenged in SAT by the company, but SAT justified the
decision given by the SEBI.
Introduction
1. Raising of funds from the public by floating attractive investment schemes is gaining momentum.
Many of such schemes have been launched earlier by the entities which operated for sometime to attract
more investors and thereafter vanished, thus pocketing the hard earned savings of the commonmen. In
order to curb such malpractices and to regularise such collective schemes, section 12(1B) was inserted
to the SEBI Act with effect from 25-1-1995 which provides that no person shall sponsor or carry on a
Collective Investment Scheme (CIS) unless that person obtains a certificate of registration from the
SEBI in accordance with the Regulations framed by SEBI. Accordingly, the Central Government issued
statutory directions under section 16 of the SEBI Act directing SEBI to formulate draft Regulations for
"Collective Investment Scheme". The SEBI on 15th October, 1999, came out with the SEBI (Collective
Investment Schemes) Regulation, 1999. This regulation provides details of compulsory registration,
business activities and obligations, trustees and their obligations, collective investment scheme, general
obligations, inspection and audit, etc., of Collective Investment Management Company.
2. Definition of Collective Investment Scheme (CIS)
2.1. Section 11AA(1) of SEBI Act, 1992: - Prescribes that any scheme or arrangement which
satisfies the conditions referred to in sub-section (2) or sub-section (2A) shall be a collective investment
scheme:
Provided that any pooling of funds under any scheme or arrangement, which is not registered with the
Board or is not covered under sub-section (3), involving a corpus amount of one hundred crore rupees
or more shall be deemed to be a collective investment scheme.
Sub-section (2) provides that any scheme or arrangement made or offered by any person under which,
—
i. the contributions, or payments made by the investors, by whatever name called, are
2. pooled and utilized for the purposes of the scheme or arrangement;
ii. the contributions or payments are made to such scheme or arrangement by the
investors with a view to receive profits, income, produce or property, whether
movable or immovable, from such scheme or arrangement;
iii. the property, contribution or investment forming part of scheme or arrangement,
whether identifiable or not, is managed on behalf of the investors;
iv. the investors do not have day-to-day control over the management and operation of
the scheme or arrangement.
Sub-section (2A) provides that any scheme or arrangement made or offered by any person satisfying the
conditions as may be specified in accordance with the regulations made under this Act.
2.2. Exclusion of certain collective deposits - Notwithstanding anything contained in sub-
section (2) or sub-section (2A), any scheme or arrangement:
i. made or offered by a co-operative society registered under the Co-operative
Societies Act, 1912 or a society being a society registered or deemed to be registered
under any law relating to co-operative societies for the time being in force in any
State;
ii. under which deposits are accepted by non-banking financial companies as defined
in clause (f) of section 45-I of the Reserve Bank of India Act, 1934;
iii. being a contract of insurance to which the Insurance Act, 1938, applies;
iv. providing for any Scheme, Pension Scheme or the Insurance Scheme framed under
the Employees Provident Fund and Miscellaneous Provisions Act, 1952;
v. under which deposits are accepted under section 58A of the Companies Act, 1956;
vi. under which deposits are accepted by a company declared as a Nidhi or a mutual
benefit society under section 620A of the Companies Act, 1956;
vii. falling within the meaning of Chit business as defined in clause (d) of section 2 of
the Chit Fund Act, 1982;
viii. under which contributions made are in the nature of subscription to a mutual fund;
ix. such other scheme or arrangement which the Central Government may, in
consultation with the Board, notify,
shall not be a collective investment scheme.
Number of cases registered with the SEBI
3. The CIS Regulation which came into force in 1999 so far has only one company named as Gift
Collective Investment Management Co. registered with it as a CIS after complying with the regulations.
It is a Gujarat Government PSU which is building the International Financial City in the Ahmedabad-
Gandhinagar region.
Case laws on CIS
4. Although the registered count is only one, yet the number of cases under litigations are many more.
Just to name few big cases they are P.G.F. Ltd. v. Union of India [2013] 31 taxmann.com 100/125 SCL
243 (SC), Sahara India Real Estate Corpn. Ltd. v. SEBI [2012] 25 taxmann.com 18/115 SCL 478 (SC),
Subrata Roy Sahara v. Union of India [2014] 45 taxmann.com 80 (SC), Sharda Realty India Ltd.
