SAT asks Sumangal Industries to file fresh appeal in CIS case

Rejecting an appeal by Sumangal Industries against Sebi's clampdown on its potato purchase scheme, the Securities Appellate Tribunal has said the firm made "vague prayers" and asked it to file a fresh plea.
The Securities and Exchange Board of India (Sebi), in July 2013, had directed Sumangal Industries and its directors to wind up its schemes and refund investor money in three months. It had also restrained them from securities markets.
Kolkata-based Sumangal Industries was soliciting funds from the public through an illegal 'potato purchase' investment scheme. It was promising investors 20-100 per cent return on investments within 15 months through a scheme involving purchase and subsequent sale of potatoes.

Subsequently, the company had challenged Sebi's ruling in the matter before the tribunal.
In an order dated November 16, SAT said that the company and its directors have made about 10 vague prayers.
"The appellants are praying, inter alia, to the effect that no civil or criminal Court of Law in India has jurisdiction to deal with the subject matter of CIS (Collective Investment Scheme). Similarly, one of the prayers is to the effect that all present and future proceedings in any Civil or Criminal Court of Law in India related to the subject matter of CIS be quashed," the tribunal said.

"Such ambiguous prayers are not maintainable. Even the grounds and pleadings are not specific," it added.
However, another appellant, Subrata Adhikary, said that he would like to withdraw the present appeal with liberty to file fresh and better appeal with the specific prayers and better grounds.
Accordingly, SAT has disposed of the present appeal and allowed the company to file a fresh appeal challenging Sebi's order against the firm within three weeks.