Failure to serve the show-cause notice renders the adjudication order violative of natural justice.

SEBI found that Magnox Infraprojects Limited had raised ₹2.31 crore from 2,110 persons through redeemable preference shares in 2012–13, contrary to applicable company and securities laws.

The appellant, a director during part of the relevant period, was proceeded against by SEBI and an order dated 20 February 2018 directed him, among other things, to refund the money collected.

He appealed, alleging that he had not been served with the show-cause notice (SCN) or the impugned order.

SEBI relied on a speed-post acknowledgment sent to an address in its records.

The Tribunal condoned the delay in filing the appeal.

1. Whether the appellant was served with the SCN and the impugned order in accordance with law

2. Whether the impugned order should be set aside qua the appellant for want of service and consequent denial of an opportunity to defend

The Tribunal considered the principles of natural justice, particularly the requirement that a person affected by an adjudicatory order receive notice and an opportunity to defend.

The proceedings arose under Sections 11(1), 11(4), 11A and 11B of the SEBI Act, 1992, and Section 73(2) of the Companies Act, 1956, read with Section 27(2) of the SEBI Act; the earlier proceedings also concerned Sections 56, 60, 2(36) and 73 of the Companies Act, 1956.

No precedent was cited.

The Tribunal found no material establishing that the appellant had been served with either the SCN or the impugned order.

The speed-post acknowledgment produced by SEBI showed only the appellant’s name and the general address “Odisha – 756 117”; its signature did not match the appellant’s signature in the appeal memorandum or on his PAN card.

On that record, the Tribunal held that service had not been proved and that the appellant had been denied the notice and opportunity required by natural justice.

It set aside the 20 February 2018 order qua the appellant, directed him to appear before SEBI on 16 November 2026 without further notice, and required SEBI to provide a hearing and pass a fresh order in accordance with law.

All contentions were left open; there was no order as to costs.