Order against Atmaram Kejriwal and Company, Member, Uttar Pradesh Stock Exchange Association Ltd

1. Securities and Exchange Board of India (hereinafter referred to as SEBI), initiated proceedings under Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 against Atma Ram Kejriwal & Co. (hereinafter referred to as the Broker), Member, Uttar Pradesh Stock Exchange Association Ltd. (hereinafter referred to as UPSE) to adjudge the alleged contravention of the provisions of Sections 15A(c), 15B, 15F(a), and 15F(b) of Securities and Exchange Board of India Act, 1992 (Act), as it had failed to maintain statutory books of accounts and records, client registration forms/ agreements etc. The Adjudicating Officer, after giving an opportunity to the Broker and considering its submissions, vide order dated June 11, 2004 imposed a penalty of Rs.1,50,000/- against the Broker. The Broker was further directed to pay the said penalty within 45 days of the receipt of the said order. However, the Broker had failed to pay the penalty, as directed, despite reminders dated November 18, 2004 and December 3, 2004. Thereafter, on March 1, 2005, the Broker filed an appeal against aforesaid order of the Adjudicating Officer before the Hon’ble Securities Appellate Tribunal (SAT), Mumbai. There was a delay of 192 days in filing the said appeal.

2. Subsequently, as the Broker had failed to comply with the order of the Adjudicating Officer, SEBI initiated proceedings against it, under the then existing provisions of Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 (hereinafter referred to as the Enquiry Regulations) to enquire into the alleged violation of Regulation 27 (xi) of Securities and Exchange Board of India (Stock Brokers and Sub Brokers) Regulations, 1992. After considering the materials available on record including the documents submitted by the Broker, the Officer appointed to conduct proceedings, vide report dated November 10, 2005 recommended to impose a major penalty of suspension of the certificate of registration of the Broker for a period of four months. Subsequently, the Hon’ble SAT, vide order dated August 9, 2006 dismissed the appeal filed by the Broker. Pursuant to the said report and in view of the dismissal of the appeal filed by the Broker, SEBI, vide letter dated November 3, 2006, advised the Broker to pay the penalty as ordered by the Adjudicating Officer, before November 25, 2006. It was also informed that the non payment of penalty might result in the initiation of proceedings as deemed appropriate including cancellation of the certificate of registration. Thereafter, the Broker vide letter dated November 25, 2006 enclosed a Demand Draft No. 797448 (dated November 25, 2006) drawn on Standard Chartered Bank, Mumbai for an amount of Rs.1,50,000/- in favour of SEBI, towards the said penalty amount.

3. I note that though, the Enquiry Regulation was repealed with effect from the notification of Securities and Exchange Board of India (Intermediaries) Regulations, 2008, anything done and any action taken under the said Enquiry Regulations is saved in terms of Regulation 38 of Securities and Exchange Board of India (Intermediaries) Regulations, 2008. The present proceedings was initiated under the provisions of the then existing Enquiry Regulations, as the Broker had failed to comply with the order of the Adjudicating Officer dated

June 11, 2004, within the stipulated time. By not paying the penalty as ordered by the Adjudicating Officer, the Broker had violated the provisions of Regulation 27(xi) of the Broker Regulations. As an intermediary operating in the securities market, the Broker inter alia shall abide by the provisions of Securities and Exchange Board of India Act 1992 and the rules regulations issued there under including the order of the Adjudicating Officer, within the stipulated time. I note that, pursuant to the letter of SEBI dated November 3, 2006, the Broker had paid the penalty, vide letter dated November 25, 2006. Taking into consideration, the facts of the case, I do not consider it fit to impose the penalty as recommended. In the attending circumstances, I dispose of the present proceedings as ordered herein under.

4. In view of the fact that Atmaram Kejriwal & Company, Member, Uttar Pradesh Stock Exchange Association Ltd. (Registration No. INB100362712) has remitted the penalty as directed by Securities and Exchange Board of India, vide letter dated November 3, 2006 and considering the materials available on record, I, in exercise of the powers conferred on me in terms of Section 19 of the Securities and Exchange Board of India Act, 1992 read with Regulation 28(2) of Securities and Exchange Board of India (Intermediaries) Regulations, 2008, do not deem it necessary to impose any additional penalty on account of the charge of late payment, but advise the aforesaid stock broker to comply with all statutory provisions/instructions received in the course of discharge of his duty in future, without such delay.

K. M. ABRAHAM WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OFINDIA Place: Mumbai Date: October 21, 2008