Arun Khurana vs SEBI

IN THE SECURITIES APPELLATE TRIBUNAL
AT MUMBAI

TH
DATED THIS THE 05 DAY OF MARCH, 2026

CORAM: Justice P.S. Dinesh Kumar, Presiding Officer
Ms. Meera Swarup, Technical Member
Dr. Dheeraj Bhatnagar, Technical Member


Appeal No.569 of 2025

Arun Khurana
4301, The Imperial South Tower,
BB Nakashe Marg, Tardeo,
Mumbai – 400034.




…Appellant

(By Mr. Pesi Modi, Senior Advocate with Mr. Kyrus Modi, Mr.
Vishesh Malviya, Ms. Anuja Bhansali, Ms. Aanchal Maheshwari
and Mr. Jai Sanyal, Advocates i/b. Rashmikant and Partners for
the Appellant.)


Securities and Exchange Board of India
SEBI Bhavan, Plot No.C4-A, ‘G’ Block,
Bandra Kurla Complex,
Mumbai-400051.




…Respondent


(By Mr. Sumit Rai, Advocate with Mr. Manish Chhangani, Mr.
Sumit Yadav, Mr. Abhay Chauhan and Mr. Atul Agrawal,
Advocates i/b. The Law Point for the Respondent.)


THIS APPEAL IS FILED UNDER SECTION 15T OF THE
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 TO
SET ASIDE COMMUNICATION DATED DECEMBER 17, 2025
ISSUED BY SEBI.

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THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
ORDERS ON FEBRUARY 17, 2026 COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE TRIBUNAL MADE
THE FOLLOWING:
ORDER

Per: Justice P. S. Dinesh Kumar, Presiding Officer

This appeal is presented with prayers to (i) set aside
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SEBI ’s communications dated December 17, 2025, calling upon
the appellant to appear for personal hearing on December 30,
2025; (ii) direct the SEBI to grant complete inspection and
provide copies of all material and documents mentioned in
Exhibit ‘DD’ to the appeal; and (iii) to direct SEBI to grant six
weeks’ time to file reply.
2. We have heard Mr. Pesi Modi, learned Senior Advocate for
the appellant and Mr. Sumit Rai, learned Advocate for the
respondent.
3. Appellant was working as the Whole Time Director
(Executive Director) with IndusInd Bank Limited (‘Bank’ for
short). SEBI conducted a suo motu preliminary examination into
the fall in shares price of IndusInd Bank pursuant to an
announcement made by the Bank on Stock Exchange’s website.
While the examination was in progress, SEBI received complaints
and media reports alleging insider trading by the Key Managerial
Persons of the Bank.

1
Securities and Exchange Board of India
2
DIS/281/2025; DIS/290/2025; DIS/297/2025; and DIS/302/2025

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4. On March 10, 2025, the Bank had made an
announcement on the stock exchange’s website that Bank’s
internal review had estimated an adverse impact of
approximately 2.35% of Bank’s net worth as of December, 2024.
The Bank had estimated the impact due to discrepancies in the
account balance of derivative portfolio to the tune of about
₹1,529 Crores. Based on the material on record, SEBI found
that appellant and four others were ‘insiders’ as defined in PIT
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Regulations and they had indulged in trading while in possession
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of UPSI . Accordingly, the WTM , SEBI passed an ex parte
interim order dated May 28, 2025 issuing various directions
against five noticees. Appellant is noticee No.1. Noticees were
granted 21 days to reply and given opportunity of hearing, if
desired. Appellant challenged the said order before this Tribunal
in Appeal No.412 of 2025 and it was disposed of by directing the
appellant to deposit 50% of the impounded amount by way of
fixed deposit with lien marked in SEBI’s favour.
5. It is pleaded that in response to appellant’s request, SEBI
permitted inspection of some documents. In the meanwhile,
appellant had received the impugned communications fixing
personal hearing on December 30, 2025. Hence, this appeal.
6. On the last date of hearing, it was submitted on behalf of
the SEBI that SEBI does not wish to file any reply and the matter
can be taken up for final disposal at the admission stage.

