Deeepak Pandurang Vikhape vs Sebi

Period Dates Opening Closing Low price High price Avg.

Price Price (volume) (volume) no. of (volume) (volume) during the during the (shares) on first on first period (Rs.) period traded day of the day of (Rs.) daily period the during (Rs.) period the (Rs.) period Before (01/03/2012 Price 33.00 34.50 28.00 45.30 Investigation 31/05/2012) (15-05-12) (14-03-12) Vol. 3,802 381 0 13,849 (25-04-12) (14-03-12) 1,914 Pre-split Price 34.85 227.50 34.25 232.00 (01/06/2012) (05-06-12) (29-01-13) -- Vol. 206 201,110 206 423,617 During 30/01/2013) (01-06-12) (03-01-13) 126,244 Investigation Post-split Price 118.00 19.45 19.45 124.50 (31/01/2013) (30-04-13) (26-02-13) Period -- Vol. 407,801 5 1 618,941 30/04/2013) (28-03-13) (15-02-13) 139,082 After (01/05/2013) Price 19.10 6.32 6.08 19.10 Investigation -- (31-07-13) (02-05-13) 31/07/2013) Vol. 70 4,37,033 0 437,033 (13-06-13) (31-07-13) 34,662

6. The trading of the present appellants and three

others during the investigation period is as under:-

Pre-Split period

Buy Client Volume % Mkt. Sell Client Volume % Mkt.

Name Volume Name Volume Pooja 27,60,211 13.09% Pooja 25,04,380 11.88% Jinesh 22,67,031 10.75% Jinesh 19,95,869 9.47% Nagmeshwar 15,15,535 7.19% Deepak 13,44,063 6.38% Deepak 14,90,422 7.07% Nag 12,53,587 5.95% Kaushik 7,13,902 3.39% Kaushik 6,04,620 2.87% Shriti 5,94,648 2.82% Shriti 5,72,871 2.72% Gunjan 3,78,030 1.79% Gunjan 3,36,801 1.60% Mehul 2,77,293 1.30% Mehul 2,52,187 1.20% Total 99,97,072 47.41% 88,64,378 42.04% Total Market 2,10,82,741 100.00% Total 2,10,82,741 100.00% Volume Market Volume 6

Post-Split period

Buy Client Volume % Mkt. Sell Client Volume % Mkt. Name Volume Name Volume Nag 11,37,427 14.35% Nag 11,11,348 11.88% Pooja 10,51,372 13.28% Pooja 10,17,268 9.47% Jinesh 8,80,939 11.11% Jinesh 8,70,097 6.38% Kaushik 5,17,521 6.53% Deepak 4,77,532 5.95% Deepak 5,00,399 6.31% Kaushik 4,14,909 2.87% Gunjan 1,22,000 1.54% Gunjan 1,72,151 2.72% Mehul 1,31,968 1.66% Mehul 54,067 1.60% Shriti 16,489 0.20% Shriti 15,380 1.20% Total 43,58,115 55% Total 40,78,685 42.04% Total 79,27,664 100.00% Total 79,27,664 100.00% Market Market Volume Volume

7. From the above tables it could be seen that before

split of the stock i.e. before investigation period the

price of the shares was only between Rs.33 to Rs.

34.50 and the average volume of the shares traded was

only 1914 per day. During investigation period, i.e.

pre-split and post-split period however the price has

jumped to RS.227.50 which during post spilt period

had gone down to Rs.5. There was a sudden spurt in

the volume in this period. During this per day average

trading was more than 1,25,000 per day. After this

period however the average volume has come down to

around 35,000 per day. The trading of the appellant 7

and three others during pre-split period was on buy

side 47.41 percent and sell side 42.40 percent of the

total market trading. During post-split period it was

sale side 55 percent and buy side 42.4 percent of the

total market volume.

8. As noted above, while the relationship between the

appellants is almost admitted fact as appellant Jinesh

who contested the proceedings before the AO

submitted that two others are his family members and

the rest are his friends. Others did not deny the

connection as no reply was filed by them. Besides this

the investigation found that all of them were using only

two email ids alternatively as detailed in the order.

9. So far as synchronised trades are concerned, all the

eight noticees allegedly indulged into synchronised

trades for around 14 lakhs shares which was 6.61

percent of the market rate. The details of the each

transaction are given in a tabular form by the learned

AO.

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10. So far as self trades are concerned during pre-split

period four of the present appellants, namely, Pooja,

Jinesh, Deepak and Nagmeshwar had entered into self

trades. Puja had 164, Jinesh had 124, Dipak had 77

while Nagmeshwar had 18 self trades though his

volume was also significant that is around 38 percent.

