M/S. Ideal Hotels & Industries Ltd. vs Sebi

Date : 04.08.2015

Misc. Application No. 132 of 2015 And Appeal No. 164 of 2015

M/s. Ideal Hotels & Industries Ltd. Hotel Ideal Tops, Cantt, Varanasi, Uttar Pradesh. ...... 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. Vikas Mishra, Advocate for the Appellant. Mr. Kumar Desai, Advocate with Mr. Manish Chhangani, Advocate i/b The Law Point for the Respondent.

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

Per : Jog Singh (Oral)

1.

With the consent of the parties the appeal and the Miscellaneous

Application have been heard and are being disposed of by this order.

Misc. Application No. 132 of 2015

2. There is a delay of about 43 days in filing the appeal. Miscellaneous

Application No. 132 of 2015 has been moved by the learned counsel for the

appellant. After hearing both the counsel and for the reasons stated in the

Miscellaneous Application, the same is allowed. 2 Appeal No. 164 of 2015

3. The appellant has preferred the present appeal against the impugned

order dated October 29, 2014 passed by the learned Adjudicating Officer under

Section 15C of the Securities and Exchange Board of India Act, 1992 (For

short SEBI Act, 1992) seeking to impose a monetary penalty of ` 1,20,000/-

for violating SEBI's circular dated June 3, 2011 read with Circular dated

August 13, 2012 for not redressing the investors' complaints as prescribed by

SEBI through various circulars issued from time to time.

4. By the said circulars, SEBI directed certain companies, including the

appellant, to obtain SCORES authentication and also redress the pending

investors' complaints within the stipulated time prescribed by the circulars.

Nothing seems to have been done by the company and as such SEBI appointed

an Adjudicating Officer by order dated October 4, 2013 for holding inquiry

and imposing penalty against the appellant as per procedure established by

SEBI (Procedure for Holding Inquiry and imposing Penalties by the

Adjudicating Officer) Rules, 1995 read with Section 15-I of the SEBI Act,

1992 for violation of the said circulars. A detailed inquiry was conducted as

per due procedure of law and after affording an opportunity of personal

hearing and following principles of natural justice, the learned adjudicating

officer has held that the appellant has violated the said circulars in as much as

it failed to obtain SCORES authentication and also did not resolve the pending

investors' grievances as per the mandate of law. This allegation and

consequent finding of the learned Adjudicating Officer has not been refuted by

the appellant. Therefore, the appellant cannot challenge the imposition of

penalty of ` 1,20,000/- as against the maximum penalty of ` 1 crore prescribed 3

by Section 15C of the SEBI Act, 1992 only on the ground of proportionality.

In the facts and circumstances of the present case, the appeal is, therefore,

liable to be dismissed. In fact, it is one of the important duties cast upon the

SEBI to see that there is speedy redressal of grievances of investors and the

appellant has admittedly failed to upload and do the needful as regards the

redressal of complaints of various investors in time.

5. We have repeatedly 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 has

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.

6. In view of the facts and circumstances of the case, the appeal is hereby

dismissed with no order as to costs.

Sd/-

Justice J. P. Devadhar Presiding Officer

Sd/-

Jog Singh Member

04.08.2015 Prepared & Compared by PTM