3
Securities and Exchange Board of India (Prohibition of Insider Trading)
Regulations, 2015
4
Unpublished Price Sensitive Information
5
Whole Time Member

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7. Mr. Modi, learned Senior Advocate for the appellant
submitted that according to the SEBI, on March 10, 2025, Bank
made a corporate announcement stating that the Bank had
discovered errors in the internal accounting of the derivatives
trades and this had an impact of about 2.35% of Bank’s net
worth and according to the SEBI, this was the alleged UPSI
which had come into existence on March 4, 2025.
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8. He submitted that the appellant gets ESOPs every year.
He had traded them between December 8, 2023 and June 25,
2024, nine months prior to the date of alleged UPSI. SEBI has
noted these facts in the ex parte interim order. However, on a
wholly incorrect premise that UPSI had come into existence on
December 4, 2023, SEBI has passed the ex parte interim order
which is oppressively affecting the appellant. He submitted that
appellant had purchased 91,520 shares under the Bank’s ESOP
scheme at an average price of ₹1,539 per share which was
higher than the price before and after the said public
announcement. He submitted that a significant part of
appellant’s remuneration was by way of ESOPs and he was
regularly taking shares and selling them. He contended that if
appellant had the knowledge of UPSI, he would not have
exercised his option to take ESOPs at an average price of ₹1,539
which was higher than the market price.
9. Mr. Modi further submitted that though the appellant has
sought for inspection of nine documents, he shall be satisfied if
he is provided with inspection of following five items.

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Bank’s Employee Stock Options

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i. Entire email dump received from the Bank (1.7 TBF
external drive containing backup of 26 officials and 14
generic email addresses referred to in Annexure 9 and
paragraph 13 of the undated Examination Report);
ii. (a) Copy of the reasons recorded for conducting suo motu
preliminary examination in the matter;
(b) Date on which the Investigation Report and/or
Preliminary Examination Report were put up for the
information/knowledge of the WTM;
(c) Copy and details of the material placed before the
WTM to decide that there were sufficient grounds to
enquire into the alleged violations;
(d) Date on which the Investigation report and/or
Preliminary Examination Report was approved by the
WTM and the present proceedings were approved;
(e) Copy of reasons recorded by the Board Chairman
Executive Director that there exist reasonable grounds to
conduct an inspection into the affairs of the Noticee in the
said matter;
(f) Copy of the Order of the Board authorizing
investigation in the matter;
(g) Action Matrix;
(h) Copy of Document titled ‘Green Note’ provided for
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inspection on 9 September 2025 along with Flags A, B, C
which appeared to be a summary of the Respondent’s
findings with respect to the alleged insider trading on the
scrip of the Bank;

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iii. Attachments to the following emails in Annexure 29 and
30 to the Undated Examination Report:-
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(a) 30 Nov 2023 sent at 19:14 p.m. sent at 15:54
p.m.
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(b) 30 Nov 2023 sent at 01:04 p.m.
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(c) 7 July 2021 at 12:56 p.m.

iv. Attachments to the following trailing emails in Annexure
46 to the Undated Examination Report:-
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(a) 28 Dec 2023 sent at 01:13 p.m.
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(b) 29 Dec 2023 sent at 18:04 p.m.
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(c) 17 Jan 2024 sent at 11:25.

v. Emails compromising communication between the Bank
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and Respondent between 10 March 2025 to 29 May,
2025.

10. The first among them is the ‘email dump’ collected by
SEBI from the Bank in an external drive. This includes backup of
emails of 26 officials and 14 generic email addresses referred in
para 13 of the examination report. He submitted that appellant’s
request for inspection has been rejected by SEBI on the following
grounds:
(i) the information was confidential, sensitive and received
in fiduciary capacity;
(ii) the matter was under investigation and therefore the
data could not be shared;
(iii) emails are huge in volume and redaction was not
possible;
(iv) emails were searched on key word search basis; and
(v) all emails contained attachment and trail mails.

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11. Mr. Modi submitted that SEBI’s refusal to grant inspection
of documents, is in violation of principles of natural justice and
prayed for granting the prayers made in the appeal.
12. Mr. Sumit Rai, learned Advocate for the SEBI submitted
that the email dump consists of a huge data of about 1.7 TB.
Therefore, while passing the interim order, emails were searched
on key word search basis. SEBI has shared those emails and
also the trailing mails with the appellant. SEBI has also granted
inspection on numerous occasions and provided them in a CD.
Further, though SEBI has not relied upon, as per appellant’s
request, SEBI has made available to the appellant the annexures
to certain trail mails.
13. Mr. Rai submitted that the law with regard to furnishing
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the documents has been well settled in T. Takano v. SEBI . He
argued that even in the cases of preventive detention, it is held
by the Apex Court that copies of only ‘relied upon’ documents be
supplied to the detenue. He submitted that the investigation is
still in progress.
14. In substance, Mr. Rai’s argument is, only relevant
information is required to be disclosed in the adjudication
proceedings and the case is at the investigation stage and no
SCN is issued. If and when the show cause notice (‘SCN’ for
short) is issued, appellant shall be at liberty to seek relevant
documents.
15. We have carefully considered the rival contentions and
perused the records.

