Confirmatory Order in the matter of Dhyana Finstock Limited[SAT Appeal No.43/2017][SAT Appeal No.160/2017]

In respect of: S.No. Noticee PAN 1 Azim Farooq Hawa AAAPH2774G 2 Farooq Kasam Hawa AAAPH2775H 3 Zahir Farooq Hawa AAAPH2776E 4 Noorbanu Farooq Hawa AAAPH8271Q 5 Rupal M Shah AAEPR5198J 6 Manish B Shah AAIPM4715G 7 Bhavini S Shah AEVPB8830Q 8 Sanjay P Shah AMIPS4672G 9 Kumar A AAEPK1457D 10 M Mathivanan AAEPM4368F 11 Uttam Chunnilal Jain AAFPJ3365A 12 Reenu Jain AEYPJ8903R 13 Mohit Airen ABXPA1053F 14 Alok Gupta ACHPG2799K 15 Rajesh Pukhraj Raka (Huf) AAFHR7898G 16 Dilipkumar Manilal Chokshi AAKPC1264A 17 Raj Rattan ADXPR0831L 18 Ashwinkumar K. Patel AGAPP9577F 19 Gaurav Manoj Agrawal AQMPA9216A 20 Pradip Harkhchand Doshi AAHPD4722B 21 Chetna H Chandan AHGPC9842D The aforesaid entities are hereinafter referred to by their respective names or collectively as ‘the Noticees / preferential allottees.”

1. SEBI, vide an ad interim ex-parte order dated June 01, 2016 (hereinafter referred to as “interim order”) in the matter of Dhyana Finstock Limited (hereinafter referred to as Order in the matter of Dhyana Finstock Limited "Dhyana" or "the company"), restrained 76 entities, including the aforesaid 21 entities (hereinafter referred to as "Noticees"), from accessing the securities market and further prohibited them from buying, selling or dealing in securities in any manner whatsoever, till further directions. Further, it was also directed that BSE shall withhold the pay-out of funds for the trades in Dhyana executed on July 27, 2015 and keep the same in interest bearing escrow account and shall release the securities to the buyers for the trades executed on July 27, 2015. The persons/entities against whom the interim order was passed were advised to file their objections, if any, within twenty one days from the date of the order and, if they so desire, to avail themselves of an opportunity of personal hearing before SEBI. 2. The interim order was passed taking into account facts and circumstances more particularly described therein and summarised, inter-alia, as under: a) The equity shares of the company were listed on Ahmedabad Stock Exchange (ASE) in 1996. There was no trading history of the company at ASE. b) On November 30, 2013, Dhyana made a preferential allotment of 64,25,000 equity shares at the price of ₹ 10 per share to 49 entities. c) The equity shares allotted on preferential basis to aforesaid allottees were locked-in for a period of one year i.e. up to November 30, 2014 in terms of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. Thus, the shares held by 49 entities who were allotted shares in the preferential allotment were not tradable till November 30, 2014. d) On June 13, 2014 this company with poor fundamentals (no income, no fixed assets) and no trading history was listed on BSE from ASE.

Company connected entity was instrumental in establishing equilibrium price at BSE on June 13, 2014 in the Special Pre Open Session (SPOS). e) Between June 13, 2014 and November 28, 2014, ("Patch 1") the price of the scrip opened at ₹ 251 and closed at ₹ 355. During this period, the scrip was traded with an average volume of 5277 shares per day and total volume of 5,75,235 shares in 109 trading days. f) Thereafter, between December 01, 2014 and July 27, 2015 ("Patch 2"), the price of the scrip opened at ₹ 351 and closed at ₹ 405.7. During this period, the scrip was traded with an average volume of 24,376 shares per day and total volume of 39,97,754 shares in 164 trading days and the entities connected / related, directly or indirectly, to Dhyana (forming part of a group named 'Dhyana Group' and also called named as 'exit providers'), started providing hugely profitable exit to the preferential allottees. g) During Patch 2, out of the 49 preferential allottees, 39 allottees exited and sold 31,67,410 shares and have in aggregate made profit of ₹.107.43crores. Of the shares sold by preferential allottees, 18,22,678 shares representing 57.54% shares were bought by Dhyana Group.

Of the total purchase (23,03,449 shares) of Dhyana group, 18,37,121 shares (80%) were bought by them from the preferential allottees. h) Certain private corporate bodies connected to each other and to Dhyana were observed to have given funds to exit providers. Some of these exit providers were immediately transferring the funds to trading members for purchase of shares of Dhyana. i) During the patch 2, since July 2015 several SMS were circulated among investing public to the effect of inducing them to buy the shares of Dhyana specially highlighting to make "Jackpot "profit on July 27, 2015. j) In the influence of SMS tips investors placed buy orders on July 27, 2015 at price ranging from ₹ 396-₹ 406 resulting in purchase of 3,18,971 shares from the net sellers. k) The 29 Net sellers who were part of Dhyana group sold 2,62,682 shares on July 27, 2014 representing 82.35% of total shares bought by the investors in the influence of SMSs. There were 6 Preferential Allottees who sold 53,289 shares on July 27, 2015 and made profit of ₹21.65 crores. 3. The allegations against Noticees as mentioned in the interim order are that, the acts and omissions of Noticees are ‘fraudulent’ as defined under regulation 2(1)(c) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (‘PFUTP Regulations’) and are in contravention of the provisions of Regulations 3(a), (b), (c) and (d) and 4(1), 4(2)(a), (b), (e) (g) and (r) thereof and section 12A(a), (b) and (c) of the Securities and Exchange Board of India Act, 1992. These allegations have been made, inter alia, on the basis of following: a) Preferential allotment was used as a tool for implementation of the dubious plan, device and artifice of Dhyana group and preferential allottees.

Prior to the trading in its scrip during the Examination Period, Dhyana did not have any business or financial standing in the securities market. The traded volume and price of the scrip increased substantially only after Dhyana group and preferential allottees started trading in the scrip. Dhyana group entities were trading in the scrip above the LTP and their trades resulted into artificial increase in price. b) Dhyana group entities and preferential allottees traded amongst themselves as substantiated by their trading details given in Table 7 and Annexure A of the interim order. There was no change in the beneficial ownership of the substantial number of traded shares as the buyers and sellers both were part of the common group and were acting in league/concert to provide LTCG benefits to the allottees. In the process, Dhyana group and allottees used securities market system to artificially increase volume and price of the scrip for making illegal gains to and to convert ill-gotten gains into genuine one. c) The net sellers on July 27, 2015, who were either preferential allottees themselves or had purchased shares of preferential allottees at a high price during the examination period, may have availed the services of some unscrupulous elements to send the SMS and thereafter dumped the shares of Dhyana so acquired on unsuspecting investors by employing a scheme of sending fake SMS inducing them to buy in the scrip.

The facts and circumstances discussed in the interim order further indicate a scheme, device and artifice to dump shares on July 27, 2015 in a pre-planned manner i.e. by employing a scheme of sending fake SMS inducing investors to buy in the scrip. 4. Pursuant to the interim order, some of the entities filed their replies in the matter. Information/documents which were relied upon by SEBI for passing the interim order were also provided to entities who had requested for the same. In the interim, some of the entities filed their replies in the matter and sought opportunity of personal hearing. They were granted opportunity of personal hearing on September 29, 2016. Few of the Noticees also filed additional written submissions after availing the personal hearings. 5. Out of total 76 entities debarred vide interim order dated June 01 2016 in the matter; the confirmatory orders have been passed in respect of 34 entities. The proceedings against 21 Noticees are being dealt with in this order. The proceedings in respect of remaining entities would be dealt with separately in compliance with the principles of natural justice.

6. The replies/submission of 21 Noticees are summarised below. It is noted that certain Noticees have submitted replies that are similar /identical in nature. Such replies have been grouped together for the sake of brevity. In addition, various case laws referred by the Noticees are also summarized below: Gaurav Manoj Agrawal and Rajesh Pukhraj Raka (HUF) (both represented by Mr. Ashish Satpute, Advocate): a. They had denied all allegations made against them in the order. b. Their role has not been explained in the entire order. Their names have been simply inserted without evidence only because they are preferential allottee and they have partially sold their shares. c. They have purchased the shares after discussion with the financial advisor and broker. d. Out of the 1,00,000 shares so acquired by each of them they have sold only few shares of the company. It can be safely concluded that such a miniscule amount of trade cannot be alleged for manipulation in the price and volume of the scrip in any manner. e. They have sold the part of the stocks under question in the month of March 2015 and they did not entered in to any transaction in Dhyana in the month of July 2015, i.e. the period of controversy. f. The investment made by them in the company was as per the SEBI (ICDR) Guidelines and Companies Act.

Also the shares allotted to them were locked in for 1 year as per the said guidelines. The act of investment and sale of shares is lawful act done by them. g. The direction of debarring them is an arbitrary decision of SEBI. The order had a great impact on his reputation in their personal and professional life. This order had caused great hardship to them without any wrong doing on their part. h. Power to issue directions under section 11, 11(4) and 11(B) is a drastic power and and needed to be used only in extraordinary and exceptional SEBI needs to justify the use of said action against them. Mere debarring them without justification is irresponsible act done by SEBI. i. The entities deny that they are in any way connected with the Company, its Promoter/directors, Dhyana Group Entities/ Preferential Allottees, Exit Providers, Trade Manipulators/SMS tips providers. j. They had no role in price rigging and have no relation with alleged entities that were responsible for price rigging. k. They submit that long-term capital gains arising on account of sale of equity shares listed in a recognised stock exchange, i.e., LTCG exempt under section 10(38) of Income Tax Act, 1961. Hence, they cannot be charged for the allegations and manipulation of tax evasion and money laundering. l. Accordingly, the entities requested to set aside the arbitrary ad interim order of SEBI against them.

