Amtek Auto Ltd. vs Sebi

Date of Decision : 12.10.2017

Misc. Application No. 123 of 2016 And Appeal No. 208 of 2016

Amtek Auto Ltd. 16, Amtek Auto Ltd. Rozka Meo, Sohna, Mewat - 122103, Haryana. ...Appellant

Versus

Securities and Exchange Board of India SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051. ...Respondent

Ms. Rinku Valanju, Advocate for the Appellant.

Mr. Rajesh Nagory, Advocate with Mr. Pulkit Sukhramani, Advocate and Ms. Vidhi Jhawar, Advocates i/b The Law Point for the Respondent.

CORAM : Justice J.P. Devadhar, Presiding Officer Jog Singh, Member Dr. C.K.G. Nair, Member

Per : Dr. C.K.G. Nair, Member (Oral)

Misc. Application No. 123 of 2016:

By this Misc. Application appellant seeks condonation of 29 days

delay in filing this appeal. For the reasons stated in the Misc. Application,

the delay is condoned. Misc. Application stands disposed of accordingly.

Appeal No. 208 of 2016:

1.

This appeal has been preferred by the appellant for challenging the

order of the Adjudicating Officer ('AO' for short) of Securities and

Exchange Board of India ('SEBI' for short) dated December 29, 2015. By 2

the said order, a penalty of Rs. 5 lakh has been imposed on the appellant

under Section 15C of the SEBI Act, 1992 for failure to redress investor

grievances within the time frame stipulated under the relevant circulars.

2. The appellant is a listed company and its shares are listed in the

Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). As

per the circular dated June 3, 2011 issued by SEBI all listed companies have

been, inter alia, required to process investor grievances through SEBI

Complaints Redress System ('SCORES' for short) electronically. The listed

companies are, therefore, required to obtain SCORES authentication as

stipulated in the 2011 Circular (supra) as well as subsequent Circulars of

SEBI dated August 13, 2012 and April 17, 2013 reiterating the requirement.

Since the appellant herein have failed to redress some investor grievances in

tune with these circulars, an inquiry was ordered and the AO was appointed

vide SEBI order dated March 30, 2015. A show-cause notice was issued to

the appellant on August 18, 2015. In the show cause it was stated that three

investor complaints were not redressed. However, based on the reply

furnished by the appellant on September 22, 2015 and subsequent finding by

the Inquiry Officer, it has been held in the impugned order that two of the

three investor grievances only are pending. These grievances were that of

Shri Surender Singh Rawat / Deepak Singh Rawat dated March 17, 2014

regarding non-updation of address/signature/correction etc. and grievance of

Shri Lokesh dated April 1, 2014 regarding non-receipt of dividend.

3. It is the submission of Ms. Rinku Valanju, Learned Counsel

appearing on behalf of the appellant that both these grievances had been in

fact redressed in a timely manner and evidence to that effect was produced

before the AO. However, the AO has not accepted those records and thereby 3

holding that the investor grievances as pending. For instance, as far as the

complaint of Shri Surender Singh Rawat / Deepak Singh Rawat dated

March 17, 2014 regarding dividend / transfer etc., the pending complaint has

been with respect to another company by the name Aptech Limited. As far

as the dividend to be received from the appellant it is clearly stated in the

e-mail from Shri Deepak Rawat that they have received the dividend of

Rs. 65/- which was paid on April 30, 2014. Accordingly, it is clear that the

complaint raised was against Aptech Limited and not against the appellant

herein.

4. Similarly, in respect of the complaint of Shri Lokesh dated April 1,

2014, the screen-shot of the payment advice was produced by the appellant

to the AO and is part of the appeal paper book at page 68. The screen-shot

clearly states that the dividend of Rs. 100/- has been paid on June 9, 2014.

5. Having perused the documents submitted by the appellant before us it

is clear that sufficient evidence was produced by the appellant before the

AO to show disposal of the two investor grievances recorded as pending in

the impugned order. Neither the screen shot at page 68 nor the trail of

emails at pages 71 to 73 of the appeal paper book have been taken as

evidence of redressing grievances of the investors. Neither in the impugned

order nor Counsel for SEBI at the hearing before us could demonstrate as to

how the screen shot relied upon by the appellant does not depict the true

state of affairs. However, we agree with the argument advanced by the

Counsel for SEBI that though these records had been produced, they were

not uploaded as ATRs in the SCORES itself thereby not fully following the

procedure as required under the SCORES. In such a situation SCORES

would show the investor grievances as pending.

4

6. In view of the above stated reasons, we find that though the appellant

had resolved the grievances of the investors, there was delay in uploading

the correct position / ATR in the SCORES. Accordingly, the documentation

process followed by the appellant was not fully in tune with the SCORES

requirement. However, in view of the fact that the two grievances of the

investors had been resolved by the appellant and no repetitive violations

have been brought before us, in the facts and circumstances of the case, we

find that the penalty of Rs. 5 lakh imposed on the appellant is too harsh and

therefore we set it aside. However, appellant is hereby warned not to repeat

such mistakes relating to maintaining proper documentation and uploading

of ATRs etc. in time in future. Given the facts and circumstances a warning

is sufficient to do justice in the matter.

7. Appeal is disposed of in the above terms with no order as to costs.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Jog Singh Member

Sd/-

Dr. C.K.G. Nair Member 12.10.2017 Prepared and compared by: msb