(http://www.sebi.gov.in/cms/sebi_data/attachdocs/1366731012533.pdf) and many more. Recently, a
case titled as PACL Ltd. v. SEBI [2015] 60 taxmann.com 285 (SAT - Mumbai),dated 12th August, 2015
has been added in the CIS related litigations. The case involves the amount of more than Rs. 11,700
crores of public money and apparently looks like a Real Estate Company. The decision of the SAT
3. declared it as violation of CIS Regulation and is worthwhile to discuss the modus operandi of the case.
5. Case of PACL Ltd. v. SEBI
5.1. Facts of the case:
PACL was engaged in the business of sale and purchase of agricultural land and its
development as per the scheme floated by PACL from time-to-time.
In the year 1998, a Public Interest Litigation (PIL) was filed before the Delhi High
Court wherein it was alleged that various companies, including PACL were carrying
on CIS without obtaining certificate of registration from the SEBI. By its order
dated 07.10.1998 the Delhi High Court directed all the companies named in the PIL
to get themselves Credit Rated from the Credit Rating Agency approved by the
SEBI. Pending further orders all those companies and their directors were
restrained from alienating or parting with possession of their immovable
properties.
On 08.12.1998 PACL moved an application before the Delhi High Court seeking
deletion of its name from the list of the respondents in the PIL on the ground that
the business carried on by PACL did not fall within the scope of CIS.
On 15.10.1999 the Securities and Exchange Board of India (Collective Investment
Schemes) Regulations, 1999 ('CIS Regulations' for short) were framed and notified
by the SEBI. Thereafter by its communications/orders dated 30.11.1999 and
10.12.1999, SEBI informed that the schemes floated by PACL were covered under
CIS Regulations and called upon PACL to comply with and abide by the CIS
Regulations, failing which consequential directions would be issued under section
11B of the SEBI Act and Regulation 65 of the CIS Regulations.
By its reply dated 13.12.1999, PACL submitted that the activities carried on by it
were not covered under CIS and, hence, PACL was not required to comply with the
CIS Regulations. Apart from filing the aforesaid reply, PACL filed a Writ Petition
before the Rajasthan High Court seeking an order directing the SEBI to withdraw
the notices dated 30.11.1999 and 10.12.1999.
By an order dated 21.12.1999 Rajasthan High Court stayed the operation of the two
notices dated 30.11.1999 and 10.12.1999. Thereafter, by its final order dated
28.11.2003 the Rajasthan High Court held that none of the conditions set out under
section 11AA(2) were satisfied in the present case and, accordingly, quashed both
the notices dated 30.11.1999 and 10.12.1999 issued by the SEBI.
In the meantime, the Delhi High Court passed an order on 16.11.2000 in the PIL
filed before it whereby Justice K. Swami Durai (Retd.) was appointed to physically
verify the genuineness of 14,150 sale transactions entered into by PACL with various
customers and also to supervise the registration of sale deeds executed in respect of
those transactions.
On 20.09.2002 Justice K. Swami Durai (Retd.) submitted his final report inter alia
recording that the lands which PACL proposed to transfer to its customers were in
existence and PACL was in possession of the said lands in question either as direct
owner or owner by virtue of agreement for sale in their favour by the erstwhile
owners or pursuant to the Power of Attorney executed in favour of the
representative of PACL by the erstwhile owner and paying full amount of
consideration to the erstwhile owner. It was also recorded in the said report that the
development work on the lands in question was found to be carried out by PACL
and in some cases the development was complete and the customers had taken
possession of the plots of land and constructed cottages and were carrying on their
development work in addition to the development work being carried out by PACL.
In view of the aforesaid report submitted by Justice K. Swami Durai (Retd.) to the
effect that the 14,150 transactions entered into by PACL with its customers were
4. genuine and in view of there being no objection from SEBI to the said report, Delhi
High Court by its order dated 03.03.2003 deleted the name of PACL from the list of
the respondents in the PIL and further directed that all future sale deeds be
executed and registered by PACL in favour of its customers under the supervision of
Justice K. Swami Durai (Retd).