Alok Gupta (represented by Mr. Vinay Chauhan, Advocate & Mr. K. C. Jacob, Advocate): a. He denied all allegations made against him in the order. b. His role has not been explained in the entire order. His name has been simply inserted without evidence only because he is a preferential allottee and he has partially sold their shares. c. The said Order is vitiated by gross violation of principles of natural justice, in as much as no opportunity was provided to him to explain his version and the circumstances as stated in the said Order do not justify dispensation of pre-decisional hearing. Also, granting a post decisional hearing would not cure the defect of not granting a hearing to him before passing a drastic order. d. In October 2013 he was informed of a proposal to invest in preferential allotment of equity shares made by DFL. He subscribed to 1,00,000 shares and paid consideration amount of ₹. 10,00,000. e. The shares allotted to him were locked in for 1 year. However, in February, 2015 he required some funds for his internal purpose and hence decided to gradually start selling the shares in the market as and when he required these funds.

During the period from February 2015 to April 2015 he sold 37,865 shares at the market price at which it was trading in the exchange. As on date he continues to hold 62135 shares of the Company. His last sale transaction was on 15/04/2015. Further, sales made by him had no connection/ nexus with the alleged SMS circulated by other entities. f. He has sold the part of the stocks under question in the month of March 2015 and did not enter in to any transaction in Dhyana in the month of July 2015, i.e. the period of controversy. g. The investment made by him in the company was as per the SEBI (ICDR) Guidelines and Companies Act. Also the shares allotted to him were locked in for 1 year as per the said guidelines. The act of investment and sale of shares is lawful act done by him. h. The direction of debarring him is an arbitrary decision of SEBI. The order had a great impact on his reputation in his personal and professional life. This order had caused great hardship to him without any wrong doing on their part. i. Power to issue directions under section 11, 11(4) and 11(B) is a drastic power and and needed to be used only in extraordinary and exceptional SEBI needs to justify the use of said action against him.

Mere debarring him without justification is irresponsible act done by SEBI. SEBI has not made out any fact as to what is the eminent danger caused by him or what is the urgency which require SEBI to exercise power under Section 11 and 11 B it is clear that there was no imminent danger or urgency so as to exercise powers under section 11 and 11(B) dispensing with the pre decisional hearing in gross violation of principles of natural justice. j. The entity deny that he is in any way connected with the Company, its Promoter/directors, Dhyana Group Entities/ Preferential Allottees, Exit Providers, Trade Manipulators/SMS tips providers. k. He had no role in price rigging and has no relation with alleged entities that were responsible for price rigging. l. He submit that long-term capital gains arising on account of sale of equity shares listed in a recognised stock exchange, i.e., LTCG exempt under section 10(38) of Income Tax Act, 1961. Hence, he cannot be charged for the allegations and manipulation of tax evasion and money laundering. m. Accordingly, the entity requested to set aside the arbitrary ad interim order of SEBI against him.

He also requested that his demat account be unfreezed or alternatively, he be allowed to sell his shareholding in the scrips other than the impugned scrip, since the investigation is qua the impugned scrip only and to utilise the sale proceeds, for his requirements. Chetna H. Chandan (represented by Kirti S. Chandan, authorized representative) & Pradip Harkhchand Doshi (appeared in person): a. They have denied all allegations made against them in the order. b. The entities have submitted that their names have been inserted in the list of debarred entities under the heading preferential allottees; however, their roles are not explained in the entire order. c. They are not involved in any of the manipulations mentioned in the order. None of their trades can be termed as the scheme of money laundering. d. They have traded in their shares as normal course of business in the securities market and as per the lawful provisions. e. They are High Net worth individual (HNI) and have invested/traded in many scrips. The order has adversely affected their investments and reputation. All their business has come to standstill.

This order had a great negative impact on reputation and livelihood. It had caused them great hardship. f. The investment made by them in the company was as per the SEBI (ICDR) Guidelines and Companies Act. Also the shares allotted to them were locked in for 1 year as per the said guidelines. g. They have sold their maximum holding before 27/07/2015 i.e. the day on which the SMS scam took place. Hence, it is obvious that they cannot be alleged for the root cause of the order i.e. fraudulent SMS tips to deceit the investors. h. The investment made in the Dhyana was made from their owned funds. They have invested in many scrips and this order has hampered their business, liquidity, livelihood, growth, etc. i. SEBI took this step arbitrary and thus defaming them in the society. SEBI order has adversely impacted reputation in their personal and professional life. This order had caused great hardship to them without any wrong doing on his part. j. All their trades are genuine and with bonafide intention. k. Power to issue directions under section 11, 11(4) and 11(B) is a drastic power and and needed to be used only in extraordinary and exceptional SEBI needs to justify the use of said action against them.

Mere debarring them without justification is irresponsible act done by SEBI. This act of SEBI has caused severe loss to them as they are not able to earn her livelihood due to the mental pressure caused by the said order. l. The entities deny that they are in any way connected with the Company, its Promoter/directors, Dhyana Group Entities/ Preferential Allottees, Exit Providers, Trade Manipulators/SMS tips providers. m. They submit that long-term capital gains arising on account of sale of equity shares listed in a recognised stock exchange, i.e., LTCG exempt under section 10(38) of Income Tax Act, 1961. Hence, they cannot be charged for the allegations and manipulation of tax evasion and money laundering. n. Their trades were independent and done by their own decision. Further, when SEBI found the initial listing of the company suspicion then why didn't they took remedial action at the time when the company got listed at BSE. o. Interim order is passed when there is urgency in the matter; this order is passed after more than 2 years from the listing of Company at BSE, after 12 months is of their trades and also after withholding of payout since 11 months.

What took so long for SEBI to pass interim order, if they presume or if they had prior knowledge of any misuse of system? p. Hence, they have requested to reverse the order restraining them from accessing securities market and buying, selling, or dealing in securities market directly or indirectly in any manner. q. Further, the entities have also requested that Pending investigation in the matter following interim/alternative reliefs may be allowed: (a)Permission to liquidate stocks/securities held in their portfolio and use the same for their needs; (b) Permission to avail rights/bonus, etc. accruing on the shares held by them. Mohit Airen (represented by Mr. Vinay Chauhan, Advocate & Mr. K. C. Jacob, Advocate): a. He has denied all allegations made against him in the order. b. The said Order is vitiated by gross violation of principles of natural justice, in as much as no opportunity was provided to him to explain his version and the circumstances as stated in the said Order do not justify dispensation of pre-decisional hearing. Also, granting a post decisional hearing would not cure the defect of not granting a hearing to him before passing a drastic order.

c. In October 2013 he was informed of a proposal to invest in preferential allotment of equity shares made by DFL. He subscribed to 1,00,000 shares and paid consideration amount of ₹. 10,00,000. d. He bought from his own funds on preferential basis which were locked in for one year. However, in February, 2015 he required some funds for his internal purpose and hence decided to gradually start selling the shares in the market as and when he required these funds. During the period from February 2015 to April 2015 he sold 36945 shares and sale proceeds of Rs.1.25 crore was utilised for business and internal purpose. The balance 63055 shares are still lying with him. Also shares have been sold on BSE BOLT system, which provides an anonymous platform where buying and selling party are not known to each other. e. The entity has denied any connection with the Company, its Promoter/directors, Dhyana Group Entities/ Preferential Allottees, Exit Provider, fraudulent SMS/email providers as alleged in the order. f. He did not use the securities market system to artificially increase volume and price of the scrip for making illegal gains. g. The entity submitted that he has sold the part of the stocks under question in the month of March 2015 and did not enter in to any transaction in Dhyana in the month of July 2015 when the SMS tips were circulating in the market.

He has neither played any role in the SMS scam and nor allegation regarding the same has been set out in the Order against him. Further, no connection of his has been established with the manipulators in the Order. h. As per the order, he has been alleged for violation of SEBI - Prohibition of Fraudulent and Unfair Trade Practices Regulations, it is fact to be noted that, none of his trades are alleged to be structured, synchronized, manipulative, reversal, off market, with meeting of mind or pre-decided trades, etc. i. The direction of debarring him is an arbitrary decision of SEBI. The order had a great impact on his reputation in his personal and professional life. This order had caused great hardship to him without any wrong doing on their part. j. Power to issue directions under section 11, 11(4) and 11(B) is a drastic power and and needed to be used only in extraordinary and exceptional SEBI needs to justify the use of said action against him. Mere debarring him without justification is irresponsible act done by SEBI. SEBI has not made out any fact as to what is the eminent danger caused by him or what is the urgency which require SEBI to exercise power under Section 11 and 11 B it is clear that there was no imminent danger or urgency so as to exercise powers under section 11 and 11(B) dispensing with the pre decisional hearing in gross violation of principles of natural justice.

k. He denied that his act and/or omission amounts to fraud, as he had no intentions of creating any kind of artificial price rise, nor did he conceal any fact of make false representation. He cannot be held liable for any violation of the SEBI Act of the PFUTP Regulations and strongly state that the shareholders cannot be held liable for the alleged misdeeds of the promoters of the company or their related entities. l. He denied that there are acts and omissions pertaining to him which are fraudulent. He has not contravened any of the provisions of Regulations 3(a), (b), (c) and (d) and 4(1), 4(2)(a), (b), (e) and (g) thereof and section 12A(a), (b) and (c) of the SEBI Act. m. Accordingly, the order passed against him debarring him from accessing the securities market in any manner be lifted and permitted to deal in securities market. Further, he also requested that his demat account be un freezed or alternatively, allowed to sell his shareholding in scrips other than the impugned scrip and to utilize the sale proceeds. Ashwin Kumar K Patel (represented by Mr. Mayukh Pandya, consultant): a. He has denied all the allegations made against him in the order.

