Man Finance Pvt. Ltd. vs Sebi

Date of Decision : 18.06.2019

Appeal No. 339 of 2018

Man Finance Pvt. Ltd. MAN HOUSE, 101, Opp. Pawan Hans Airport, S. V. Road, Vile Parle (W), Mumbai - 400 056. ......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. Nilesh Kabani, Advocate for the Appellant. Mr. Sumit Rai, Advocate with Mr. Kunal Shah, Mr. Chirag Bhavsar, Advocates i/b MDP & Partners for the Respondent.

CORAM : Justice Tarun Agarwala, Presiding Officer Dr. C. K. G. Nair, Member Justice M. T. Joshi, Judicial Member

Per : Justice Tarun Agarwala, Presiding Officer (Oral)

1.

We have heard the learned counsel for the parties. The

Adjudicating Officer (hereinafter referred to as, 'AO') found that the

appellant had purchased 2,57,755 shares of Man Industries (India) 2

Ltd. on September 12, 2012 and was required to make the disclosure

of the increase in his shareholding in Man Industries (India) Ltd.

consequent to the said purchase which he failed to do so within the

stipulated period and therefore violated Regulation 13(4A) read with

Regulation 13(5) of the Securities and Exchange Board of India

(Prohibition of Insider Trading) Regulations, 1992 (hereinafter

referred to as, "PIT Regulations). The AO accordingly, imposed a

penalty of Rs. 1 lac.

2. The appellant being aggrieved by the said order has filed the

present appeal.

3. It was contended that even though the appellant did not disclose

the acquisition of the shares to the stock exchange, nonetheless, the

said information was sent by the company to the stock exchange and,

thus, there was a substantial compliance and, therefore, the appellant

should not be penalized for his lapse. It was urged that the appellant

had also purchased the shares of the same company on September 13,

2012 and necessary disclosure was made to the stock exchange vide

letter dated September 14, 2012 which disclosure also included the

purchase of the shares made on September 12, 2012 and, thus,

contended that substantial compliance was made. 3

4. The submission of the learned counsel for the appellant is

bereft of merit. The provision of Regulation 13(4A) of the PIT

Regulations is mandatory and requires a person to disclose the

acquisition of the shares not only to the company but also to the

stock exchange. Under Regulation 13(5) of the PIT Regulations the

said disclosure under Regulation 13(4A) of the PIT Regulations is

required to be made within two days of the acquisition of the shares.

When the law requires a particular act to be done in a particular

manner, no leeway can be given to a person to deviate from the said

procedure. Thus, even though the company may have sent the

information to the stock exchange, nonetheless, it was the duty of the

appellant to disclose the acquisition of the shares to the stock

exchange in the requisite 'Form D' within two days from the

acquisition of the shares which apparently had not been done and,

thus, the appellant had violated the provisions of Regulation 13(4A)

read with Regulation 13(5) of the PIT Regulations.

5. The contention that in any case, the acquisition of the shares

made by the appellant on September 12, 2012 was intimated to the

stock exchange vide letter dated September 14, 2012 is of no avail in

as much as the said letter was received by the stock exchange on

September 17, 2012 much after the stipulated period of two days. 4

6. Thus, the order of the AO does not suffer from any error of law.

The appeal is dismissed with no order on costs.

Sd/-

Justice Tarun Agarwala Presiding Officer

Sd/-

Dr. C. K. G. Nair Member

Sd/-

Justice M. T. Joshi Judicial Member 18.06.2019 Prepared & Compared by PTM