Challenging the decision of the Rajasthan High Court dated 28.11.2003, wherein it
was held that the sale and purchase transactions carried on by PACL were not
covered under CIS, SEBI filed civil appeal before the Apex Court. By its order dated
26.02.2013, Apex Court set aside the decision of the Rajasthan High Court and
directed that the notices dated 30.11.1999 and 10.12.1999 be treated as show cause
notices and permitted SEBI to issue supplementary show cause notice to PACL and
its directors within the time stipulated therein and pass fresh orders in relation to
the question as to whether the business activity carried on by PACL falls within the
category of CIS or not and depending upon that, SEBI may proceed further in
accordance with law. Apex Court further directed that before taking any future
action SEBI shall give prior notice to PACL.
Accordingly, SEBI conducted further investigation and issued a supplementary
show cause notice on 14.06.2013 to PACL and its directors/former directors, calling
upon them to show cause as to why the schemes of PACL should not be declared as
CIS and if found to be CIS, why appropriate action including direction under
sections 11 and 11B of the SEBI Act, read with Regulation 65 of the CIS Regulations
should not be issued against them for not complying with the provisions contained
under the CIS Regulations. It was not in dispute that the delay in issuing the
supplementary show cause notice had been condoned by the Apex Court by its
order dated 27.09.2013.
PACL as also the promoters and directors of PACL denied the allegations made
against them in the show cause notices. After hearing PACL and its promoters and
directors SEBI passed the impugned order on 22.08.2014 holding that the
schemes run by PACL constitute CIS and as a natural consequence
directed PACL/its directors and promoters to wind up the existing CIS
and refund the monies which had been collected from the customers in
violation of the SEBI Act and the CIS Regulations, with promised return
within a period of three months from the date of the said order.
Challenging the aforesaid order all these appeals were filed.
5.2. Decision of the SAT - The SAT, Mumbai after hearing the arguments of the Counsels of both the
parties gave its decision on 12th August, 2015. The decision was as under:
By inserting section 12(1B) to the SEBI Act the Legislature has made it mandatory
for any person to obtain a certificate of registration for operating CIS with effect
from 25.01.1995. In respect of CIS operating prior to insertion of section 12(1B) for
which no certificate of registration was required, proviso to section 12(1B)
provides that such CIS may continue to operate till such time
regulations are made by SEBI.
Regulation 5 of the CIS Regulations framed by the SEBI which came into force with
effect from 15.10.1999 mandatorily provide that any person operating a CIS prior to
the commencement of CIS Regulations shall subject to the provisions of Chapter IX
of CIS Regulations make an application to SEBI for grant of a certificate
within a period of two months from 15.10.1999.Thus, operating CIS
without obtaining a certificate of registration from SEBI is illegal after
the CIS Regulations came into force.
Where a person is found to be operating a CIS, after the CIS Regulations came into
force, without obtaining a certificate of registration, then, in the interest of
investors, SEBI may under section 11/11B of SEBI Act direct that person
either to wind up the CIS or comply with the CIS Regulations by seeking
5. certificate of registration from SEBI.
Admittedly, some of the schemes floated by PACL were existing on 15.10.1999. In
respect of those schemes, PACL was required to make an application seeking
certificate of registration under regulation 5, only if the schemes floated by PACL
constituted CIS under the SEBI Act.
By two communications dated 30th November, 1999 and 10th December, 1999
SEBI informed PACL that the schemes floated by PACL were CIS and called upon
PACL to comply with the SEBI Act and the CIS Regulations by seeking registration
in terms of regulations 5, read with regulation 68 or wind up the schemes and repay
to the customers as stipulated under regulation 73/74 of the CIS Regulations.
Since the aforesaid communications were stayed and ultimately set aside by the
Rajasthan High Court on 28th November, 2003 on ground that the schemes floated
by PACL were not CIS, PACL was not required to obtain certificate of registration
from SEBI for operating the schemes floated by it.