Requesting SEBI to provide specific evidence against him. None of his trades can be termed as the scheme of money laundering and traded in normal course of business in the securities market as per the lawful provisions. b. There is no material on record to show that false and misleading appearance in trading was given to the investors by him in connivance with the other alleged entities, by executing the impugned transactions. c. He submitted that his name had been wrongly lumped, bunched and clubbed with the alleged group entities without any cogent evidence. d. He is a High Net worth Individual (HNI) and has traded/invested in many scrips. This order had a great negative impact on reputation and livelihood. It had caused great hardship. e. He had acquired 50,000 share of Dhyana Finstock Ltd. on 5th February, 2014 on preferential basis which were locked in for one year and was in Compliance with SEBI (ICDR) guidelines and relevant provisions of Companies Act.7. f. Out of 50,000 preferential shares allotted sold only 9,500 shares from 24 February, 2015 to 16 March, 2015 due to requirement of fund.

The shares were sold before 27/07/2015 i.e. the day on which the SMS scam took place. Hence it is obvious that he cannot be alleged to be part of any scam i.e. fraudulent SMS tips to deceit the investors. The Order also does not allege him for the same.

g. He does the business of Farming/Agriculture and investor in stock market. He is not directly or indirectly involved with Dhyana Group Entities and /or Exit Providers, promoters/directors mentioned in the above referred Order. h. He made the investment in the company from his own funds and invested in many scrips and this order has hampered his business, liquidity, livelihood, growth, etc. i. He has been alleged for violation of SEBI (PFUTP), it is fact to be noted that, none of his trades are alleged to be structured, synchronized, manipulative, reversal, off market, with meeting of mind or pre-decided trades, etc. j. The entity deny that he is in any way connected with the Company, its Promoter/directors, Dhyana Group Entities/ Preferential Allottees, Exit Providers, Trade Manipulators/SMS tips providers k. It is alleged by him that SEBI has used its powers under section 11 (B) of SEBI Act, which is drastic power and needed to be used only in extraordinary and exceptional cases. SEBI needs to justify the use of said action against him. l. He submit that Long Term capital gains arising on account of sale of equity shares listed in a recognized stock exchange, i.e., LTCG exempt under section 10(38) of Income Tax Act.

Hence, he cannot be charged for the allegations and manipulation of tax evasion and money laundering. m. The interim order is vitiated by gross violation of principles of natural justice, equity and fair play as the same has been issued arbitrarily by SEBI without any evidence. SEBI needs to provide justification and documentary evidence with regards to his involvement in the alleged illegal activities, which is nowhere mentioned in the Said Order. n. His name is wrongly inserted in the Order and requesting to reverse the order restraining him from accessing securities market and buying, selling, or dealing in securities market directly or indirectly in any manner. o. When SEBI found the initial listing rates of the Company Suspicious then why didn't they took remedial action at the time when the company got listed at BSE. p. Interim order is passed when there is urgency in the matter; this order is passed after more than 2 years from the listing of Company at BSE, after 15 months of my trades. What took so long for SEBI to pass interim order, if they presume or if they had prior knowledge of any misuse of system? q. The ex parte interim order debarring him from accessing the Securities market in any manner is passed against principles of natural justice as it was passed without giving an opportunity of hearing and hence is ab initio illegal and deserved to be set aside. r. Further, the entity has also requested that Pending investigation in the matter following interim/alternative reliefs may be allowed:  to liquidate stocks/securities held in his portfolio and use the same for his needs;

 to avail rights/bonus, etc. accruing on the shares held.  to access securities market and to buy, sell or in other manner deal in Securities. Manish B Shah and Rupal M Shah (represented by Mr. Nithish Bangera, Practicing Company Secretary): a. The entities have denied all the allegations made against them in the order. b. Allotted 150000 shares on preferential basis whilst the company was listed at ASE. The shares allotted were locked in for 1 year as per ICDR guidelines & Companies act. They sold shares after holding the same for almost 15-18 months. c. Their investment in DFL is one of their trade decisions. They have invested in Dhyana Finstock Limited in the normal course from their owned funds. They have invested in the preferential allotment in DFL at the instance of Mr. Vishaal Tamker. d. The act of allotment and sale of investment was done lawfully and also have not misused the stock exchange system. All trades are genuine and lawful. As a result of this order, they are not able to do any business and live a normal life. This is a violation of Right to live and do business inherited to them by the Indian Constitution. e. The order is based on the assumptions, presumptions and guesses of SEBI.

The order speaks about the fraudulent SMS tips by certain entities which induced gullible investors to buy shares. However, the order itself does not allege them for any of the above allegations. f. They have sold all their shares before 27/07/2015, hence, they cannot be alleged for SMS scam. g. The entities submit that they are in no way connected with the Company, its Promoter/directors, Dhyana Group Entities/ Preferential Allottees, Exit Providers, Trade Manipulators/SMS tips providers and counterparties. h. They have invested in the company as Long term capital, and also hold the shares for almost 18 months. LTCG is government scheme and is exempt under Income Tax Act. Their trades cannot be termed as manipulative and dishonest. i. They submit that, SEBI feels that preferential allotment is genuine as SEBI has not debarred all preferential allottees. 10 preferential allottees who have not sold their holdings are not debarred. It means SEBI feels that acquisition/purchase of shares is genuine and selling of acquired shares is wrongful act. j. The interim order is vitiated by gross violation of principles of natural justice, equity and fair play as the same has been issued arbitrarily by SEBI without any evidence.

SEBI needs to provide justification and documentary evidence to them with regards to the said order.

k. They requested to set aside the directions issued against them under Section 11(4) and Section 11B of the SEBI Act, 1992 in the interest of justice and equity. l. The entities have also submitted that they do not want such interim and generalised reliefs as provided by SEBI in other cases. Sanjay P Shah and Bhavini S Shah (represented by Mr. Nithish Bangera, Practicing Company Secretary): a. The entities have denied all the allegations made against them in the order. b. The order had a great impact on their reputation in personal and professional life. c. They have sold all their shares before 27/07/2015, hence, they cannot be alleged for SMS scam. d. Their investment in DFL is one of their trade decisions. They have invested in Dhyana Finstock Limited in the normal course from their owned funds. They have invested in the preferential allotment in DFL at the instance of Mr. Vishaal Tamker. e. The investment in the Company was made as per the SEBI (ICDR) guidelines and Companies Act and by investing their owned funds. Also the shares allotted to them were locked in for 1 year as per the said guidelines.

The act of investment and sale of shares is lawful act. f. The act of allotment and sale of investment was done lawfully and also have not misused the stock exchange system. All trades are genuine and lawful. As a result of this order, they are not able to do any business and live a normal life. This is a violation of Right to live and do business inherited to them by the Indian Constitution. g. The entities submit that they are in no way connected with the Company, its Promoter/directors, Dhyana Group Entities/ Preferential Allottees, Exit Providers, Trade Manipulators/SMS tips providers and counterparties. h. The Long Term capital gains Long-term capital gains arising on account of Sale of equity shares listed in a recognised stock exchange, i.e., LTCG exempt under section 10(38) of Income Tax Act. Hence, they cannot be charged for the allegations and manipulation of LTCG. i. They submit that, SEBI feels that preferential allotment is genuine as SEBI has not debarred all preferential allottees. 10 preferential allottees who have not sold their holdings are not debarred. It means SEBI feels that acquisition/purchase of shares is genuine and selling of acquired shares is wrongful act. j. The interim order is vitiated by gross violation of principles of natural justice, equity and fair play as the same has been issued arbitrarily by SEBI without any evidence.

SEBI needs to provide justification and documentary evidence to them with regards to the said order.

k. In capital market investors invest in shares mainly to earn profit. Even their act of making investment and selling the same was the part of trading process of Securities market. No one is expected to hold the shares till eternity. They made investment with a view to en cash the same at a future date and has done the same. l. They requested to set aside the directions issued against them under Section 11(4) and Section 11B of the SEBI Act, 1992 in the interest of justice and equity. m. The entities have also submitted that they do not want such interim and generalised reliefs as provided by SEBI in other cases. Dilipkumar Manilal Chokshi (appeared in-person along with Mr. Viral Shah, Chartered accountant): a. During course of business, he came to know one Mr. Pritesh Y. Shah of Ahmedabad who is also associated with him as business colleague since long and his dues also. b. Mr Pritesh Y Shah offered him that he has got an avenue by which he will help realise his dues in which he will be allotted certain shares in a listed company named Dhyana Finstock Ltd which is expanding its horizons in a big way in micro finance Sector and also intending to apply for payment bank/Small bank licence to Reserve bank of India.

It is also proposing to be listed at Bombay Stock exchange Ltd later on soon then. c. Mr Pritesh Shah has shown him various documents evidencing new projects and also explained future beneficial positions by the said company in the micro finance sector which is in thing in the then times and promised his dues will be recovered over a period of time. d. The shares proposed to be allotted will have lock in period of one year and thereafter, he can dispose it off subject to liquidity in trading of said Stock. e. Mr Pritesh shah gave him confidence that through such transaction, he will get his dues back after lapse of lock in period rather than to wait for indefinite period for his dues. f. After a lot of debate and interaction, he agreed to involve in such share allotment transaction but put a disclaimer that he will not be spending a penny for that and it is for Mr Pritesh shah to settle share purchase transaction in his name. g. Thereafter, he was not made known the way to subscribe shares in his name. Mr Pritesh Shah somehow managed to fund his account to enable application in preferential issue of the said company.

