Order in the matter of PSIT Infrastructure and Services Ltd.

Under Sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992

In Re: Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003

In the matter of PSIT Infrastructure and Services Ltd.

In respect of:

S. No. Entity’s Name PAN 1 Puspal Chandra ACRPC1647G 2 Dilip Kumar Mandal BQCPM7585H 3 Sanjoy Chandra AHSPC1661N 4 Mina Chandra AEMPC2501C 5 Prakash Mulji Vora AACPV8263G 6 Shilpa Maheshwari AINPM2448P 7 Subhash Gangaprasad Gupta AJQPG4738E 8 Mital Dhirajlal Shah BTWPS3749C 9 Amit Mahendra Vyas ACBPV0578K 10 Yogesh Sharma CZQPS8304C 11 Hemant Vasant Limbachia ADBPL4062H 12 Ramji Karsan Hirani ACYPH7822F 13 Bharat Vasantlal Thakker ACBPT1812C

Order in the matter of PS IT Infrastructure and Services Ltd.

14 Shreechand Gulabchand Sarda AAZPS3070K 15 Sanjaykumar Sukhdevaram Maharshi AQGPM2184D 16 Rajesh Kumar Maheshwari HUF AALHR6747N 17 Amol Shreechand Sarda ANVPS5646N 18 Parul Somani BBYPS1156D 19 Dilip Khatri AVEPK4959M 20 Vandana Shankar Magar BLWPM8541C 21 Kavshalyadevi Gulabchand Sarda ANVPS9042G 22 Nilesh Tukaram Ghadshi AJLPG0362K 23 Raj Kumar Sharma BMIPS9482B 24 Rajendra Kumar Kothari AFUPK9415J 25 Saroj Devi Kothari ARCPK1018M 26 Nishant Kothari BJTPK3949M

1. Securities and Exchange Board of India (“SEBI”) conducted an investigation into the trading and dealings in the scrip of PSIT Infrastructure and Services Ltd. (hereinafter referred to as 'PSIT/the company') as it observed abnormal movement in the price of the scrip on Bombay Stock Exchange Ltd. (“BSE”) during May 01, 2012 to July 31, 2015 (hereinafter referred to as the “investigation period / IP”).

2. It was observed that the company had made a preferential allotment of 1,10,00,000 shares of Rs. 10/- each at par on July 23, 2012 to 49 non-promoter entities. Further, two companies namely, Crescent Digital Technologies Limited and Swift IT Infrastructure and Services Ltd. merged with PSIT on June 05, 2013. Pursuant to the merger, 4,25,20,000 equity shares of Rs.10/- each were issued by PSIT. The new securities of PSIT were listed on BSE and permitted for trading on exchange w.e.f. August 13, 2013. Moreover, there was a sub-division of Rs. 10/- per share of the Company into the shares of Rs. 1/- each w.e.f. September 03, 2014.

3. Investigation revealed that the maximum price rise in the scrip of PSIT occurred during the period May 01, 2012 to February 11, 2014 (hereinafter referred to as 'the price rise period'). During this price rise period the price rose from Rs. 50 to Rs. 466.95.

4. The Price Volume details of the scrip during this price rise period are as follows:

Dates Opening Closing Low High Avg. no. of Price price price(volume) Price(volume) (shares) (volume) on (volume) on during the during the period traded first day of last day of period (Rs.) (Rs.) daily the the period during the period(Rs.) (Rs.) period. May 01-2012 to Price 50 466.9 4.95 (21/05/12) 466.9 (11/02/14) 107.59 February 11, 2014 Vol 900 103 1 (17/10/13) 6050 (19/11/13)

5. PSIT scrip was under suspension for trading from May 19, 2004 to February 9, 2012 and even after revocation of suspension, there was no trading till May 21, 2012. Investigation revealed that on May 21, 2012, only one trade took place. Subsequently, after a gap of almost 8 months, the trading started from January 2013 onwards when 59 trades took place till May 2013 and 123 trades took place from September 10, 2013 to February 11, 2014.

6. There were a total of 185 trades for 17,431 shares on 162 trading days in PSIT scrip during this price rise period. On 155 days, there was only one trade in the scrip. Further, 45 entities bought and 35 entities sold during the period.

7. Investigation observed that the trades by the sellers contributed to increase in the Last Traded Price (LTP) by a total of Rs. 462.65 during this price rise period (positive LTP). Further, 22 out of 35 sellers were connected to each other on the basis of off-market transfers and common addresses.

8. It was observed that the 22 seller entities received shares in the off-market from 4 entities namely, Rajendra Kothari, Saroj Devi Kothari, Nishant Kothari and Raj Kumar Sharma.

