Mr. Nimish Pankajkumar Shah vs Sebi

Order Reserved on: 25.07.2022

Date of Decision : 03.01.2023

Misc. Application No. 553 of 2022 And Appeal No. 212 of 2022

Mr. Nimish Pankajkumar Shah B 12/B, Panchratna Apartment, Bhuyangdev, Ahmedabad, Gujarat - 380 015. ..... 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

Ms. Shailja Patel, Advocate with Mr. Rohan Mahadik, Advocate i/b. The Juris Partners for the Appellant.

Mr. Suraj Chaudhary, Advocate with Mr. Nishit Dhruva, Ms. Shefali Shankar and Ms. Meghna Arvind, Advocates i/b. MDP & Partners for the Respondent.

CORAM : Justice M.T. Joshi, Judicial Member Ms. Meera Swarup, Technical Member

Per : Justice M.T. Joshi, Judicial Member 2

1.

There is a delay in the filing of the appeal. For the

reasons stated in the application, the delay is condoned. The

application is allowed.

2. Aggrieved by the order dated July 6, 2021 passed by the

Adjudicating Officer ('AO' for short) of the Securities and

Exchange Board of India ('SEBI' for short) directing the

appellant to pay a penalty of Rs. 1,80,000/- for violation of

Section 2(i) of Securities Contracts (Regulation) Act, 1956

('SCRA' for short) read with Section 16, Section 13, Section

18 of SCRA read with SEBI Notification No. LAD-

NRO/GN/2013-14/26/6667 dated October 03, 2013 the

present appeal is filed.

3. The respondent SEBI conducted an investigation for a

period between April 01, 2014 to may 30, 2015 for the trading

in the scrip of Timbor Home Ltd. (hereinafter referred to as

the 'Company') and found that the transfer of shares made off

market violated the above provisions. It was further alleged

that these off market transactions between the connected

entities as detailed by pictorial representation in paragraph 2

of the impugned order ultimately led to providing false

information regarding the Company and off loading those 3

shares for a higher price through the Stock Exchange platform

defrauding the gullible investors.

4. We have heard Ms. Shailja Patel, the learned counsel for

the appellant and Shri Suraj Chaudhary, the learned counsel

for the respondent.

5. Insofar as the issue of defrauding the investors is

concerned this Tribunal had occasion to deal with the case of

the present appellant in Appeal no. 261 of 2022 and Appeal

no. 262 of 2022 decided on June 3, 2022. In those appeals this

Tribunal has confirmed the finding of the Learned Whole

Time Member as well as the AO of the respondent SEBI that

the present appellant in concert with other entities had

indulged into violation of the provisions of SEBI (Prohibition

of Fraudulent and Unfair Trade Practices relating to Securities

Market) Regulations, 2003 (hereinafter referred to as 'PFUTP

Regulations') and the appeals had been dismissed.

6. In the present case, the allegation regarding off market

transfers in violation of the provisions as detailed above, the

appellant admitted before the SEBI that he had done all these

transactions on behalf of Mr. Anant Maloo the promoter of

the Company and the appellant is also the director of the 4

same. The transactions were done to secure a loan for the

Company after receipt of those shares without any

consideration. The appellant transferred those shares to other

entities as detailed in the impugned order without any

consideration. The violation of the regulations is therefore an

admitted fact. The learned counsel submitted that the penalty

is already paid, however, since appellant was deceived by

Mr. Anant Maloo against whom he had filed FIR, the

quantum of penalty is excessive.

7. Upon hearing both the sides, in our view, the appellant

was the responsible director of the Company. The alleged

loan agreement was never produced on record to show as a

part of that agreement the shares were transferred. On the

other hand, the decision of this Tribunal in the appeals as

stated hereinabove would show that the intention was to

defraud the gullible investors. In that view of the matter no

case is made out for interference in the impugned order.

8. The appeal is, therefore, dismissed with no order as to

costs.

9. This order will be digitally signed by the Private

Secretary on behalf of the bench and all concerned parties are 5

directed to act on the digitally signed copy of this order.

Certified copy of this order is also available from the Registry

on payment of usual charges.

Justice M.T. Joshi Judicial Member

Ms. Meera Swarup Technical Member Digitally signed MADHUKA by MADHUKAR 03.01.2023 R SHAMRAO BHALBAR SHAMRAO Date:

msb BHALBAR 2023.01.06 17:08:37 +05'30'