Mr Pritesh Shah got managed Rs.30,00,000/- in his account for the specific purpose of application only. h. He got an allotment letter from the company for allotment of 3,00,000 (Three lacs only) equity shares of Rs 10/- each on 30th November, 2013 which will remain under lock in for one year.

i. In December, 2014, when he came to know that securities of the company got listed on BSE, he asked his M/s Dani Stock Brokers to dispose off certain shares to recover his dues but could not be sold as volume was quite thin. j. At last on 31st December, 2014, he was able to dispose off 3000 shares at Rs.321/- and shocked as got more return than expected. k. In July, 2015 as volume began to shrink along with the price of shares for no reason known to him. Thereafter, he could not dispose off any shares. l. Meanwhile, he came to know that BSE has held back settlement of pay-out for trades executed on 27th July, 2015 acting upon complaints received from some investors about illicit trades in the said Scrip. BSE also immediately suspended trading in the securities of the company by then. m. As he had recovered his dues and also earned handsome money, was least concerned with the developments. n. However, in June 2016, he received SEBI interim order restraining him along with others from dealing in securities market till further directions as a consequence of being a part of Dhyana preferential issue. o. He does not know any of the entities named in the order nor associated with any of them including Dhyana Finstock Ltd in any manner whatsoever. p. He still holds more than 2 lacs shares of the said Company in his demat account. q. Further, please note that the entire financial transaction as far as his shares are concerned was carried out by Mr Pritesh Shah described above and have no clue neither about how he managed the fund nor how he routed the fund.

At that time, he was only concerned with his money rather than anything else. r. His name nowhere appears in interim order as regards illicit funding of application and subscription money for the application for preferential issue. s. The entity requested to lift the ban for investing in securities market as it affects his credibility in the market. Kumar A (represented by Mr. Nithish Bangera, Practicing Company Secretary): a. He had acquired 50000 shares in the company by way of preferential allotment from his owned funds and sold 18500 shares in the month of June 2015 over 5 days at the rate of Rs. 355 before 27.07.2015. i.e. the day when the SMS scam took place. Also he is still holding shares of the company. It is evident from above that he cannot be blamed for price volume manipulation. b. His trades are genuine, independent and should be viewed individually. c. His investment in DFL is one of his trade decisions. He has invested in Dhyana Finstock Limited in the normal course from his owned funds. He has invested in the preferential allotment in DFL at the instance of Mr. Vishaal Tamker d. The interim order is vitiated by gross violation of principles of natural justice, equity and fair play as the same has been issued arbitrarily by SEBI without any evidence.

SEBI needs to provide justification and documentary evidence to him with regards to the said order. e. It is submitted that the power to issue directions under section 11(B) is a drastic power available with SEBI. The directions under this section had a great consequence on his reputation and livelihood. It is exceptional, extraordinary and discretionary power and SEBI has to justify the need for invocation of the said power clearly. f. The act of allotment and sale of investment was done lawfully and also has not misused the stock exchange system. All trades are genuine and lawful. As a result of this order, he is not able to do any business and live a normal life. This is a violation of Right to live and do business inherited to him by the Indian Constitution. g. He is not connected to any Dhyana group entity, Company, Directors, promoters, Dhyana Group, Exit Providers, Other Preferential Allottees, etc. has been set out, his name does not appear anywhere and connection with the said entities is not established. h. He has not played any role in the SMS scam and no allegation regarding the same has been established in the order against him. i. He submits that, SEBI feels that preferential allotment is genuine as SEBI has not debarred all preferential allottees.

10 preferential allottees who have not sold their holdings are not debarred. It means SEBI feels that acquisition/purchase of shares is genuine and selling of acquired shares is wrongful act. j. He has not acted in concert with any group entities to misuse the stock exchange system and transactions are genuine and were not done with an intention to inflate or cause fluctuation in the market price of the securities. k. He requested to set aside the directions against him under Section 11(4) and Section 11B of the SEBI Act, 1992 in the interest of justice and equity. Further, he also submits that he does not want such interim and generalised reliefs as provided by SEBI in other cases. M. Mathivanan (represented by Mr. Nithish Bangera, Practicing Company Secretary): a. He refutes all the allegations against him in the order. b. He has bought 150000 shares through preferential allotment and sold 66791 shares. Balance 83209 shares are still lying in his name. c. His investment in DFL is one of their trade decisions. He has invested in Dhyana Finstock Limited in the normal course from his owned funds.

He has invested in the preferential allotment in DFL at the instance of Mr. Vishaal Tamker. d. His investment in this company was long term in nature. Long term Capital gain is exempted from Income Tax.

e. The act of allotment and sale of investment was done lawfully and also has not misused the stock exchange system. All trades are genuine and lawful. As a result of this order, he is not able to do any business and live a normal life. This is a violation of Right to live and do business inherited to him by the Indian Constitution. f. He is being alleged for violation of SEBI (PFUTP), in spite of that none of his trades are alleged to be manipulative with meeting of mind with anyone. Long Term Capital Gain etc. is subject matter Income Tax Authorities. And till day he has not received any communication from Income tax Authorities. g. His investment was in compliance with the SEBI (ICDR) guidelines and Companies Act. His investment and disinvestment was genuine and legitimate. h. He has sold all his shares before the 27.07.2015. Hence, he cannot be blamed for any so called manipulation done on 27.07.2015. i. He submits that, SEBI feels that preferential allotment is genuine as SEBI has not debarred all preferential allottees. 10 preferential allottees who have not sold their holdings are not debarred.

It means SEBI feels that acquisition/purchase of shares is genuine and selling of acquired shares is wrongful act. j. He is not connected to any Dhyana group entity, Company, Directors, promoters, Dhyana Group, Exit Providers, Other Preferential Allottees, etc. has been set out, his name does not appear anywhere and connection with the said entities is not established. k. SEBI has wrongly considered his trades as a part of some scheme, potential case of money laundering and tax evasion. There is no evidence to prove that his trades are meant for money laundering. All his trades were in normal course of business. l. He requested to reverse the order restraining him from accessing securities market and buying, selling, or dealing in securities market directly or indirectly in any manner. Further, he also submits that he does not want such interim and generalised reliefs as provided by SEBI in other cases. Uttam Chunnilal Jain and Reenu Uttam Jain (represented by Mr. Nithish Bangera, Practicing Company Secretary): a. They have been debarred from accessing the securities market, due to which investments of about ₹.

91.13 Lac and ₹ 22 respectively is blocked. It is against the principle of natural justice, right to life and to do business. b. The act of allotment and sale of investment was done lawfully and also has not misused the stock exchange system. All trades are genuine and lawful. As a result of this order, they are not able to do any business and live a normal life. This is a violation of Right to live and do business inherited to them by the Indian Constitution.

c. The power to issue directions under section 11(4) and 11(B) is a drastic power having serious civil consequences and ramifications on the repute and livelihood of those against whom it is directed. Said power is not available for routine and retrospective application and cannot be used for penal action. It is exceptional, extraordinary and discretionary power and SEBI has to justify the need for invocation of the said power clearly. d. Total 50000 shares each were allotted to them in preferential allotment and they sold entire holding of 50000 shares before 27/07/2015. Their transactions were made out of their own funds. They have traded in a narrow price range from ₹. 317.50 to ₹. 345 and not played any role in the SMS scam. They cannot be blamed for price volume manipulation. e. Their investment in DFL is one of their trade decisions. They have invested in Dhyana Finstock Limited in the normal course from their owned funds. They have invested in the preferential allotment in DFL at the instance of Mr. Vishaal Tamker. f. They submit that, SEBI feels that preferential allotment is genuine as SEBI has not debarred all preferential allottees.

10 preferential allottees who have not sold their holdings are not debarred. It means SEBI feels that acquisition/purchase of shares is genuine and selling of acquired shares is wrongful act. g. They are not connected to any of the alleged group entities i.e. promoter group entities, company and its directors and no fund transfers with the alleged group entities. h. Not violated the provisions of Regulation 4(b), 4(c) and 4(d) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulation read with Regulation 13(2) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003. i. There is no lapse or wrongdoing on their part as alleged or otherwise. Their trades could not be said to have contributed to any false or misleading appearance of trading in the said scrips. Further, volume of trading was delivery based and hence genuine and not artificial as sought to be suggested. j. They requested to set aside the directions against him under Section 11(4) and Section 11B of the SEBI Act, 1992 in the interest of justice and equity. k. Their portfolio is worth ₹.