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(2022) 8 SCC 162

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16. Undisputed facts of the case are, appellant has obtained
ESOPs in the form of Bank’s shares and sold them. The
allegation is that sale is pursuant to the UPSI. By the ex parte
interim order, SEBI has directed impounding a sum of ₹14.39
Crores and appellant has been barred from accessing the
securities market. Appellant had earlier challenged the ex parte
interim order and we have directed the appellant to deposit 50%
of the impounded amount. Matter is under investigation by the
SEBI.
17. Appellant’s request for inspection of certain documents
has been denied. Appellant’s case is, SEBI has obtained access
to the ‘inboxes’ of the emails of 26 officers in addition to 14
generic emails. According to SEBI, the said data is about 1.7 TB.
SEBI has searched those emails using key words and based on
the contents of those emails SEBI has passed the ex parte
interim order. It is also not in dispute that SEBI has made
available those documents relied upon by the SEBI.
18. Mr. Modi’s principal contention is that appellant has a right
to disclosure of all the material in SEBI’s possession. According
to him, SEBI has read a selected few emails and misdirected
itself on various ‘facts’ of the case which has resulted in issuance
of ex parte interim order. According to him, if the entire email
dump in SEBI’s possession is made available, the appellant shall
be in a position to explain as to how the ex parte order is
untenable and make out grounds to vacate the interim order. He
placed reliance on T. Takano and argued that appellant is
entitled for all the material in SEBI’s possession. He submitted
that appellant was working as the Whole Time Director of the
Bank. By virtue of his official capacity, he had access to all files

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and mails. But, in view of SEBI’s ex parte interim order,
appellant has been suspended and does not have access any
more.
19. Mr. Rai made a fine distinction with regard to the ‘stage’
of the case while considering the law laid down in T. Takano .
According to him, the principles laid down in T. Takano are
applicable at the stage of ‘adjudication’. In T. Takano it is held
thus:
“42. …….At the stage of adjudication, all documents useful
or relevant to the subject matter have to be disclosed to the
noticee, subject to exceptions noticed by the court.”

“62.1. The appellant has a right to disclosure of the material
relevant to the proceedings initiated against him. A deviation
from the general rule of disclosure of relevant information
[Natwar Singh v. Director of
was made in Natwar Singh
Enforcement , (2010) 13 SCC 255] based on the stage of the
proceedings. It is sufficient to disclose the materials relied on
if it is for the purpose of issuing a show-cause notice for
deciding whether to initiate an inquiry. However, all
information that is relevant to the proceedings must be
disclosed in adjudication proceedings.”
(Emphasis supplied)
20. The admitted position is, investigation is in progress and
SEBI is yet to decide whether to issue an SCN. Thus, as on date
there is no sight of SCN which sets the adjudication proceedings
in motion.
21. In our view, as held in T. Takano , noticee is entitled for all
relevant information in adjudication proceeding.
22. In State of Tamil Nadu and Anr. v. Abdullah Kadher
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Batcha and Anr. , a case involving preventive detention under

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(2009) 1 SCC 333

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the provisions of COFEPOSA Act, the Apex Court has held that
while examining whether non-supply of a document could
prejudice a detenue, the Court has to examine whether the
detenue would be deprived of making an effective representation
in the absence of a document. We may also record that in T.
Takano the Hon’ble Supreme Court of India has held that the
direction of the Constitution Bench of the Apex Court in
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Managing Director, ECIL, Hyderabad v. B. Karunakar , is to the
effect that non-disclosure of relevant information could render
the order of punishment void, only if the aggrieved person is
able to prove that prejudice has been caused to him due to non-
disclosure is founded both on the outcome and the process.
23. Appellant has been supplied with all the emails and other
material relied upon by the SEBI. According to the appellant,
SEBI has examined only selected emails to arrive at certain
conclusion leading to issuance of ex parte interim order. As
noted above all those documents have been made available to
the appellant and appellant has an opportunity to explain that
those relied upon documents did not warrant issuance of ex
parte interim order.
24. In our view, the settled position is, a noticee shall be
entitled for the relevant material at the stage of adjudication.
Since the matter has not reached the adjudication stage, in our
opinion, appellant’s prayer for the entire data does not merit
consideration.



9
(1993) 4 SCC 727

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25. In the result the appeal fails and it is dismissed .
26. Pending interlocutory application(s), if any, stand
disposed of.
27. No costs.

Justice P.S. Dinesh Kumar
Presiding Officer






Ms. Meera Swarup
Technical Member



Dr. Dheeraj Bhatnagar
Technical Member


05.03.2026
RHN
RAJALA
KSHMI
H NAIR
Digitally signed by
RAJALAKSHMI H NAIR
Date: 2026.03.05
12:06:09 +05'30'