‘One should never try to mislead and mis-state facts'

When stock market regulator SEBI passes an order against an entity, the Securities Appellate Tribunal (SAT) is where the entities turn to, for appealing against the order. Mr Justice Nauvdip Kumar Sodhi , recently demitted office after being the Presiding Officer of SAT for six years. Known for his no-nonsense approach, the Lahore-born, Shimla and Chandigarh-educated former Chief Justice of Kerala and Karnataka High Courts spoke to Business Line on his experience of over four decades in the legal profession.

Who was your role model?

I became a lawyer in 1965. Old time judges were our role models, quite a few of them were my father's contemporaries. They were very good human beings. One can't be a good engineer, doctor or a lawyer without being a good human being, by and large it is so.

There was one Justice P.C. Pandit who was my role model. He was a shy man who wouldn't brook any nonsense and would never insult lawyers. You could set your watches when they entered the court; such was their adherence to punctuality.

Has the attitude of judges changed today?

Nowadays judges are peevish and out to insult lawyers at the drop of a hat. Some are clannish and some others only help people close to them. There was this judge in Chandigarh who was against me. Every lawyer would come out of his court either crying or howling such was his behaviour. This is when I prayed to God that if ever I get a chance to be a judge, I would ensure no body comes out crying or howling. But, overall, the legal profession is very interesting.

You have been a lawyer and also a judge? Which side of the table is more interesting?

I spent 22 and half years at the bar and almost an equal number on the other side. The profession had its own charm and independence as one could take time out even if one was fairly busy. But there is a greater sense of satisfaction of having delivered justice. Justice is a godly function and it is not easy to deliver justice. Of course, one may also go wrong sometimes.

You had a flourishing practice? What happened to the clients?

Within two years of joining my father's practice he became a judge and I took it up full-time and grew the practice. Conscience would not permit you to pass on the clients to some one else, but once you got elevated to a judge you did not have a choice.

What is your advice to budding legal professionals?

One should never try to mislead and mis-state facts and win a case using technicalities in the court. Fight a case on its merits. The Bar has given me everything and the least I was able to do was to donate my library to the Chandigarh Bar.

How difficult it is to read up and remember so many laws? And how does one keep external pressure at bay while delivering justice?

In the course of time you get trained to read and interpret the law in the right perspective. As far as external pressures are concerned, there is none, your reputation precedes you.

What are your immediate plans?

Let's see. I might go back to teaching. I was a part time teacher at the Pnjab University and used to teach Tax and Industrial law. I won't mind giving an opinion on the securities market. Teaching would be a very satisfying job. If I had started teaching before being a lawyer I would have been a teacher.

There is a feeling that SAT mostly reverses what SEBI orders. What is your take?

The aggrieved has a right to appeal and we have the right to uphold or reject the appeal based on the merits of the case. That's what the tribunal is meant for.

Why did you choose SAT?

The appointment of the presiding officer of SAT is made in consultation with the Chief Justice of India and he suggested my name.

What was your experience of Mumbai?

A friend of mine said that the city of Mumbai grows on you and you never go back. Yes, the city has a buzz of its own. It grew on me but I am going back. Mumbai is a very interesting place to work. There was always something new to learn.

What did you learn?

Because of a new method adopted by delinquents to manipulate the market, a new proviso of law would come up for interpretation. They would be ahead of SEBI and we had to see that. Human ingenuity knows no bounds.

What was the first case that you decided on?

I had barely come to Mumbai when the Ketan Parekh case came up for my consideration.

He had resorted to very unique methods. I had very able assistance from SEBI and the lawyer who represented Mr Ketan Parekh. The case was heard over eight to nine appeals and arguments went on for 13-14 working days which are close to three weeks as we have a five-day week.

In fact, quite a few fraudulent and unfair trade practices came up in Ketan Parekh case. He used to raise money from different people which used to run into hundreds of crores for a few days. This was used to play in the stock market, make money and then returned. This used to go on as he utilised and re-utilised these funds.

The problem was, he and his entities were present on both sides of the transaction — buyer and seller. Now, how can that be possible? It is a contract and there should be two different parties. He used to artificially jack up stock prices himself and his counterparties were six to seven entities in which he was all in all, taking investment decisions himself. Everything he did was fictitious, manipulative and artificial. The Supreme Court affirmed the Ketan Parekh order.

In another case, a question arose on the definition of control. Once an open offer is triggered and when one entity acquires or sells, there is an agreement executed. The acquirer gets a veto. Though the management may be the same, there are certain three to five matters which an acquirer can veto.

Though I have no authority to tell you what you must do, I can tell you what you can't do. This is not control. Control is the ability to tell you what to do and the negative power of veto does not give you control, that's what I ruled.

raghavendrarao.k@thehindu.co.in

COMMENT NOW