92 lac and ₹. 22 lacs respectively. Their holding is in 32 blue chip scrips and 22 blue chip scrips respectively. They are going through financial crunch and wants to urgently en cash his investments and also the rates of certain securities are high currently which can fetch him good amount and will resolve the issue of liquidity. l. Accordingly, they requested that interim order should be suspended till completion of investigation. Further, they should be permitted to sell his existing portfolio and proceeds of the same be credited to his bank account.

m. Further, they also submit that they do not want such interim and generalised reliefs as provided by SEBI in other cases. Raj Rattan (represented by Mr. Prakash Shah, Advocate): a. He is a pure investor and shareholder in DFL and had no role in internal affairs of the company. b. He submit that he invested in DFL at the instance of Mr. Ramesh Kumar Tiberewala, a stock broker, who regularly gives him financial advice with respect to investing his money. c. He had not traded in scrip of Dhyana on 27.07.2015. Merely because he was allotted preferential shares of company he cannot be blamed or alleged to have been involved in any fraudulent' activity by company or any of its allegedly connected entities. d. He had purchased 1,00,000 shares of Dhyana on 30.11.2013 with his legitimate income and except for being a bonafide shareholder he has no connection and relationship of whatsoever nature with the company, its promoters, directors, employee or any of its alleged connected entities. e. He had sold his shares on floor of market in bonafide manner and had no idea who bought the same. He has no connection of whatsoever nature with counterparties of his sale transactions, Dhyana Group or exit providers and other preferential allottees mentioned in Interim order.

He also does not have any connection with said Mr. Ravi Makwana, M/s Shubh Investment and any other telecom operators, telemarketers and aggregators i.e. DD-BSE Bull, VM-BSE Bull, DM-BSE Bull, AM-BSE Bull, VM-StAxis, BH-StAxis, BH-StAxis, MD-TRFID, VM-HBJCAP who had sent bulk SMS on and around 27.07.2015 to investors allegedly luring them to trade in scrip of Dhyana. f. BSE would have obtained requisite disclosures and carried out adequate due-diligence before granting permission of listing new securities of Dhyana. g. Except for price paid for application of preference share of Dhyana, he has no other financial relationship with Dhyana Company or any other entity named therein. h. The Interim order against him be vacated at the earliest. The order has been issued ex parte without any prior communication, notice, letter or any correspondence seeking his explanation or clarification on the subject matter. Thus, Order is in gross violation of the basic principles natural justice viz. 'audi alteram partem'. i. In this regard, he would like to draw attention to following judicial pronouncements: I. In the case of Painter v. Liverpool Oil Gas Light Co. It was held that "A party is not to suffer in person or in purse without an opportunity of being heard.

II. In State of AP vs. Nagam Chandrashekhara Lingam and Asst. Collector of Customs & Ors vs. Bibhuti Bhushan Bagh & Anr

'Hon'ble Supreme Court of India held that a right of hearing would become an empty formality without a notice and issuance of a notice can be treated as being a part of fair procedure as envisaged under the Article 14, 19 and 21 of Constitution of India. j. A unilateral open ended coercive action is taken against him whereby he has been debarred for an uncertain period. Further, without any specific direction contained therein, the depositories have immediately frozen his demat account even though SEBI itself has given him 21 days time to file his objections in the aforesaid matter. Such an open ended restraint order against him is in breach of fundamental right of carrying on business bestowed upon every citizen under Article 19 (g) of the 'Constitution of India'. k. As a consequence of Interim order his demat account has been frozen and SEBI has acted beyond its scope and purview and power assigned to it and transgressed the power delegated to it by Parliament of India. l. SEBI has attached his demat accounts without the approval of Judicial Magistrate as required under the provisions of section 11 (4) (e) of the SEBI Act which mandates such approval for all accounts including a bank accounts as well as demat accounts. m. He denies alleged violation of provisions of Section 12 A (a),(b) & (c) of SEBI Act, 1992 and Regulation 3 (a),(b),(c),(d) r/w Regulations 4(1), 4 (2) (a),(b),(e),(g) and (r) of SEBI (PFUTP) Regulations, 2003. n. He requested that until passing of Final Order by SEBI, SEBI ought to grant him certain interim reliefs so as to avoid erosion of value of securities, maintain some investment avenue in Capital Market and address need for meetings funds for business/other exigencies. In view of the same, he may be permitted:  To sell shares & securities held in his demat account and utilize sale proceeds.  To liquidate and redeem units of mutual funds and utilize the proceeds.  To buy, sell and deal in shares and securities, except in the shares of Dhyana.  To subscribe to units of mutual funds, including SIP, and redeem the units of mutual funds so subscribed.  To avail benefits of corporate actions like rights issue, bonus issue, stock split, dividend and so on. o. Further, he also requested that:

 The Interim order against him be vacated, directions qua him be revoked and he may be discharged at the earliest.  The investigation in the matter be concluded within a reasonable period of time of about 3-6 months and consequently final order be passed within 3 months thereof after providing him an opportunity of being heard.  Alternatively: (a) He may be provided with complete set of relevant documents referred to and relied upon by SEBI while passing the Interim order; (b) He may be granted Interim Relief(s), as prayed hereinabove, pending investigation and passing of Final Order by SEBI. Azim Farooq Hawa, Farooq Kasam Hawa, Zahir Farooq Hawa and Noorbanu Farooq Hawa (Mr. Azim Farooq Hawa appeared along with Mr. Joby Mathew, Advocate and Ms. Harshada Nagore, Advocate): a. The entities deny all the allegations and findings made against them in the said order. b. SEBI did not seek their explanations to the serious and unfounded allegations made against them and therefore, have failed to consider all relevant facts and records and on this ground alone, the said order and the directions therein ought to be withdrawn against them immediately. c. They are a family engaged in the business of trading and manufacturing engineering goods. d. In and around October 2013, Rashmee B. Shah who is a proprietor of Rashmee Associates (Chartered Accountants) and Rashmikant B. Acharya, proprietor of R. B. Acharya & co. (Tax Consultants), who was the Statutory Auditor/Tax Consultant to Fluidline Valves Co. Pvt. Ltd suggested that investments by the aforesaid members of our family, which were mostly in Mutual Funds were yielding inadequate returns and recommended that they make some investments in equity markets. They both suggested that they invest a relatively small amount (around Rs.20-25 Lakhs) in an. upcoming preferential issue by DFL. They also told them that the shares of the Company were listed on the Ahmedabad Stock Exchange and were expected to get listed on the BSE; thereafter, the shares were expected to fetch a good price. They valued the advice given by Rashmi Shah and Rashmikant Acharya; decided to spare Rs.20 Lakhs for investment in the preferential allotment and followed the procedure for making an application for the said preferential issue. They were allotted 50,000 shares each for a total amount of Rs.20 Lakhs.

e. They made application for preferential allotment of shares to DFL on the recommendation of Rashmi Shah and Rashmikant Acharya. Further, they do not have any connection with the Company or its promoters. f. They subscribed to the preferential issue of shares by the Company using funds that were accounted for in the income tax returns filed by them from time to time; the profit that they made from the sale of the shares allotted to them has also been duly accounted for and tax paid on the same as required under the existing tax laws. g. The shares allotted to them by the Company in the preferential allotment were under lock-in for a period of 1 year. By the time the lock in on the shares was released, they found that the price had increased substantially and therefore, as a commercially prudent measure, they sold most of the shares on the BSE during the period December 2014 and January 2015. h. However, instead of seeking any explanation from them, SEBI has passed drastic directions effectively prohibiting them from accessing or using any of their investments besides harming their reputation.

This is most unfair and arbitrary and on this ground also, they request that the directions against them in the said order may be withdrawn. i. They are neither privy to the complaints filed by various investors regarding the trades in the shares of DFL on the BSE on July 27, 2015 nor aware of the SMSs received by such complainants. j. They are not concerned with the pay-out relating to the trades on July 27, 2015 since they did not buy or sell the shares of the Company on that day. k. They submit that from the perspective of an investor, reasons for the increase in price may not be as important as the rise in price itself. Even assuming that the price rise was not justified by the fundamentals of the company or in the absence of any favorable news, they cannot be faulted for selling their shares to take advantage of the same. Moreover, it is erroneous to assume that they knew about the reasons for the abnormal rise in price merely because they sold the shares allotted to them when the price was rising. In fact, it would have been suspicious if they had not sold any shares under such favorable market conditions. l. Neither they trade in the shares of the Company on July 27, 2015 nor they neither received the SMSs nor sent out the same.

It is pertinent to note that they are not and they should not be held to be part of the said alleged "Dhyana Group".

m. Out of the 2,00,000 shares allotted to the four of them, they sold 1,79,000 shares; all except Mr. Zahir Farooq Hawa sold 50,000 share each. Mr. Zahir Farooq Hawa sold 29,000 shares, retaining 21,000 shares. n. The trading on the BSE is both automatic and anonymous and that therefore, the identity of the counterpart to their trades would not be known to even the stock broker. Therefore, the finding of SEBI that the Dhyana Group entities acted as buyers to their sales is erroneous. o. SEBI has not shown that the sell orders placed on their behalf by their broker-Pilot Capital Private limited matched with the buy orders of the Dhyana Group. In the absence of the same, the allegation that their trades were illegal or that the profit that they made from the sale of shares legally allotted to them was illegitimate, is erroneous and false. Furthermore, it is erroneous to hold that their profit was not legitimate merely because the fundamentals of the Company did not justify the prevailing price in the market when they sold the shares. p. They are not concerned with the members of the Dhyana Group or the inter se transfer for funds between them; however, they deny that any of the entities mentioned in paragraph 45 of the said order provided an exit to them as falsely alleged or otherwise. q. While denying that they misused the stock exchange system to generate fictitious LTCG, they submit that SEBI has not provided any particulars of the same.

