Naina Semiconductor Limited vs Sebi

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date of Decision: 09.06.2015

Appeal No. 221 of 2015

Naina Semiconductor Limited D-95 Sector 63, Noida, U.P. ...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. Anil Khanna, Managing Director, for the Appellant.

Mr. Kumar Desai, Advocate with Mr. Pulkit Sukhramani, Advocate i/b The Law Point, for the Respondent.

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

Per: Justice J.P. Devadhar (Oral)

1.

Appellant is aggrieved by the adjudication order passed by

Securities and Exchange Board of India ('SEBI' for short) on January

07, 2014 whereby penalty of ` 1 lac is imposed on the appellant under

Section 15A(a) and Section 15C of the Securities and Exchange Board

of India Act, 1992('SEBI Act' for short).

2. Reason for imposing the said penalty set out in the impugned

order is that inspite of directions given by SEBI from time to time the

appellant has failed to follow up or reset SEBI Complaints Redress 2

System ('SCORES' for short) Login ID and Password and also failed to

update the status of complaints in SCORES database within the

stipulated time.

3. In the present case, since the appellant has failed to take steps for

redressing the investor grievances a show cause notice was issued to the

appellant on January 21, 2013 to show cause as to why penal action

should not be taken against the appellant. Thereafter, by letters dated

May 30, 2013 and June 25, 2013 appellant was once again called upon

to redress the investor grievances. As no action was taken, by the

impugned order, penalty of ` 1 lac is imposed on the appellant.

4. Representative of the appellant submitted that the appellant had

obtained SCORES Login ID and Password, however, the same being

misplaced, the appellant has applied for the same once again on

December 17, 2013. It is further submitted that there being no investor

loss and the alleged violation being not repetitive in nature, the penalty

of ` 1 lac imposed being exorbitant and excessive be quashed and set

aside.

5. We see no merit in the above contentions. Admittedly, the show

cause notice was issued on January 21, 2013 and as on the date of the

passing of the impugned order on January 07, 2014 there were three

investor grievances which had remained to be redressed. This Tribunal

in a number of cases has taken the view that the fact that no investor has

suffered and that the violation is not repetitive cannot be a ground to

escape penalty for the violations committed. It is not in dispute that the 3

penalty imposable against the appellant under Section 15A(a) and

Section 15C is ` 1 crore. However, taking into consideration all

mitigating factors, the Adjudicating Officer of SEBI has imposed

penalty of ` 1 lac as against the penalty of ` 1 crore imposable under the

SEBI Act, which cannot be said to be unreasonable or excessive.

6. In these circumstances, we see no reason to entertain the present

appeal.

7. Accordingly, the appeal is dismissed with no order as to costs.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Jog Singh Member 09.06.2015 Prepared & Compared By: PK