Ms. Pooja Mahna vs Sebi

Date of Decision: 28.06.2019

Appeal No. 480 of 2018

Ms. Pooja Mahna Flat No. 3, Plot No. 42, Vandana Apartments, I.P. Extension, Patparganj, Delhi- 110 092 ...Appellant

Versus

1.

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

2. BGIL Films & Technologies Limited ('BFTL') B-66, Sector-60, Noida- 201 301, (U.P.) ...Respondents

Ms. Pooja Mahna, Appellant in Person.

Mr. Karan Bhosale, Advocate with Mr. Shriniket Deshpande, Advocate i/b Desai & Diwanji for Respondent No. 1

None for Respondent No. 2

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

Per: Justice Tarun Agarwala (Oral)

1. We have heard the appellant in person and Shri Karan

Bhosale the learned counsel for the respondent. The appellant 2

was a Compliance Officer in BGIL Films & Technologies Ltd.

("the company" for convenience). The Adjudicating Officer

("AO" for convenience) of Securities and Exchange Board of

India ("SEBI" for convenience) by the impugned order dated

October 26, 2018 has imposed a penalty of ` 50,000/- (Rupees

Fifty Thousand Only) for non-compliance of Regulation 12(2)

of the SEBI (Prohibition of Insider Trading) Regulations, 1992

("PIT Regulations, 1992" for convenience) read with clause 2.1,

clause 3.2 and clause 7(ii) of Schedule II of the Code of

Corporate Disclosure Practices for PIT Regulations, 1992.

2. It has come on record that the appellant had tendered the

resignation from the company on February 19, 2010 which was

duly accepted and that she was serving the notice period and

eventually ceased to be in service w.e.f. March 02, 2010. It has

also come on record that the appellant was not involved in the

Board Meeting held on February 23, 2010. Inspite of this

admitted position and inspite the AO observing that a benefit of

doubt should be given to the appellant, still imposed a penalty

of ` 50,000/- (Rupees Fifty Thousand Only).

3. Having heard the appellant in person and the learned

counsel for the opposite party, we are of the opinion that when 3

there was ample evidence on record to show that the appellant

was not involved as a Compliance Officer in the Board Meeting

which was held on February 23, 2010 and was only serving the

notice period pursuant to her resignation, the question of

imposition of penalty for non-compliance of the Regulation

does not arise. The imposition is wholly unjustified and cannot

be sustained especially when it has also come on record that the

Chairman of the company had confirmed that the appellant was

not involved in the Board Meeting which was held on February

23, 2010. In the light of the aforesaid, the impugned order

cannot be sustained and is quashed.

4. A prayer was made by the appellant that she had to incur

heavy expenses in pursuing this appeal and therefore she is

entitled for payment of cost. In this regard, the appellant has

placed a statement of expenditure which is enclosed in Misc.

Application No. 311 of 2019 indicating that she has spent a sum

of ` 96,710 (Rupees Ninety Six Thousand Seven Hundreds Ten

Only) towards fee and expenses. The prayer for costs has been

opposed by the learned counsel for the respondent contending

that the AO in all fairness has imposed a small sum of penalty

and, therefore, no cost should be given to the appellant. 4

5. Considering the fact that the appellant had to undergo this

litigation and face harassment for almost 1 and a ½ years,

coupled with the fact that a substantial portion was spent

towards fee paid to an advocate for drafting the appeal, we think

it appropriate that the appellant is entitled to costs which we

compute at ` 50,000/- (Rupees Fifty Thousand Only). The said

cost of ` 50,000/- (Rupees Fifty Thousand Only) shall be paid

by the respondent by a Demand Draft to the appellant at her

address within four weeks from today.

6. The appeal is accordingly allowed.

Sd/-

Justice Tarun Agarwala Presiding Officer

Sd/-

Dr. C.K.G. Nair Member

Sd/-

Justice M. T. Joshi Judicial Member 28.06.2019 Prepared & Compared By: PK