No details of their purported unaccounted income or the manner and method of its conversion to accounted income through the subscription and subsequent sale of shares of the Company are set out. In the absence of such details, it is not established that the profit or LTCG made by them is fictitious or illegal. In fact, their profits are from trades done on the stock market and legitimate. r. They merely subscribed to the preferential allotment of shares of the Company and were in no way connected to the promoters or management. Therefore, they were not involved in the listing of the shares of the Company on the BSE and cannot comment on whether the listing price of Rs.251/- per share was justified or not. However, to the best of their understanding, the price of the share on listing is determined by a combination of factors including the demand and supply in the market. s. The increased price and volume are some of the important commercial considerations that encouraged them to sell the shares allotted to us by the Company. At that time, the cause of the price and volume increase was not known to them and in any case, the same would not have been a reason to refrain from sale of our shares. t. They are not concerned with the transfer of funds between entities connected to the Dhyana Group or between them and the said alleged "exit providers". u. They are not concerned with the SMSs which were circulated among investors since they did not receive or send the same and they were not aware of the same until they read the said order.

Moreover, they did not trade in the shares of the Company on July 27, 2015. v. They also submit that SEBI has erred in imposing restraints on them from accessing the securities market and from buying, selling or otherwise dealing in securities without seeking an explanation from them regarding their dealings in the shares of the Company and without completing their investigation. w. At the time of the preferential allotment, the scrip was not traded on the BSE and there was very little liquidity on the ASE; therefore, the finding that they could have bought in the secondary market and waited for a year before selling the shares to avail of the benefits of LTCG is erroneous and misplaced. x. In the light of the above, they deny that they acted fraudulently and/or that they violated the provisions of Regulations 3 and 4 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to the Securities Market) Regulations, 2003 and/or the provisions of Section 12A of the Securities and Exchange Board of India Act, 1992, as falsely alleged or otherwise. y. Substantial damage has been done to their reputations and financial condition, which cannot be reversed or compensated when SEBI finds that they were not part of the fraudulent scheme allegedly carried out by the Dhyana Group and others acting together with them. z. In the light of the above submissions, they request that they may be discharged from the present proceedings that the directions restraining them from accessing the securities market and buying, selling or otherwise dealing in securities, directly or indirectly, may be withdrawn qua them and an order may be passed accordingly.

7. I have considered the allegations levelled against the Noticees in the interim order, their replies/written submissions and other material on record. I note that in the instant case, the directions issued against the Noticees are interim in nature and have been issued on the basis of prima facie findings. SEBI had issued directions vide the interim order in the matter in order to protect the interests of investors in the securities market. Detailed investigation in the matter is still in progress. Thus, the issue for consideration at this stage is whether the interim directions, issued against the Noticees vide the interim order, need to be confirmed, vacated or modified in any manner, during pendency of investigation in the matter. It is noted that the Noticees have not disputed the facts relating to preferential allotments and the trading in the scrip, as alleged in the interim order. 8. Before dealing with replies/submissions of the Noticees on merit I deem it necessary to deal with preliminary and common contentions raised by some of the Noticees. The first such contention is that the interim order has been passed in complete disregard of the principles of natural justice in as much as no opportunity of hearing was provided to the Noticees In this regard, I note that the interim order has been passed on the basis of prima facie findings observed during the preliminary examination/inquiry undertaken by SEBI.

The facts, circumstances and the reasons necessitating issuance of directions by the interim order have been examined and dealt with in the said interim order. The interim order has also been issued in the nature of a show cause notice affording the Noticees a post decisional opportunity of hearing. I also note that the power of SEBI to pass interim orders flows from sections 11 and 11B of the SEBI Act which empower SEBI to pass appropriate directions in the interests of investors or securities market, pending investigation or inquiry or on completion of such investigation or inquiry. While passing such directions, it is not always necessary for SEBI to provide the entity with an opportunity of pre-decisional hearing. The law with regard to doing away with the requirement of pre-decisional hearing in certain situations is also well settled. The following findings of the Hon'ble Supreme Court of India in the matter of Liberty Oil Mills & Others Vs Union Of India & Other (1984) 3 SCC 465 are noteworthy:- "It may not even be necessary in some situations to issue such notices but it would be sufficient but obligatory to consider any representation that may be made by the aggrieved person and that would satisfy the requirements of procedural fairness and natural justice.

There can be no tape-measure of the extent of natural justice. It may and indeed it must vary from statute to statute, situation to situation and case to case. Again, it is necessary to say that pre-decisional natural justice is not usually contemplated when the decisions taken are of an interim nature pending investigation or enquiry. Ad-interim orders may always be made ex-parte and such orders may themselves provide for an opportunity to the aggrieved party to be heard at a later stage. Even if the interim orders do not make provision for such an opportunity, an aggrieved party have, nevertheless, always the right to make appropriate representation seeking a review of the order and asking the authority to rescind or modify the order. The principles of natural justice would be satisfied if the aggrieved party is given an opportunity at the request. "

9. Thus, considering the facts and circumstances of a particular case, an ad-interim ex-parte order may be passed by SEBI in the interests of investors or the securities market. It is pertinent to note that the interim order in the present case was passed under the provisions of sections 11(1), 11(4) and 11B of the SEBI Act. The second proviso to section 11(4) clearly provides that "Provided further that the Board shall, either before or after passing such orders, give an opportunity of hearing to such intermediaries or persons concerned". Further, various Courts, while considering the aforesaid sections of the SEBI Act have also held that principles of natural justice will not be violated if an interim order is passed and a post-decisional hearing is provided to the affected entity. In this regard, the Hon'ble Bombay High Court in the matter of Anand Rathi & Others Vs. SEBI (2002) 2 Bom CR 403, has held as under: "It is thus clearly seen that pre decisional natural justice is not always necessary when ad-interim orders are made pending investigation or enquiry, unless so provided by the statute and rules of natural justice would be satisfied if the affected party is given post decisional hearing.

It is not that natural justice is not attracted when the orders of suspension or like orders of interim nature are made. The distinction is that it is not always necessary to grant prior opportunity of hearing when ad-interim orders are made and principles of natural justice will be satisfied if post decisional hearing is given if demanded. Thus, it is a settled position that while ex parte interim orders may always be made without a pre decisional opportunity or without the order itself providing for a post decisional opportunity, the principles of natural justice which are never excluded will be satisfied if a post decisional opportunity is given, if demanded." 10. Further, the Hon'ble High Court of Judicature of Rajasthan at Jaipur in the matter of M/s. Avon Realcon Pvt. Ltd. & Ors Vs. Union of India & Ors (D.B. Civil WP No. 5135/2010 Raj HC) has held that: “…Perusal of the provisions of Sections 11(4) & 11(B) shows that the Board is given powers to take few measures either pending investigation or enquiry or on its completion. The Second Proviso to Section 11, however, makes it clear that either before or after passing of the orders, intermediaries or persons concerned would be given opportunity of hearing.

In the light of aforesaid, it cannot be said that there is absolute elimination of the principles of natural justice. Even if, the facts of this case are looked into, after passing the impugned order, petitioners were called upon to submit their objections within a period of 21 days. This is to provide opportunity of hearing to the petitioners before final decision is taken. Hence, in this case itself absolute elimination of principles of natural justice does not exist. The fact, however, remains as to whether post-decisional hearing can be a substitute for pre-decisional hearing. It is a settled law that unless a statutory provision either specifically or by necessary implication excludes the application of principles of natural justice, the requirement of giving reasonable opportunity exists before an order is made. The case herein is that by statutory provision, principles of natural justice are adhered to after orders are passed. This is to achieve the object of SEBI Act. Interim orders are passed by the Court, Tribunal and Quasi Judicial Authority in given facts and circumstances of the case showing urgency or emergent situation.

This cannot be said to be elimination of the principles of natural justice or if ex-parte orders are passed, then to say that objections thereupon would amount to post-decisional hearing. Second Proviso to Section 11 of the SEBI Act provides adequate safeguards for adhering to the principles of natural justice, which otherwise is a case herein also…" 11. I, therefore, note that interim order has not been passed in violation of principles of natural justice as has been contended by the Noticees. 12. The Noticees have raised another contention that the power to issue directions under section 11(4) and 11(B) is a drastic power having serious civil consequences and ramifications on the repute and livelihood of those against whom it is directed. Said power is not available for routine and retrospective application and cannot be used for penal action. In this regard, I note that in this case the purpose of the interim order is to achieve the objectives of investor protection and safeguarding the market integrity by enforcing the provisions of the SEBI Act. In my view, section 11(1) of the SEBI Act casts the duty on SEBI to protect the interests of the investors, promote development of and regulate the securities market, “by such measures as it thinks fit”.

Apart from this plenary power, section 11(2) of the SEBI Act enumerates illustrative list of measures that may be provided for by SEBI in order to achieve its objective. One of the measures enumerated in section 11(2)(e) is "prohibiting fraudulent and unfair trade practices relating to securities markets". The word 'measure' has not been defined or explained under the SEBI Act. It is well settled position that this word has to be understood in the sense in which it is generally understood in the context of the powers conferred upon the concerned authority. From the provisions of section 11, it is clear that the purpose of section 11(2)(e) of the SEBI Act is to prohibit all fraudulent and unfair trade practices relating to the securities market and the Board may take any 'measures' in order to achieve this purpose. 13. The 'measures' and the directions under sections 11 and 11B of the SEBI Act can be taken/issued for prohibiting the fraudulent and unfair trade practices relating to securities market and achieving the objective of investor protection, and promotion of and regulation of the securities market.

It is also pertinent to mention that the interim order has been passed in the course of preliminary inquiry and the investigation in the matter is ongoing. Based on the prima facie findings in the matter and in order to protect the interest of investors in the securities market, SEBI had issued directions vide the interim order.