Others was 80,000 and odd and 86,000 and odd during

the pre-split period.

During post-split period similar self trades were seen

of these appellants. These trades were between 13 to

67 trades by the appellants.

11. The analysis of the trades shows that the present

appellant alongwith three other noticees's contribution

to the Last Traded Price ('LTP' for short) was

Rs.242.55 and Rs.164.55. The details of the maximum

positive LTP contribution are given in a table in para

no.18 of the impugned order.

12. Appellant in appeal no.310 of 2018 Jinesh Bhatt

had contended before the AO that on the

recommendation of certain well wishers appellant 9

Jinesh Bhatt for himself and on behalf of his family

members had traded in the scrip of the Company.

According to him, self trades and synchronised trades

might have occurred accidentally and, therefore, he

wanted that the proceedings be dropped. The learned

AO, however, took into consideration the fundamentals

of the Company being very weak and in the light of the

above facts did not agree with the above submissions

and passed the impugned order. Hence the present

appeal.

13. Heard Mr. J. J. Bhatt, Advocate assisted by Ms.

Hetal Joshi, Advocate for the Appellant and Mr. Vishal

Kanade, Advocate assisted by Mr. Chirag Bhavsar, and

Ms. Vidhi Shah, Advocates for the Respondent in

appeal nos.298 and 340 of 2018 and Mr. J. J. Bhatt,

Advocate assisted by Ms. Rinku Valanju, Mr. Pratham

Masurekar, Ms. Hetal Joshi and Mr. Aditya Shah,

Advocates for Appellants and Mr. Vishal Kanade,

Advocate with Mr. Chirag Bhavsar, and Ms. Vidhi 10

Shah, Advocates for the Respondent in appeal no.310

of 2018.

14. Learned counsel for the appellant Mr. J.J. Bhatt

submitted that some the tables given in the impugned

order are not there in the show cause notice. The

contribution of the appellant as synchronised as well

as the self trades were also very negligible. No

connection with the promoter or the Company is

established. He further submitted that at some places

the AO had remarked that the trades were suspicious

but did not give clear findings. Even connection table

found in the impugned order is not in the show cause

notice. He further submitted that the submissions

made in para no.6.8 of the appeal memo are not

rebutted in affidavit in reply and hence he submitted

that the order is based merely on conjectures and the

same be set aside. He relied on the ratio of this

Tribunal's order in the of HB Stockholdings Limited

vs. SEBI, appeal no.114 of 2012 decided on 27th

August, 2013 and Ashlesh Shah vs. SEBI, appeal 11

no.265 of 2017 decided on 18th April, 2018. He

additionally submitted that the appellant infact suffered

loss and, therefore, no penalty was warranted.

15. On the other hand, the learned counsel for the

respondent Mr. Vishal Kanade submitted that while in

the show cause the description and figures are given,

in the impugned order the same information is given in

the tabular form for the purpose of clarity. For

example while in show cause notice the details of the

connections are given, merely in the impugned order

the said information is given in tabular form. He

points that infact the connection between the appellant

and other noticees is admitted by appellant Jinesh

Bhatt before Adjudicating Officer. He further pointed

towards the facts and figures of the trades of the

appellants which according to him was substantive in

nature. Mr. Kanade futher submitted that each case has

to be decided on it's own facts. He therefore, submitted

that no interference in the impugned order is

warranted.

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16. Upon hearing both the sides, in our view, the

appeals are liable to be dismissed. The connection

between the appellant and three other noticees is

established as they had used only two emails

alternatively between them. Besides while appellant

Jinesh had admitted his connection with other noticees,

the other appellants and 3 others did not deny the fact

by filing any reply to the show cause notice or by

appearing before the AO. Two common emails were

used by them. The nature of transactions of the

appellants and three notices, their synchronized trades,

self trades and contribution to the LTP as detailed

supra would clearly show that the shares of the

Company were traded by the appellants and the other

noticees in the manner as detailed above. The numbers

of synchornised and self trade would clearly show that

those could not be accidental or coincidental. The

roller coaster of volume and price of the Company

during pre-investigation period, investigation period

and post investigation period coupled with the contribution of the present appellant in the same as

detailed supra would show that on preponderance of

probability the charge against the appellant is clearly

proved.

17. In the result, the following order.

The appeals are hereby dismissed with no order as to

costs.

18. 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

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 29.4.2021 by

KSHMI NAIR RAJALAKSHMI H

RHN Date: 2021.05.03 H NAIR 08:45:57 +05'30'