Daulat Laxmilal Chandraliya vs Sebi

Date of Decision:26.3.2021

Appeal No.286 of 2021

Daulat Laxmilal Chandraliya 42/A-103, Kranti CHS Ltd. S.G. Barve Marg, Near Abhyudaya Bank, Kurla (E), Mumbai - 400 024. ...Appellant

Versus

Securities and Exchange Board of India SEBI Bhavan, Plot No.C-4A, "G" Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400051. ...Respondent

Mr. Kamal Agarwal, Authorised Representative for the Appellant.

Mr. Suraj Chaudhary, Advocate with Mr. Nishit Dhruva, Mr. Chirag Bhavsar and Ms. Vidhi Shah, Advocates i/b MDP & Partners for the Respondent.

CORAM: Justice Tarun Agarwala, Presiding Officer Justice M.T. Joshi, Judicial Member

Per : Justice Tarun Agarwala, Presiding Officer (Oral) 2

1.

The present appeal has been filed against the order

dated 28th February, 2019 passed by the Adjudicating

Officer imposing a penalty of Rs.5 lakhs for violation

of Regulations 3 and 4 of the Securities and Exchange

Board of India (Prohibition of Fraudulent and Unfair

Trade Practices Relating to Securities Market)

Regulations, 2003. For the same alleged violation the

Whole Time Member by a separate order had debarred

the appellant from accessing the securities market for a

period of two years. That order was also challenged by

the appellant which was dismissed as withdrawn.

2. In the impugned order we find that numerous buy

orders were being placed by the appellant of 100 to

200 shares before the sell order and generally these

were the first trades of the day. The counter party used

to purchase miniscule shares and, thereafter, the

appellant used to withdraw the remaining trades which

he had placed. This pattern of trading continued for

days. The Adjudicating Officer has also found that the 3

counter party was one and the same person, namely,

Mr. Ghanshyam Kachhawa who was connected with

the Company and, therefore, a direct link has been

established between the appellant for manipulating the

price of the scrip for ulterior purposes.

3. In the light of the aforesaid facts which are not

disputed, we are of the opinion that the order of the

Adjudicating Officer does not suffer from any manifest

error of law. Trading pattern of the appellant clearly

indicates not only connivance with the counter party

but the trading pattern was totally manipulative which

increased the price of the scrip. Thus, the appeal fails

and is dismissed with no order as to costs.

4. The present matter was heard through video

conference due to Covid-19 pandemic. At this stage it

is not possible to sign a copy of this order nor a

certified copy of this order could be issued by the

registry. In these circumstances, this order will be

digitally signed by the Private Secretary on behalf of 4

the bench and all concerned parties are directed to act

on the digitally signed copy of this order. Parties will

act on production of a digitally signed copy sent by fax

and/or email.

Justice Tarun Agarwala Presiding Officer

Justice M.T. Joshi Judicial Member

RAJALA Digitally signed

26.3.2021 KSHMI by RAJALAKSHMI H NAIR

RHN H NAIR Date: 2021.03.30 14:23:06 +05'30'