14. Another contention of the Noticees is that the open restraint order is in breach of their fundamental right to carry on business under Article 19(1)(g) of the Constitution of India. In this regard, it is noted that Article 19 (1) (g) guarantees to all citizens the right to practice any profession or to carry on any occupation, trade or business. However, at the same time it is pertinent to mention that this freedom is not uncontrolled as clause (6) of Article 19 authorises legislation which imposes reasonable restrictions on this right in the interest of general public. It is a matter of common knowledge that Securities and Exchange Board of India, 1992 is a special Act enacted by the Parliament conferring on SEBI the duty to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, by such measures as it thinks fit. In the present case, the restraint order has been passed by SEBI in exercise of the powers conferred upon it by law and towards fulfilment of the duties cast under the SEBI Act. As noted in the interim order, the conduct of the Noticees has been found to be prima facie fraudulent and the Noticees have therefore been restrained from accessing the securities market and dealing in securities till further directions.

In view of the above, I find that the restraint order against the Noticee is not in violation of Article 19(1)(g) of the Constitution of India as contended by him. 15. In this case, as discussed hereinabove, the purpose of the interim order is to achieve the objectives of investor protection and safeguarding the market integrity by enforcing the provisions of the SEBI Act. I, therefore, do not agree with the contentions of these Noticees with regard to the scope of the interim order and the power of SEBI in the matter. 16. Certain Noticees have raised the contention that there was no urgency warranting such an ex parte ad-interim order and also that interim order has been passed after lapse of 10 to 11 months from July 27, 2015. I note that the time taken to arrive at such decision/action is dependent on the complexity of the matter, its scale and modus operandi involved and other attendant circumstances. Further, as brought out in interim order also, apart from report of BSE, SEBI carried out its examination by calling information such as Call Data Records (CDR) from telecom operators, bank statements of various entities and other information as required in the matter.

The power under section 11 and 11B of the SEBI Act can be invoked at any stage, i.e., either during pendency or on completion of enquiry/inquiry or investigation. The interim order clearly brings out the reasons and circumstances for issuance of ex-parte ad-interim directions. I, therefore, do not find any merit in the contentions of the Noticees. 17. The Noticees have also contended that the primary allegation in the ex-parte ad interim order against them is of conversion of unaccounted income into accounted income and subsequent tax evasion which falls outside the jurisdiction of SEBI and that assuming without accepting that SEBI does have jurisdiction to adjudicate upon the same, then also, no case has been made out to establish that their trades in the scrip was with a view to evade tax. In this regard, I note that the interim order has reasonably highlighted the modus operandi wherein the scheme, plan, device and artifice employed, apart from being a possible case of tax evasion which could be seen by the concerned law enforcement agencies separately, is prima facie also a fraud in the securities market in as much as it involves manipulative transactions in securities and misuse of the securities market.

Accordingly, I am of the view that SEBI has acted well within its jurisdiction, in the matter and reject the contentions of the Noticees in this regard. 18. The Noticees have also contended that after giving permission to make preferential allotment, granting listing and trading permission for the shares issued in preferential allotment, the issuance of the same cannot be questioned as nobody raised grievance about preferential allotments made by the company during the relevant period. The contention, in my view, has no merit as preferential allotment is like any other corporate action/instrument which is allowed as per the extant regulations for raising funds by corporate bodies for the purpose of business requirements. However, the same becomes questionable/doubtful when it is used as tool for implementation of any dubious plan or mala fide intention as done in the instant case in the manner described in the interim order. In view of the above, I reject the above contentions of the Noticees in this regard. 19. Another common contention of the Noticees is that they have traded on the anonymous screen based system of the stock exchanges and as such their trades cannot be regarded as having manipulative/fraudulent intent.

In this context, I note that in the screen based trading, the manipulative or fraudulent intent can be inferred from various factors such as conduct of the party, pattern of transactions, etc. In this context, vide its order dated July 14, 2006, in Ketan Parekh vs. SEBI (Appeal no. 2/2004), the Hon’ble SAT has observed that: "The nature of transactions executed, the frequency with which such transactions are undertaken, the value of the transactions, ........., the conditions then prevailing in the market are some of the factors which go to show the intention of the parties. This list of factors, in the very nature of things, cannot be exhaustive. Any one factor may or may not be decisive and it is from the cumulative effect of these that an inference will have to be drawn." 20. In the instant case, the manner in which the allotment was made to the Noticees and the circumstances in which they sold the shares is clearly indicative of the fact that the same was an integral part of the entire scheme that has been detailed in the interim order. In view of the above, I am unable to accept the submissions of the Noticees in this regard.

21. The Noticees have contended that they had invested in the scrip of Dhyana from their own funds as genuine investors considering the preferential allotment a good investment opportunity. They have also contended that they are not connected/ related to the company or its promoters or directors or with any entities mentioned in the interim order. Further, they are not connected/ related to the entities who are alleged to be indulged in the price manipulation or with the exit providers/Dhyana group. In view thereof, they have submitted that they cannot be said to be involved in any dubious plan as alleged in the interim order.

22. In this regard, I note that it is a settled law that the preferential allotment of shares is an issue of shares by an issuer to select person or group of persons on a private placement basis unlike a public issue where funds are raised by inviting subscriptions from public in general. It is also a matter of common knowledge that a preferential allotment is made to the persons/entities on a one-to-one basis who are acquainted/familiar with the company and/or its promoters/directors. A preferential allotment is always for the purposes of meeting fund requirements of the concerned company and involves a covert, manifested and planned actions by the concerned parties, i.e.,- (a) the company to identify select persons/group of persons who are known to it or its promoters/directors for investing in its share capital, (b) select persons/ group of persons (preferential allottees)exercise due diligence and then finance the fund requirements of the company and subscribe to its shares issued on preferential basis; (c) the company allots shares to the preferential allottees. 23. The Noticees, in this case, have failed to substantiate their claim that they only made investment in preferential allotment and were not known to the company or its promoters/directors and/or had no nexus, connection with them in the preferential allotment.

They have failed to give any plausible explanation as to how the company could make allotment to them if they were not known to it or its promoters/directors and if they had no nexus/connection with them. 24. It is a well-accepted position that a preferential allotment signifies that the allottees agree with the issuer on one-to-one basis to finance its fund requirements and is not open to general public as an investment opportunity. Such financing pre-supposes nexus and prior understanding amongst the issuer, its promoters/directors and the allottees. A stranger cannot make investment in a preferential allotment merely on the basis of an advice without having any connection direct or indirect, and prior understanding with the company. A preferential allotment is not an "open to all" type of investment opportunity as sought to be contended by the Noticees. A company will, in no case, make a preferential allotment to a stranger who just approaches it for allotment of its shares. I, therefore, am unable to accept such explanation. 25. Infusion of funds by way of preferential allotment by the preferential allottees (including the Noticees) in a company like Dhyana which hardly had any credential in the market at the time of allotment could only be possible if the preferential allottees had nexus and prior understanding with Dhyana, its promoter and directors, exit providers with regard to the dubious plan, device and artifice as prima facie found in the interim order.

As brought out in the interim order ultimate beneficiaries of the whole scheme in question are the preferential allottees (including the Noticees) as such they cannot pretend to be oblivious to the scheme/plan/device/artifice in question. It is beyond reason to hold that the company and other entities mentioned in the interim order, except the preferential allottees (including the Noticees), would devise the impugned plan/scheme for the benefit of the entities who are neither party to the plan/scheme nor have any complicity in the plan with Dhyana and other entities mentioned in the interim order as sought to be contended by the Noticees. The facts and circumstances of this case, in my view, prima facie indicate that the issue of these shares was under a prior arrangement between them for the ulterior motive and the end objective of the scheme that has been brought out explicitly in the interim order. 26. Further, as brought out in the interim order, the Noticees being preferential allottees have also sold on July 27, 2015, the day when the trades appeared to have been done by Dhyana group/exit providers.

Moreover, the trades on July 27, 2015 appeared to have been done by sending fake SMS inducing buyers to buy in the scrip. It is pertinent to mention that detailed investigation of the entire scheme employed in this case is necessary to find out the role of Dhyana Group/ any other entity therein; role and connection amongst / with the company of the entities, including Dhyana Group/ net sellers; role and connection of the entities involved in sending SMS and calling investors to lure them to purchase shares of Dhyana with the promoters or directors of the company/net sellers/ Dhyana Group and the ultimate owners of funds used for manipulating the price of the scrip. In view of the above, I do not find any merit in the contention of the Noticees in this regard. 27. Certain Noticees have submitted that they have no nexus with the exit providers/ Dhyana Group/ promoters and directors of Dhyana or the company itself as none of the shares sold by them were purchased by exit providers mentioned in the interim order. In this regard, I find it important to mention that the detailed investigation in the matter is in progress and appropriate action in accordance with the provisions of law will be initiated against every entity that has a role in the plan, scheme, design employed in this case.

In view of the above, I do not find any merit in the contention. 28. Some of the Noticees have contended that they have sold only a small percentage of their total shares allotted under preferential allotment and some others have contended that they have sold shares of Dhyana much before July 27, 2015 and are still holding majority of shares in Dayana. In this regard I would like to draw attention towards the complete modus operandi as brought out in the interim order, which started with preferential allotment in Dhyana in the year 2013 followed by listing at BSE on June 13, 2014 and subsequent alleged price manipulation by Dhyana Group and providing of exit to preferential allottees. It was only subsequently on July 27, 2015 that the exit providers to preferential allottees, after buying shares from preferential allottees during Patch II (prior to July 27, 2015) also dumped the shares to unsuspecting investors who were induced into buying the shares of Dhyana in the influence of SMS tips. It is also noted that the interim order has duly provided the reasons for directions issued against these Noticees.

