Advance Lifestyles Ltd. vs Sebi
- CitationAppeal No.297 of 2019
Ratio decidendi
The rule this decision rests on
A company that was directed by the Whole Time Member to conduct an audit of a related intermediary's records and systems, and failed to do so, is in breach of that direction; an Adjudicating Officer's imposition of penalty for that non-compliance, where the company admits it did not conduct the audit or submit any audit report, does not suffer from any error of law and is sustainable.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Date of Decision : 21.8.2019
Misc. Application No.388 of 2019 And Appeal No.297 of 2019
Advance Lifestyles Ltd. 2nd Floor, West Wing, Electric Mansio, Appasaheb Marathe Marg, Worli, Mumbai-400025. ..... Appellant
Versus
Securities and Exchange Board of India SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra East, Mumbai - 400 051. ......Respondent
Mr. Dushyant B. Dholakia, Practicing Company Secretary for the Appellant.
Mr. Chirag Bhavsar, Advocate i/b. MDP & Partners for the Respondent.
CORAM: Justice Tarun Agarwala, Presiding Officer Dr. C.K.G. Nair, Member Per : Justice Tarun Agarwala (Oral)
Misc. Application No.388 of 2019
For the reasons stated in the application, the delay in
filing the appeal is condoned.
The Misc. Application is allowed. 2
Appeal No.297 of 2019
1.
The present appeal has been filed against the order of
the Adjudicating Officer imposing a penalty of Rs.1.5 lakhs.
Having heard the parties, we find that the Whole Time
Member (hereinafter referred to as 'WTM') passed an order
dated 22nd March, 2016 against Sharepro Services (I) Pvt.
Ltd. (hereinafter referred to as 'Sharepro') and other related
entities restraining them from buying, selling or dealing in
securities or associating themselves with the securities
market, either directly or indirectly, in any manner, till
further directions. The WTM further directed Companies
who were clients of Sharepro to conduct a thorough audit of
the records and systems of Sharepro with respect to dividend
paid and transfer of securities to determine whether dividends
have been paid to actual/beneficial owners and whether
securities have been transferred as per the provisions of the
law.
2. Inspite of this direction no audit was conducted in
terms of the direction given by the WTM and accordingly a
show cause notice was issued to the appellant. 3
3. The Adjudicating Officer noted the admission of the
appellant to the effect that they did not conduct the audit of
the records and systems of Sharepro in term of SEBI's order
dated 22nd March, 2016 nor found as to whether dividend was
declared. Since the audit of the record in the systems of
Sharepro was not conducted by the appellant and no audit
report to that effect was submitted, we are of the opinion that
the imposition of the penalty imposed by the Adjudicating
Officer does not suffer from any error of law. The Appeal is
dismissed summarily.
Sd/-
Justice Tarun Agarwala Presiding Officer
Sd/-
Dr. C. K. G. Nair Member
21.8.2019 Prepared and compared by RHN
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