Apex Court on 26th February 2013 set aside the decision of the Rajasthan High
Court dated 28th November, 2003 and directed SEBI to treat the communications
dated 30th November, 1999 and 10th December, 1999 as show cause notices and
permitted SEBI to issue supplementary show cause notice to PACL after carrying
out necessary inspection, investigation, inquiry and verification of the accounts and
other records of PACL. Apex Court further directed SEBI to pass fresh orders on the
question as to whether the schemes floated by PACL were covered under the
category of CIS or not and depending upon that decision proceed further in
accordance with law. Before taking any future action SEBI was directed to give prior
notice to PACL. Accordingly, on completion of investigation, SEBI issued
supplementary show cause notice on 14th June, 2013 and after hearing the
appellants impugned order was passed on 22.08.2014.
For the reasons stated in the impugned order, decision of the SEBI that in the
guise of running real estate business, PACL was running sham CIS
which were detrimental to the interest of investors and, consequently,
directing PACL to wind up the existing CIS and to refund the money
collected from the investors with promised return could not be faulted.
Argument of the appellants that the decision of the Apex Court dated 26th
February, 2013 contemplated two-tier procedure was not correct. Apex Court's
order required SEBI to hear the appellants on the issue as to whether PACL was
covered under CIS and also on the issue as to what future course of action should be
taken if PACL was held to be running CIS. Thus, the Apex Court's order emphasised
on issuing notice of hearing on both issues and did not curtail the powers of the
SEBI to issue appropriate directions in the interest of investors under section 11/11B
of the SEBI Act.
Argument of the appellants, that in view of the two-tier procedure prescribed by the
Apex Court, after holding that the schemes of PACL constituted CIS, SEBI could not
have passed consequential order till the decision of the SEBI holding PACL to be
covered under CIS was finally upheld by the Apex Court was without any merit. If
that contention was accepted, it would mean that till the SEBI order on CIS attained
finality, Apex Court had prohibited SEBI from taking action against PACL, even if,
the CIS run by PACL were sham and detrimental to the interest of investors. We do
not agree with the aforesaid interpretation of the Apex Court's order put forth by the
appellants.
In the present case, in the guise of selling agricultural land, PACL had
collected Rs. 49,100 crore from 5.85 crore customers by promising
them that the investments in the schemes of PACL were highly
profitable. Admittedly, value of the total lands held by PACL in the form
of stock-in-trade as on 31.03.2014 was Rs. 11,706.96 crore. In such a
case, permitting PACL to operate CIS by seeking registration under CIS
6. Regulations would have be travesty of justice. Accordingly, no fault
could be found with the decision of the SEBI in directing PACL to wind
up all existing schemes and to refund the monies collected from the
investors with the return which were due to its investors. Appellants were
directed to comply with the directions contained in the impugned order of the SEBI
dated 22.08.2014 within a period of three months from that date.
Conclusion
6. Regulating the un-regulated market of CIS is the need of the hour in order to save the hard earned
money of the commonmen. Though SEBI's CIS Regulations are in force since 1999, yet till date only one
company got its registration with the SEBI. Many other entities are playing and raising crores of Rupees
from the public by portraying the rosy pictures in the name/activity of real estate, plantation, teak-
wood, mutual investment, etc., but the real motto of such entities behind the curtain is the greed to
create their own financial empire. Looking to the increasing number of cases of violations of the CIS
Regulations, it is high time to give more powers to the SEBI to arrest such cases at the early stage.
■■
7. Regulations would have be travesty of justice. Accordingly, no fault
could be found with the decision of the SEBI in directing PACL to wind
up all existing schemes and to refund the monies collected from the
investors with the return which were due to its investors. Appellants were
directed to comply with the directions contained in the impugned order of the SEBI
dated 22.08.2014 within a period of three months from that date.
Conclusion
6. Regulating the un-regulated market of CIS is the need of the hour in order to save the hard earned
money of the commonmen. Though SEBI's CIS Regulations are in force since 1999, yet till date only one
company got its registration with the SEBI. Many other entities are playing and raising crores of Rupees
from the public by portraying the rosy pictures in the name/activity of real estate, plantation, teak-
wood, mutual investment, etc., but the real motto of such entities behind the curtain is the greed to
create their own financial empire. Looking to the increasing number of cases of violations of the CIS
Regulations, it is high time to give more powers to the SEBI to arrest such cases at the early stage.
■■