M/S. Golden Proteins Ltd. vs Sebi

M/s. Golden Proteins Ltd. C-2, Main Market, Vasant Vihar, New Delhi - 110 057. ...... Appellant

Versus

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

Mr. Mukul Lather, Advocate i/b S. K. Srivastav & Co. for the Appellant. Mr. Kumar Desai, Advocate with Mr. Tomu Francis, Advocate for the Respondent.

CORAM : Justice J. P. Devadhar, Presiding Officer Jog Singh, Member

Per : Jog Singh (Oral)

1.

The appellant has challenged the impugned order dated January 15,

2015 passed by the learned adjudicating officer under Section 15C of the

Securities and Exchange Board of India Act, 1992 (for short 'SEBI Act, 1992')

read with Rule 5(c) of the Securities and Exchange Board of India (Procedure

for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules,

1995 (for short Adjudication Rules) imposing a monetary penalty of ` 1 lac for

not resolving investors' grievances on time.

2. After the introduction of online electronic system for investors'

grievances, namely, SCROES, SEBI particularly vide letters dated December

7, 201 1 and January 18, 2012 advised the appellant to obtain SCORES 2

authentication and resolve grievance of one investor pending as on August 27,

2012.

3. Despite repeated opportunities, the appellant failed to resolve the same

and hence a show cause notice dated August 30, 2013 was issued to the

appellant company under the provisions of the SEBI Act, 1992 read with Rule

4 of the Adjudication Rules to show as to why an appropriate penalty should

not be imposed on him for the alleged violations in question.

4. After conducting an inquiry as per the rules and after affording an

opportunity of personal hearing to the appellant, the learned adjudicating

officer came to the conclusion that the appellant as a listed company was

expected to comply with the extant regulatory and statutory requirements. As

already observed, the noticee failed in resolving the investor's grievance

pending against it despite being called upon to do so by SEBI.

5. After hearing both the learned counsel for the parities, we find no merit

in the appeal and the same is liable to be dismissed. We have noted from the

pleadings that the appellant sought registration under SCORES only on

January 14, 2015 i.e. almost after one and half years of issuance of show cause

notice in this regard. It is also not clear from the pleadings whether action

taken report (ATR) has been filed as per the requirement of SCORES by the

appellant. Therefore, the noticee is liable to pay monetary penalty under

Section 15C of the SEBI Act, 1992.

6. In the circumstances, penalty of ` 1 lac imposed on the appellant is not

justified. The appellant company is a sick company within the meaning of The

Sick Industrial Companies Act, 1985 is not ground for the appellant to evade

SEBI norms particularly regarding redressal of investor's grievance on time. 3

7. This Tribunal has consistently held that timely redressal of the

investors' grievances by the companies is of utmost importance. Keeping this

importance in mind, SEBI by circular dated August 2, 2011, SEBI introduced a

system of processing investors' complaints in a centralized web based

complaints redress system, which is commonly known as 'SCORES'. Under

this system, a centralized database of all the complaints and their online

movement to the concerned intermediaries is monitored. Similarly, online

upload of action taken reports (ATR) by the concerned entities and its viewing

by investors of the action on the complaints and their current status etc. all are

displayed. Violation of such an important regulatory measure cannot be taken

lightly in the facts and circumstances of the present case.

8. The appeal, accordingly, stands dismissed with no order as to costs.

Sd/-

Justice J. P. Devadhar Presiding Officer

Sd/-

Jog Singh Member 11.09.2015 Prepared & Compared by PTM