39 preferential allottees out of the 49 sold their shares during the examination period post expiry of lock in. The total sale by preferential allottees was 31,67,410 shares out of which 12,82,485 shares were bought by the Dhyana Group. The role of Dhyana Group in inflating the price of Dhyana to enable exit for preferential allottees at a high price thereby generating fictitious LTCG of ₹. 107.43 crore has been elaborately discussed in the interim order. The investigation into the price and volume movement of Dhyana during the period, the role of Dhyana Group/ any other entity in the scheme including the ultimate owners of funds used for manipulating the price the entire scheme employed is still in process and therefore at this stage I find that the contentions of the Noticees in this regard are unfounded. 29. The Noticees have also submitted that they are not connected to the SMS providers and had no knowledge for the same. They are no way connected to SMS senders. As brought out in the interim order, the facts and circumstances indicate a scheme, device and artifice to dump shares on July 27, 2015 in a pre-planned manner i.e. by sending fraudulent SMS to investors.

Considering that detailed investigation of the entire scheme employed in this case to find out the role and connection of the entities involved in sending SMS and calling investors to lure them to purchase shares of Dhyana with the promoters or directors of the company/net sellers/ Dhyana Group is in process, at this stage, I am not inclined to accept the contentions of Noticees. 30. It is also submitted by the Noticees that SEBI did not check the authenticity of investors neither done any due diligence of complaints before withholding the payout by BSE notice and even before passing interim order on 1st June 2016. In this regard, I find it important to mention that the interim order clearly mentions that more than 100 investors have lodged complaints with the Exchange / SEBI, inter alia informing that they have entered into buy trades in the securities of the company based on messages appearing on website bsebull.in & spam messages on stockAxis.com websites. The interim order in paragraph 30 discusses the trading pattern of complainants. Further in paragraph 19 of the interim order an analysis of order log for July 27, 2015 has also been discussed.

The prima facie findings in respect of the trades on July 27, 2015 are hence, based on the analysis which is explained in the order and I therefore, do not find any merit in the contention of the Noticees. 31. The Noticees have also contended that SEBI does not have jurisdiction to investigate matters relating to fraudulent SMS. In this regard, I note that several investors lodged complaints with the BSE / SEBI informing, inter alia, that they have entered into buy trades in the securities of the company based on spam messages appearing on certain websites and stock tips received through SMS. The complainants requested to withhold/ cancel the pay out for trades done on July 27, 2015. Based on the analysis conducted by BSE for trades executed on July 27, 2015 as brought out in the interim order in paragraph 3, prima facie, the case appeared as that of misuse of stock exchange system to generate fictitious Long Term Capital Gains (LTCG) where buyers were also lured to buy in the scrip (through SMS) to give exit to few shareholders/ preferential allottees. Pursuant to taking pre-emptive measure of withholding the pay out of securities and funds for the trades executed on July 27, 2015 to ensure that funds were not disposed off by the alleged perpetrators of fraud/ manipulation, if any, SEBI conducted further examination in the scrip of Dhyana.

In terms of regulation 4(2)(r) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 dealing in securities shall be deemed to be fraudulent or an unfair trade practice if it involves fraud and includes planting false or misleading news which may induce sale or purchase of securities. In the said matter the interest of investors in securities market were jeopardized and the powers of SEBI in respect of protection of interest of investors and promotion of and regulation of the securities market have already been discussed in detail above. Hence, I reject the contention of the Noticees regarding the powers of SEBI in this regard. Also, SEBI made required reference to Cyber Crime Investigation Cell in respect of the fraudulent websites deployed in the scheme as detailed in the interim order. 32. Mr. Raj Rattan has raised a specific contention that SEBI has attached his demat accounts without the approval of Judicial Magistrate as required under the provisions of section 11 (4)(e) of the SEBI Act which mandates such approval for all accounts including a bank accounts as well as demat accounts.

In this regard, it is pertinent to mention that section 11(4)(e) of the SEBI Act mandates approval of the Judicial Magistrate of the first class for attachment of “bank account or accounts”. It is noted that this requirement is applicable for attachment of one or more bank accounts and does not apply with respect to suspension of demat accounts towards implementation of the interim directions of restraint/prohibition on buying, selling or dealing in securities as specifically provided in section 11(4)(b) and contemplated in plenary power under section 11B. Thus, neither any direction of attachment of the Noticees’ accounts has been issued vide the interim order nor have any of the accounts been attached pursuant to SEBI’s order. Therefore, the requirement of prior permission of Judicial Magistrate under section 11(4)(e) of the SEBI Act does not arise. In my view, such contention, if accepted, would defeat the provisions of section 11(4)(b) read with section 11B which are not subject to requirements of approval as sought to be contended by these Noticees and also the purpose thereof. I, therefore, do not agree with this contention.

33. In view of the foregoing, I find that the following 21 Noticees have, at this stage, failed to give any plausible reasoning/explanation for their acts and omissions as described in the interim order and have not been able to make out a prima facie case for revocation of the interim order. I, therefore, in this case, reject the prayers of such noticees for setting aside the interim order or for complete removal of restraint imposed by it. The list of these Noticees is as under:

S.No. Noticee PAN 1 Azim Farooq Hawa AAAPH2774G 2 Farooq Kasam Hawa AAAPH2775H 3 Zahir Farooq Hawa AAAPH2776E 4 Noorbanu Farooq Hawa AAAPH8271Q 5 Rupal M Shah AAEPR5198J 6 Manish B Shah AAIPM4715G 7 Bhavini S Shah AEVPB8830Q 8 Sanjay P Shah AMIPS4672G 9 Kumar A AAEPK1457D 10 M Mathivanan AAEPM4368F 11 Uttam Chunnilal Jain AAFPJ3365A 12 Reenu Jain AEYPJ8903R 13 Mohit Airen ABXPA1053F 14 Alok Gupta ACHPG2799K 15 Rajesh Pukhraj Raka (Huf) AAFHR7898G 16 Dilipkumar Manilal Chokshi AAKPC1264A 17 Raj Rattan ADXPR0831L 18 Ashwinkumar K. Patel AGAPP9577F 19 Gaurav Manoj Agrawal AQMPA9216A 20 Pradip Harkhchand Doshi AAHPD4722B 21 Chetna H Chandan AHGPC9842D 34. Having dealt with the contentions of the Noticees as aforesaid, I note that majority of them have raised concern over challenges in running their activities on account of ban and consequent freezing of their demat accounts. Many of these entities have pleaded for removal of the restraint imposed vide the interim order or at least allow them partial relief of permitting trading in securities other than those involved in this case. It is worth mentioning that the ongoing investigation in the matter may take time in completion.

I have been conscious that the restraint order should not cause disproportionate hardship or avoidable loss to the portfolio of the Noticees. Now at this stage, considering the facts and circumstances of this case and submissions/oral arguments made before me, I deem it appropriate to make relaxations so as to address the issues of the personal and business exigencies or other liquidity problems. 35. Considering the above, I, in exercise of the powers conferred upon me under section 19 of the SEBI Act, read with sections 11(1), 11(4) and 11B thereof, hereby confirm the directions issued vide the ad interim ex parte order dated June 01, 2016 as against the aforesaid 21 Noticees except that they can:- (a) enter into delivery based transactions in cash segment in the securities covered in NSE Nifty 500 Index scrips and/ or S&P BSE 500 scrips; (b) subscribe to units of the mutual funds including through SIP and redeem the units of the mutual funds so subscribed; (c) deal in Debt/Government Securities; (d) invest in ETF (e) avail the benefits of corporate actions like rights issue, bonus issue, stock split, dividend, etc.; (f) tender the shares lying in their demat account in any open offer/delisting offer under the relevant regulations of SEBI; 36. Further considering business and personal exigencies and liquidity problems submitted by the restrained entities I allow them further relaxations/reliefs as under:- (a) They are permitted to sell the securities lying in their demat accounts as on the date of the interim order, other than the shares of Dhyana, in orderly manner under the supervision of the stock exchanges so as not to disturb the market equilibrium and deposit the sale proceeds in an interest bearing escrow account with a scheduled commercial bank.

(b) They may deal with or utilize the sale proceeds lying in the aforesaid escrow account under the supervision of the concerned stock exchange as provided:- i. the sale proceeds may be utilized for investments permitted in para 35; ii. upto 25% of the value of the portfolio as on the date of the interim order or the amount* in excess of the profit made /loss incurred or value of shares purchased to give exit, whichever is higher, may be utilized for business purposes and/or for meeting any other exigencies or address liquidity problems etc. * The amount will include the value of portfolio in the demat account Explanation: For the purposes of determining the portfolio value of the entities, the value of portfolio of securities lying in the demat account/s (individual and joint both) on the date of the interim order after excluding the value of shares that have been suspended from trading as on the date of the communication shall be considered. (c) The aforesaid reliefs shall be subject to the supervision of exchanges and depositories. The stock exchanges may use the existing mechanism available for implementing the similar interim relief earlier granted to some of the entities in other similar matters, for example confirmatory order in the matter of First Financial Services Limited dated August 25, 2016. 37. This order is without prejudice to any enforcement action that SEBI may deem necessary against the aforesaid Noticees on completion of the investigation in the matter.

38. This order shall continue to be in force till further directions. A copy of this order shall be served on all recognized stock exchanges and depositories to ensure compliance with above directions.

Sd/- DATE: November 1st, 2016 RAJEEV KUMAR AGARWAL PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA