Atcom Technologies Ltd. vs Sebi

Date of Decision : 16.8.2019

Appeal No.375 of 2018

Atcom Technologies Ltd. 6 Lalwani Industrial Estate 14, G.D. Ambekar Road, Wadala (W), Mumbai - 400 031. ..... Appellant

Versus

The Ld. Adjudicating Officer Securities and Exchange Board of India SEBI Bhavan, Mumbai - 400 051. ......Respondent

Ms. Rinku Valanju, Advocate with Ms. Hiral Shah, Advocate i/b. R.V. Legal for the Appellant.

Mr. Sumit Rai, Advocate with Mr. Chirag Bhavsar, Advocate i/b. MDP & Partners for the Respondent.

CORAM: Justice Tarun Agarwala, Presiding Officer Dr. C.K.G. Nair, Member Justice M.T. Joshi, Judicial Member

Per : Justice Tarun Agarwala (Oral)

1.

Against the order of the Adjudicating Officer imposing

a penalty of Rs.8 lakhs for delay in obtaining SCORES

authentication the present appeal has been filed. By the

impugned order a penalty of Rs.8 lakhs has been imposed. 2

2. The facts leading to the filing of the appeal is that

pursuant to the provisions of Section 15T of the Securities

and Exchange Board of India Act, 1992 (hereinafter referred

to as 'SEBI Act') all listed companies were called upon to

redress the grievances of the investors and inform them

within 30 days of the receipt of the complaints. A circular

dated 17.4.2013 was issued by which the companies were

required to obtain SCORES user id and password within 30

days from the date of the issuance of the circular. Failure by

the companies to obtain SCORES authentication would

indicate willfull avoidance and attract the provision of

Section 15A(a) of the SEBI Act.

3. Based on the aforesaid circular the appellant was

required to obtain SCORES authentication within 30 days but

the same was not obtained. According to the appellant, they

obtained the SCORES user id and password on

18th December, 2012 but subsequently found that the user id

and password related to the investors and not to the Company

and accordingly obtained fresh SCORES authentication on

22nd September, 2016. It was thus contended that the delay if

any was not deliberate but was done on account of an

inadvertent error. It was urged that no penalty should be 3

imposed and at best only a warning should be issued. It was

also contended that the appellant became a sick industry and

the matter was referred to BIFR were the matter remained

pending between 2014 to 2018 and that is another reason

why SCORES authentication could not be obtained within

the stipulated periods.

4. Having heard the learned counsel for the parties we

find that on account of not obtaining SCORES authentication

the complaints by the investors were being physically

forwarded by SEBI to the appellants. This resulted in the

delay in the disposal of the complaints. The purpose of

redressal of investor grievances was that the complaint were

required to be sorted out and informed to the investors within

30 days. Further, the said complaints were required to be

listed and disseminated on the website which was not done.

5. Apparently, there is a delay of four years in complying

with the circular dated 13th August, 2012. Consequently, the

appellant had violated the circular and was liable for penalty.

Considering the fact that the appellant became a sick industry

between 2014 to 2018 coupled with the fact that ultimately

the SCORES authentication was obtained though belatedly

we are of the opinion that in the interest of justice that for the 4

delay of four years the penalty is reduced from Rs.8 lakhs to

Rs.4 lakhs which shall be paid by the appellant within four

weeks from today.

6. In the light of the aforesaid the appeal is partly

allowed.

Sd/-

Justice Tarun Agarwala Presiding Officer

Sd/-

Dr. C. K. G. Nair Member

Sd/-

Justice M.T. Joshi Judicial Member

16.8.2019 Prepared and compared by RHN