9. The name and details of connections of the Noticees are as follows-

Table 1 Sn. Name Connection 1. Puspal Chandra Entities at Sl. No. 1-8 2. Mital Dhirajlal Shah Received shares in off market from Rajendra Kothari (at Sl. No. 3. Amit Mahendra Vyas 23) 4. Yogesh Sharma Entities at Sl. No. 9-14 5. Shreechand Gulabchand Sarda Received shares in off market from Saroj Devi Kothari (at Sl. 6. Amol Shreechand Sarda No. 24) Entities at Sl. No. 15-22 7. Dilip Khatri Received shares in off market from Nishant Kothari (at Sl. No. 8. Kavshalyadevi Gulabchand Sarda 25) 9. Sanjoy Chandra Entities at Sl. No 23- 25 10. Shilpa Maheshwari Same address (51/8 G. T. Road (N) Pilkhana Bazaar, Howrah, 11. Subhash Gangaprasad Gupta West Bengal, India, 711101 ). They also transferred shares 12. Sanjaykumar Sukhdevaram Maharshi through off-market transactions to Noticees No. 1 to 22 as noted 13. Rajesh Kumar Maheshwari HUF above at around the same period of time. 14. Parul Somani Entities at Sl. No. 26 15. Dilip Kumar Mandal Transferred shares in the off market to Puspal Chandra (Entity 16. Mina Chandra at Sl. No. 1) 17. Prakash Mulji Vora Entities at Sl. No. 1,9,16 18. Hemant Vasant Limbachia Same address (Nabadal Road, PO- Hridaypur, North 24 19. Ramji Karsan Hirani Parganas, Kolkata, 700127) as per UCC data received from 20. Bharat Vasantlal Thakker BSE. They also purchased shares in off-market from 3 entities 21. Vandana Shankar Magar i.e. Noticees No. 23 to 25 who belong to one family. 22. Nilesh Tukaram Ghadshi Entities at Sl. No. 5,6,8 23. Rajendra Kothari Same address (10-12 Chadralok B, ManavMandir Road, 24. Saroj Devi Kothari Mumbai, Maharashtra, India, 400006) as per UCC data 25. Nishant Kothari received from BSE. They purchased shares in off-market from 26. Raj Kumar Sharma Rajendra Kothari. Entities at Sl. No. 10,13 Same address (B- 101, Ganges Residency, 36 Tollygunge Circular Road, Kolkata, 32, 700053) as per UCC data received from BSE. They also purchased shares in off market from Saroj Devi Kothari (The entities named in this Table are hereinafter collectively referred to as “the Noticees” and individually by their respective names or the no. at which they appear in this Table).

10. Investigation revealed that 22 seller entities (Sl no 1-22 of table 1 above) who received shares in the off-market from 4 entities (Sl no 23-26 at table 1 above) sold majority of the shares in the market over a period of four months September, 2013 onwards. The dates on which shares were transferred (off-market) to the 22 seller entities and the subsequent period during which these entities sold the shares in the market are given below:

Table 2 S. Name of seller Period of trading by the Shares received from Date of No. LTP contributors (Quantity of shares receipt Beginning End date received) date

1. Puspal Chandra 06/11/13 17/01/14 Raj Kumar Sharma (100) 10/10/13 Rajendra Kothari (50) 2. Dilip Kumar Mandal 31/01/13 17/10/13 Nishant Kothari (100) 28/01/13 3. Sanjoy Chandra 05/11/13 15/01/14 Saroj Devi Kothari (50) 10/10/13 4. Mina Chandra 08/11/13 10/02/14 Nishant Kothari (100) 15/10/13 5. Prakash Mulji Vora 08/10/13 07/02/14 Nishant Kothari (50) 25/09/13 6. Shilpa Maheshwari 24/10/13 04/02/14 Saroj Devi Kothari (50) 25/09/13 7. Subhash Gangaprasad Gupta 29/10/13 31/01/14 Saroj Devi Kothari (50) 25/09/13 8. Mital Dhirajlal Shah 07/10/13 28/01/14 Rajendra Kothari (50) 03/10/13 9. Amit Mahendra Vyas 25/10/13 29/01/14 Rajendra Kothari (50) 03/10/13 10. Yogesh Sharma 21/10/13 30/01/14 Rajendra Kothari (50) 03/10/13 11. Hemant Vasant Limbachia 18/10/13 23/01/14 Nishant Kothari (50) 08/10/13 12. Ramji Karsan Hirani 18/11/13 06/02/14 Nishant Kothari (50) 08/10/13 13. Bharat Vasantlal Thakker 01/10/13 21/01/14 Nishant Kothari (50) 25/09/13 14. Shreechand Gulabchand 04/10/13 22/01/14 Rajendra Kothari (50) 19/09/13 Sarda 15. Sanjaykumar Sukhdevaram 14/11/13 27/01/14 Saroj Devi Kothari (50) 30/09/13 Maharshi 16. Rajesh Kumar Maheshwari 26/12/13 03/02/14 Saroj Devi Kothari (50) 25/09/13 HUF 17. Amol Shreechand Sarda 03/10/13 05/02/14 Rajendra Kothari (50) 19/09/13 18. Parul Somani 28/10/13 02/01/14 Saroj Devi Kothari (50) 25/09/13 19. Dilip Khatri 23/10/13 31/12/13 Rajendra Kothari (50) 03/10/13 20. Vandana Shankar Magar 24/09/13 30/12/13 Nishant Kothari (50) 19/09/13 21. Kavshalyadevi Gulabchand 27/09/13 28/11/13 Rajendra Kothari (50) 19/09/13 Sarda 22. Nilesh Tukaram Ghadshi 25/09/13 13/11/13 Nishant Kothari (50) 19/09/13

11. In view of the above, it is observed that majority of the 22 seller entities who received shares in the off-market, began to sell their shares in the market within a month of off-market share transfer, except entities at serial no. 7, 12, 15 and 18 of Table no. 2 who began to sell shares within 1-2 months from the date of receipt of shares in off-market and entity at serial no. 16 of Table 2, who began to sell shares after three months from the date of receipt of shares in off-market.

12. During the investigation, the order book analysis of the 22 seller entities revealed that there was a large demand (buy order quantity) for PSIT shares during the period in which 22 seller entities sold in the market. However, it was found that despite large demand, the 22 seller entities repeatedly placed sell orders for less than 10 shares (single digit quantity) at upper limit of daily price band of the PSIT scrip. For instance, analysis of the orders of one of the seller entity, Pupal Chandra is given below:

Table 3 Order date Order time Order No. Client name Sell sell Pendi LTP Share sell order orde ng buy variation holdin rate r qty order g at this before price sell order 06/11/2013 15:07:20.245570 12000019004929 Puspal 132.8 5 6000 2.6 145 Chandra 11/11/2013 14:43:15.033958 22000024013535 Puspal 138 4 2200 2.75 140 Chandra 02/12/2013 14:52:50.733942 15000024011733 Puspal 185.45 2 3200 3.6 136 Chandra 09/12/2013 14:50:17.021228 18000065014518 Puspal 199.95 4 6575 -0.7 129 Chandra 10/12/2013 14:08:36.686782 14000022011439 Puspal 203.9 2 6725 3.95 125 Chandra 06/01/2014 14:45:37.682664 12000105009616 Puspal 285.05 5 1220 5.55 123 Chandra 08/01/2014 14:58:50.405821 22000019005872 Puspal 296.55 5 1651 5.8 118 Chandra 10/01/2014 14:53:10.409783 15000019011446 Puspal 308.45 6 1100 6 113 Chandra 13/01/2014 15:00:38.353529 12000108391226 Puspal 314.6 5 550 6.15 107 Chandra 17/01/2014 15:24:31.255386 12000105394872 Puspal 333.75 6 2135 6.5 102 Chandra

13. It is observed from the above analysis that Puspal Chandra was repeatedly placing sell orders for very small quantity as compared to the number of shares held by him when sufficient buy orders were pending. Investigation revealed that the sell order placement by the remaining 21 seller entities was similar.

14. Further, the Investigation revealed that the 22 seller entities were sellers in 120 out of the 160 trades which contributed to positive LTP increase during the period when the price increased from Rs 50 to Rs 466.9. Further, the trades of the 22 seller entities together contributed Rs. 400.45 to the market positive LTP increase (in 120 trades), which is 86.56% of market positive LTP increase during the period. Their contribution to the net LTP increase was Rs. 399.75 which is 95.88% of the net LTP increase during the period.

15. The details of LTP contribution by the 22 sellers are as follows:

S. Seller Name Net LTP Positive LTP No. LTP % No. of Trade LTP % No. Trad Difference LTP trades Quantity Differ LTP of e (Rs.) differ ence differ tra Qua ence (Rs.) ence des ntity 1 Puspal Chandra 42.2 10.12 10 44 42.9 9.27 9 40 2 Dilip Kumar 33.95 8.14 38 98 33.95 7.34 38 98 Mandal 3 Sanjoy Kumar 31.65 7.59 8 32 31.65 6.84 8 32 Chandra 4 Mina Chandra 25.6 6.14 5 26 25.6 5.53 5 26 5 Prakash MuljiVora 22.65 5.43 5 26 22.65 4.90 5 26 6 ShilpaMaheshwari 22 5.28 4 24 22 4.76 4 24 7 SubhashGangapra 18.9 4.53 4 26 18.9 4.09 4 26 sad Gupta 8 MitalDhirajlal Shah 18.25 4.38 5 24 18.25 3.94 5 24 9 Amit Mahendra 18.05 4.33 4 17 18.05 3.90 4 17 Vyas 10 Yogesh Sharma 17.55 4.21 4 17 17.55 3.79 4 17 11 HemantVasantLim 16.4 3.93 4 20 16.4 3.54 4 20 bachia 12 RamjiKarsanHirani 16.3 3.91 3 14 16.3 3.52 3 14 13 Bharat 16 3.84 4 18 16 3.46 4 18 VasantlalThakker

14 ShreechandGulab 15.3 3.67 3 19 15.3 3.31 3 19 chandSarda 15 SanjaykumarSukh 15.1 3.62 3 16 15.1 3.26 3 16 devaramMaharshi 16 Rajesh Kumar 13.05 3.13 2 11 13.05 2.82 2 11 Maheshwari HUF 17 AmolShreechandS 12.35 2.96 2 12 12.35 2.67 2 12 arda 18 ParulSomani 10.95 2.63 3 15 10.95 2.37 3 15 19 Dilip Khatri 10.5 2.52 3 13 10.5 2.27 3 13 20 Vandana Shankar 10.3 2.47 3 18 10.3 2.23 3 18 Magar 21 KavshalyadeviGul 6.8 1.63 2 8 6.8 1.47 2 8 abchandSarda 22 NileshTukaramGh 5.9 1.42 2 9 5.9 1.28 2 9 adshi Total 399.75 95.88 121 507 400.4 86.56 120 503 5

ISSUANCE OF SHOW CAUSE NOTICE

16. On the basis of the above noted observations of the investigation, SEBI issued a show cause notice dated September 13, 2017 to the 26 entities named in table 1 above (hereinafter collectively referred to as “the Noticees” and individually by their respective names). It is alleged in the SCN that the Noticees were part of a manipulative scheme wherein 4 connected entities (Sl. No. 23-26 of table 1) transferred shares in off-market to the remaining 22 entities (Sl. No. 1-22 of table 1) who sold these shares in small quantities (i.e. less than 10 shares per sell order) over a period of 2-3 months at progressively higher prices. The trades were done in a manner to mark a new high price every day with low volume transactions and there was a single trade executed on 155 out of 162 trading days during the period. Hence, it is alleged that the 22 connected seller entities contributed 95.8% to the net LTP increase and 86.56% to the market positive LTP increase by indulging in manipulative and non-genuine trades as part of a scheme to manipulate the price of PSIT scrip along with 4 connected entities who provided them the shares for indulging in the manipulative trading.

17. In view of the above, it is alleged that the Noticees violated Regulations 3(a), (b), (c), (d) and Regulations 4(1), 4(2), (a) and (e) of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (“PFUTP Regulations”). Vide the said SCN, the Noticees were called upon to show cause as to why suitable directions under Sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 should not be issued against them for the alleged violations referred above.

REPLIES / SUBMISSIONS FILED BY THE NOTICEES.

18. The replies filed by the Noticees in response to the SCN are summarized in the paragraphs below. The allegations levelled in the SCN have been denied by all the Noticees who have filed their response to the SCN. For the sake of brevity, repetition of common submissions has been avoided, however, the same have been considered and will be referred at appropriate places in this order.

19. PUSPAL CHANDRA

19.1. In the said Notice adverse inferences qua me have been drawn based on the alleged connection as set out in the Notice and by clubbing me with other persons/entities. The said clubbing with others has resulted in distorted conclusions against me. The entire grouping is erroneous and misleading and I have erroneously been lumped with others.

19.2. The allegations in the Notice proceed on specious and extraneous grounds disregarding the material circumstances. All the allegations are unsubstantiated, unjustified, unwarranted and contrary to factual position on record. The findings smack of predetermined mind to penalize me under some pretext or other, overlooking the obvious that defines the case.

19.3. It is denied that I had contributed to positive LTP and increased scrip price as alleged. It is submitted that all our trades in the scrip of PSIT were bonafide and in the ordinary course of business, de hors sinister intent or design.

19.4. I am an individual trader/investor in the securities market. Since inception I have been carrying on the business of trading in the securities market with fairness and in accordance with the provision of law. My details of trading activity in the securities market during the period from 2012-13 to 2013- 14 are enclosed.

19.5. It is submitted that there is no connection between me and other sellers who had sold the shares of PSIT during the relevant time.

19.6. The allegation of connection has been made on basis of the common address and off-market transfers is misleading and I have erroneously been lumped with others without any basis. Based on the alleged connections acts of other persons/entities cannot be fastened on me or any adverse inference drawn against me.

19.7. In so far as purported connections as set out in Table I, based on the alleged off-market transfer and common address are concerned, the following be noted:

 In so far as off-market transaction with Rajendra Kothari is concerned, it may be noted that the same was a normal business transactions in the ordinary course and based on the same no adverse can be drawn against me. Further the Notice is silent as to how the said off market transfer has resulted in the violation of PFUTP Regulation.

 With regard to the common address with Sanjoy Chandra and Mina Chandra it is submitted that both of them are my family members and we stay together at Nabadal Road, PO- Hridaypur, North 24 Parganas, Kolkata, 7000127. It is submitted that all of us were trading in the scrip of PSIT in the ordinary course and based on the same no adverse inference can be drawn against me. It is not the case of SEBI that we all were involved in any circular trade/synchronized trades.

19.8. It is submitted that the observations pertaining to the receipt of shares from off-market from Raj Kumar Sharma and Rajendra Kothari and the subsequent sale thereafter are a matter of record. However, it is denied that I had contributed to +ve LTP as alleged.

19.9. I had sold the shares in my account on multiple dates i.e. from 06.11.2013 to 17.01.2014. Merely because I had sold the shares in my account during the relevant time when others were also selling, no adverse inferences can be drawn against me. My sales were independent and had nothing to do with the trading done by other entities/ persons. It is submitted that the shares were sold in the ordinary course. It may be appreciated that since the price of the scrip quoting in the market was decent and fetching me good return on investment, I had decided to sell the shares. At the relevant time, I was not aware of other persons/entities who were trading in the scrip and the same is of no concern to me. Further, I am not aware about the mode and manner of trading of the other persons/entities. Based on their trading no adverse inferences can be drawn against me.

19.10. With regard to the allegation that despite large demand, I placed sell orders for limited number of shares it is submitted that nothing turns on the same and no adverse inference can be drawn against me. Nothing prohibits me from selling the shares in limited quantity. Here it may be appreciated that a prudent Broker/Investor would never sell all of his entire holding on one shot, especially if the price of the scrip is on a bullish trend.

19.11. It is denied that I was repeatedly placing sell orders for small order quantity across different days and contributed to significant positive last traded price. The said allegation is totally absurd. Admittedly, I was a seller and was placing my sell order based on the best available price pending in the system.

19.12. As per Table 3 of the SCN it is evident that my sell orders were based on the buy orders which were already pending in the system. I had sold my shares at the said buy order rate pending in the system. As stated hereinbefore, as a seller I would sell the shares at the highest buy order rate pending in the system. Same is a common market practice and based on my legitimate transaction and no adverse can be drawn against me.

19.13. The quantity of my alleged trades (150 shares) vis a vis the total volume in the scrip of PSIT i.e. 5702.27 during the investigation period was exceedingly insignificant 2.6% to have any kind of impact on either the price or volume of the scrip. The allegation of creating positive LTP cannot sustain in view of the miniscule quantum of my alleged trades (150 shares) during the Investigation Period. Such miniscule quantum of trades cannot result in price rise. Thus, effectively the alleged trades of 150 shares had no impact either on the price or the volume of the scrip.

19.14. It is submitted that my sales, irrespective of quantity cannot result in positive LTP. It is submitted that the allegation of contribution to positive LTP can be alleged only against a buyer who has placed order at a price higher than LTP. Strangely, no allegation has been made against the buyers/counter parties to my sale in the SCN. In fact, it appears that no proceeding has been initiated against any of the buyers /counterparties by SEBI.

19.15. It is submitted that the allegation against sellers for contribution to positive LTP collapses when it is evident that (i) no connection/relationship is established between the counter parties (ii) no action has been taken against the buyers who placed the buy order above LTP and contributed to positive LTP. Further, the allegation against the sellers for contribution of positive LTP further reinforces the preconceived mind set of the Investigating Officer wherein somehow the Investigating Officer wants to hold me guilty ignoring the obvious.

19.16. Reliance was placed on the order of Hon’ble SAT in the matters of Smitaben N. Shah vs. Securities and Exchange Board of India (SAT Order dated 30.07.2010 Appeal No. 37 of 2010) and Mr. Babubhai Desai v SEBI: - SAT Order dated 15.02.2016 to submit that there has to be unambiguous and clear evidence in respect of the connection sought to be established among the entities.

20. Dilip Kumar Mandal

20.1. In so far as off-market transaction with Nishant Kothari is concerned, it may be noted that the same was a normal business transactions in the ordinary course and based on the same no adverse can be drawn against me. Further, the Notice is silent as to how the said off market transaction has resulted in the violation of PFUTP Regulation.

20.2. I had sold the shares in my account on multiple dates i.e. from 31.01.2013 to 17.10.2013. Merely because I had sold the shares in my account during the relevant time when others were also selling, no adverse inferences can be drawn against me. My sales were independent and had nothing to do with the trading done by other entities/persons. It is submitted that the shares were sold in the ordinary course.

20.3. It is submitted that the quantity of my alleged trades (100 shares) vis a vis the total volume in the scrip of PSIT i.e 20011.74 during the investigation period was exceedingly insignificant i.e. 0.49 % to have any kind of impact on either the price or volume of the scrip. The allegation of creating positive LTP cannot sustain in view of the miniscule quantum of my alleged trades (100 shares) during the Investigation Period. Such miniscule quantum of trades cannot result in price rise. Thus, effectively the alleged trades of 100 shares had no impact either on the price or the volume of the scrip.

21. SANJOY CHANDRA

21.1. In so far as purported connections as set out in Table 1, based on the alleged off-market transfer and common address are concerned, the following be noted: 21.1.1. In so far as off-market transaction with Saroj Devi Kothari is concerned, it may be noted that the same was a normal business transaction in the ordinary course and based on the same no adverse can be drawn against me. Further, the Notice is silent as to how the said off market transfer has resulted in the violation of PFUTP Regulation.

21.1.2. With regard to the common address with Puspal Chandra and Mina Chandra it is submitted that both of them are my family members and we stay together at Nabadal Road, P0- Hridaypur, North 24 Parganas, Kolkata, 700127. It is submitted that all of us were trading in the scrip of PSIT in the ordinary course and based on the same, no adverse inference can be drawn against me. It is not the case of SEBI that we all were involved in any circular trade/synchronized trades.

21.2. The quantity of my alleged trades (50 shares) vis a vis the total volume in the scrip of PSIT i.e.5594.68 during the investigation period was exceedingly insignificant i.e. 0.89 % to have any kind of impact on either the price or volume of the scrip. The allegation of creating positive LTP cannot sustain in view of the miniscule quantum of my alleged trades (50 shares) during the Investigation Period. Such miniscule quantum of trades cannot result in price raise. Thus, effectively the alleged trades of 50 shares had no impact either on the price or the volume of the scrip.

22. MINA CHANDRA

22.1. In so far as purported connections as set out in Table I, based on the alleged off-market transfer and common address are concerned, the following be noted:

22.1.1. In so far as off market transaction with Nishant Kothari is concerned, it may be noted that the same was a normal business transactions in the ordinary course and based on the same no adverse can be drawn against me. Further, the Notice is silent as to how the said off market transfer has resulted in the violation of PFUTP Regulation.

22.1.2. With regard to the common address with Puspal Chandra and Sanjoy Chandra it is submitted that both of them are my family members and we stay together at Nabada] Road, P0- Hridaypur, North 24 Parganas, Kolkata, 7000127. It is submitted that all of us were trading in the scrip of PSIT in the ordinary course and based on the same no adverse inference can be drawn against me. It is not the case of SEBI that we all were involved in any circular trade/synchronized trades.

22.2. I had sold the shares in my account on multiple dates i.e. from 13.11.2013 to 10.02.2014. Merely because I had sold the shares in my account during the relevant time when others were also selling, no adverse inferences can be drawn against me. My sales were independent and had nothing to do with the trading done by other entities/persons. It is submitted that the shares were sold in the ordinary course. It may be appreciated that since the price of the scrip quoting in the market was decent and fetching me good return on investment, I had decided to sell the shares. At the relevant time, I was not aware of other persons/entities who were trading in the scrip and the same is of no concern to me. Further, I am not aware about the mode and manner of trading of the other persons/entities. Based on their trading no adverse inferences can be drawn against me.

22.3. It is submitted that the quantity of my alleged trades (100 shares) vis a vis the total volume in the scrip of PSIT i.e.7208.53 during the investigation period was exceedingly insignificant i.e. 1.38 % to have any kind of impact on either the price or volume of the scrip. The allegation of creating positive LTP cannot sustain in view of the miniscule quantum of my alleged trades (100 shares) during the Investigation Period. Such miniscule quantum of trades cannot result in price raise. Thus, effectively the alleged trades of 100 shares had no impact either on the price or the volume of the scrip.

23. RAJESH MAHESHWARI

23.1. I would like to inform that 50 equity shares of Parag Shiipa Investments Ltd was purchased by me on 23.09.2013 from Saroj Devi Kothari and purchase consideration was paid vide cheque no. 625790 dated 23.09.2013 drawn on ICICI Bank (copy of bank statement enclosed highlighting the amount so paid i.e. Rs. 3000).

23.2. Subsequently, these 50 shares were sold on different dates.

23.3. Further, these shares were purchased from outside market as there was no volume in the market (Bill copy enclosed) and sold these shares in small quantity as the prices were increasing and realized more profits.

23.4. It is also worthwhile to mention that I have been regularly investing in equity both from off market as well as Market and hence allegation of manipulation is highly unacceptable and is unjust to smog investor like me.

24. SUBHASH GUPTA

24.1. I bought 50 qty of shares of the above mentioned company on 22/09/2013 from Mrs. Saroj Devi Kothari and paid a sum of Rs. 2,950/-. Copy of Bank statement is enclosed

24.2. I bought the above share through off-market because there is no volume in the market. Copy of bill is enclosed for your reference. Further, I sold all my shares and copy of Bill is also enclosed for your reference.

24.3. Further, I sold the shares in piece-meal on various dates because on every sale, I was getting more and more profit. In order to optimize the profit, I sold small quantity on various dates.

25. AMIT M. VYAS

25.1. With reference to your above notice, I submit as under. :

25.1.1. I have Purchased 50 No. of Shares of Parag Shilpa Investment Ltd. Now known as PSIT Infrastructure and Services Ltd. from Mr. Rajendra Kumar Kothari and Paid Rs. 3050/- vide chq. No.256681 of State Bank of India. Copy of Statement is enclosed here with for your reference.

25.1.2. I have sold the said 50 shares details of below copy of Sales Contract enclosed.

25.1.3. This is to inform you that there was no fraudulent interest on my part and there was interest to earn a few revenue.

25.2. Since the matter was only of 50 shares and a small amount, I had not envisaged any fraudulent act. Again, I had not known that the share price would go up by such an amount.

25.3. If you check my previous records, earlier too I was trading/investing in a small way but always adhered to the market rules & regulations.

25.4. The problematic trade was a one off case and I assure you that it will not be repeated. In fact, I also didn't know at that time that shares could not be transferred off market in my account.

25.5. I hereby request SEBI that no strict action be taken against me and kind cooperation is expected from SEBI’s side.

26. HEMANT LIMBACHIA

26.1. Firstly, I don't know any of 25 other Noticees to whom this SCN is served as mentioned in the show cause notice nor I'm connected with them in any way.

26.2. I had bought a very small amount of 50 shares of Company as a part of my investment and trading activity. After my purchased, as I stock price went up, I sold part of shares to earn a trading profit.

26.3. As mentioned in your para 8 of the SCN, that I have sold majority of shares during the period 18/10/2013 till 23/1/2014 and thus contributing to LTP. I would like to highlight that I have sold only 20 shares during the said period from the total 50 shares and while remaining 30 shares were sold during on 15/5/2014 in a single transaction. (Enclosing the statement of sale of transaction).

26.4. The transaction of 20 shares was being carried out as a trader and investor in the capital market. The trade done by me was based purely on commercial terms as a trader and investor of capital market with no intention to do any type of manipulation in the price of the Company. Further, I would also like to inform you that, neither have I had a business relationship with the Company nor, I am m related or connected with the any of the Directors, KMP or Promoters of the Company.

27. SANJAY KUMAR MAHARSHI

27.1. I purchased 50 shares of the PSIT Ltd on 22/09/2013 from Saroj Devi Kothari and paid Rs.2950/- Copy of Bank statement highlighting Bank Transactions is enclosed.

27.2. We sold 50 qty of shares and copy of Bill is also enclosed for your reference.

27.3. 0ff-market purchase because there is no volume in the market. So this was the reason, I brought the above mentioned shares through off-market. copy of bill is enclosed for your reference.

27.4. Further, I sold the shares in small quantities on various dates because on a daily basis price was increasing. Therefore, I sold some on various intervals to maximize the income.

28. NISHANT KOTHARI

28.1. I deny all the allegations levelled against me in the Notice.

28.2. Charges in the Notice are based on the off market transfer done by me to the eight entities namely Prakash Mulji Vora, Bharat Thakkar, Nilesh Ghadshi, Vandana Magar, Ramji Karsan Irani, Dilip Mandal, Hemant Lambacha and Mina Chandra (herein after mentioned as "8 entities" or "entities"). It has been alleged that I was a part of the manipulative scheme based on transfer of shares in off market.

28.3. In the said Notice adverse inferences qua me have been drawn based on the alleged connection as set out in the Notice and by clubbing me with other persons/entities. The said clubbing with others has resulted in distorted conclusions against me. The entire grouping is erroneous and misleading and I have erroneously been lumped with others.

28.4. The said off-market transfer made to the abovementioned entities were made in an independent manner and in the ordinary course of business and that I was not aware of any transaction which took place after the scrips were transferred to the entities. Further, I had no connection with any of the mentioned entities who traded in the said scrip of PSIT during the relevant time.

28.5. With respect to the said sale of share in the market by the abovementioned entities, I would like to state that I was not related to any of the entities as mentioned in the notice and was not aware of the subsequent sale of shares and as to whether the sales have resulted in increase of LTP. It is reiterated that I was not a part of a manipulative scheme as alleged. It is submitted that transfer of the scrip of PSIT were bonafide and in the ordinary course of business, dehors sinister intent or design.

28.6. I am an individual trader/investor in the securities market. Since inception I have been carrying on the business of trading in the securities market with fairness and in accordance with the provision of law.

28.7. I have never defaulted in meeting my payment or delivery obligations to the brokers or the Exchange.

28.8. It may be noted that the preferential allotment made by PSIT had the approval of the shareholders and stock exchanges and details about the same were in public domain and nobody had raised any grievance about the same during the relevant period. Further, as stated herein before I had no role whatsoever to play in the trading done by various entities/persons (as set out in the Notice) in the scrip. Even there is no allegation to this effect in the Notice.

28.9. It is submitted that there is no connection between me and other sellers who had sold the shares of PSIT during the relevant time save and except as a seller.

28.10. The allegation of connection has been made on basis of the common address and off-market transfers. The same is misleading and I have erroneously been lumped with others without any basis. Based on the alleged connections acts of other persons/entities cannot be fastened on me or any adverse inference drawn against me.

28.11. In so far as off-market transaction with seller entities is concerned, it may be noted that the same was a normal business transactions in the ordinary course and based on the same no adverse can be drawn against me.

28.12. With regard to the common address with Rajendra Kumar Kothari and Saroj Devi Kothari it is submitted that both of them are my family members and we stay together at 51/8 G. T. Road (North), Pilkhana Bazar, 1st Floor-Howrah- West Bengal- 711101. It is submitted that all of us had transferred the shares of PSIT in the ordinary course and based on the same no adverse inference can be drawn against me. It is not the case of SEBI that we all were involved in any circular trade/synchronized trades.

28.13. I am not aware of the subsequent transfer/ sale by the said entities and the same is of no concern to me. Further, I am not aware that the sales made by the entities were at above LTP. There is nothing in the SCN to demonstrate that I was aware of the sales done by the said entities at above LTP and in the absence of the same no adverse inference can be drawn against me.

28.14. I would like to bring to your notice that my transaction with the 8 entities was independent and made in the ordinary course of the business. I invite your attention to the Order passed by the Hon'ble Securities Appellate Tribunal in the matter of Smitaben N. Shah vs. Securities and Exchange Board of India (SAT Order dated 30..07.2010 Appeal No. 37 of 2010) wherein it was inter alia observed as follows:- "We cannot lose sight of the fact that a serious charge like fraudulent trading cannot be established on the basis of these tenuous and far fetched connection. In this view of the matter, we have no hesitation to hold that the appellants did not act in tandem with any of the entities referred to in Annexure 2 as alleged in the show cause notice and found by the whole time member."

28.15. In another SAT order dated Mr. Babubhai Desai v SEBI it was inter alia observed as follows:- "There has to be unambiguous and clear evidence in respect of the connection sought to be established among the ten appellants by the learned adjudicating officer in the impugned order. The guilt or culpability of each of the appellants has to be analyzed and established separately before holding them guilty of forming an alleged group to manipulate the price or volume in a given case. Mere common landline number or that of the accountant of the appellants would not by itself convert certain entities into a group or concert who could have jointly traded in a design. It is a serious charge and hence cogent and convincing evidence is required to be brought on record before the said charge could be proved against the appellants"

28.16. In the facts and circumstances, any directions issued against me would be unjustified and unwarranted. In view of the foregoing submissions, it is humbly prayed that the Noticee be discharged and no penalty be imposed.

28.17. Even if the argument that they were selling in small quantities on several dates to book profit, they really wanted to make the maximum profit out of the shares of PSIT. They should have made attempts to sell shares on all days since it was hitting upper circuit on all these days. But in the present case there were single trades on 155 days out of 162 days and the trades were of all the entities were scattered over a period of time.

29. RAJENDRA KUMAR KOTHARI

29.1. He made submission on the same lines as made by Nishant Kothari noted above except for references to names of the entities to whom he had transferred shares in the off-market. He admitted that Nishant Kothari and Saroj Devi Kothari are his family members.

30. SAROJ DEVI KOTHARI

30.1. She made submissions on the same lines as made by Nishant Kothari noted above except for references to names of the entities to whom she had transferred shares in the off-market. She admitted that Nishant Kothari and Rajendra Kumar Kothari are her family members.

31. RAJ KUMAR SHARMA

31.1. Charges in the Notice are based on the off-market transfer done by me to Puspal Chandra. It has been alleged that I was a part of the manipulative scheme based on transfer of shares in off market.

31.2. In the said Notice adverse inferences qua me have been drawn based on the alleged connection as set out in the Notice and by clubbing me with other persons/entities. The said clubbing with others has resulted in distorted conclusions against me. The entire grouping is erroneous and misleading and I have erroneously been lumped with others.

31.3. The off market transfer was independent and made in the ordinary course of business and that I was not aware of any transaction which took place after the scrips were transferred to Puspal Chandra. Further, I had no connection with any of the mentioned entities who traded in the said scrip of PSIT during the relevant time.

31.4. It is submitted that save and except as a seller there is no connection between me and Puspal Chandra who had sold the shares of PSIT during the relevant time. There is nothing in the SCN to demonstrate that I was aware of the sales done by her at above LTP and in the absence of the same no adverse inference can be drawn against me.

31.5. It is submitted that transfer of the scrip of PSIT were bonafide and in the ordinary course of business, dehors sinister intent or design.

31.6. I am an individual trader/investor in the securities market. Since inception I have been carrying on the business of trading in the securities market with fairness and in accordance with the provision of law.

31.7. I have carried out trading activities in the market with due diligence, fairness and in compliance with the provisions of law. I have never defaulted in meeting my payment or delivery obligations to the brokers or the Exchange

31.8. The preferential allotment made by PSIT had the approval of the shareholders and stock exchanges and details about the same were in public domain and nobody had raised any grievance about the same during the relevant period.

31.9. Further, it is not the case of SEBI that I was involved in any circular trade/synchronized trades.

HEARING AND SUBMISSIONS:

32. An opportunity of personal hearing in the matter was provided to all the Noticees on January 10, 2019. The notice of hearing in that regard was served on all the Noticees. On the scheduled date of hearing, only one of the Noticees namely, Mr. Yogesh Sharma appeared, while no communication seeking adjournment of hearing was received on behalf of other Noticees.

33. During the said hearing, Mr. Yogesh Sharma filed his written submissions and made his arguments in line with the same. His submissions are summarized as under:

33.1. I have not received all annexure/ s as referred in Show Cause Notice dated November 27, 2017. My submission is based on the limited information and without prejudice to my right to submit/ make detailed submission upon receipt of all documents in connection with the matter.

33.2. My trading in scrip of Parag Shilpa Investment Ltd. was miniscule amounting to 0.007% of the Sell transaction at BSE. I was no way associated with Ms. Saroj Devi Kothari or Rajendra Kumar Kothari or others and hence, trading done by him should be seen in isolation and not in combination with trading entities. My trading in the scrip was miniscule and not capable of affecting the price of the said scrip.

33.3. I have placed my reliance on the order passed by Hon'ble Securities Appellate Tribunal in the Vikram Investment Pvt. Ltd. Vs. Securities and Exchange Board of India, Appeal no. 160 of 2004 decided on February 11, 2005 wherein while dealing with a contention as to whether trades were genuine or not, made the following observations which are relevant:- "Even if we consider transactions undertaken for tax planning as being non genuine trades, such trades in order to be held objectionable, must result in influencing the market one way or the other. We do not find any evidence of that either in the investigation conducted by the Bombay Stock Exchange Limited, copy of which annexed to the memorandum of appeal or in the impugned order that there was any manipulation ..... Trading in securities can take place for any number of reasons and the authorities enquire into such transactions which artificially influence the market and induce the investors to buy or sell on the basis of such artificial transactions. "

Thus, in view of the above referred observation of Hon'ble Securities Appellate Tribunal in the above referred matter, impugned transactions do not become illegal or in violation of any relevant law as they did not influence the market or price of the scrip.

33.4. No fund movement has been identified between my bank account and other entities nor the same is discussed and alleged in the Notice.

Therefore, no role has been identified in the transfer of funds or suspicious activities, which further corroborates my contention that there is no relation and association with any of the alleged Ms. Saroj Devi Kothari or Rajendra Kwnar Kothari or other entities who has traded in the said scrip during the investigation period.

33.5. There have been no synchronized trades executed by my side in the scrip of Parag Shilpa Investment Ltd. as it is evident by the Notice itself.

33.6. Trading and demat account was opened only for the purpose of investing my savings in shares. The aforesaid fact is also borne out from the trades/ transactions carried out by me since inception. Also, being a novice in the field of the Securities market, I never indulged in frequent/ routine buying and selling of shares. Further, being a novice and having limited knowledge of Securities Market, I relied on the informal discussion about Securities Market and / or media reports.

33.7. In and around March 2013, relying on informal discussion with certain friends, I purchased the subject shares, i.e. 17 shares of PSIT on 29/03/2013 @ Rs. 61/- per share. However, I deny that the said shares were purchased by me from Mr. Rajendra Kumar Kothari.

33.8. In and around October, 2013, having need of funds, I decided to sell off the subject shares in the market at the best available price. Accordingly, I placed an order for selling of the subject shares during the period 21.10.2013 to 20.01.2014 slightly above the prevailing market price and sold the subject shares for Rs.3180/-. It is noteworthy to mention here that as a result of dealings in subject shares, I made meagre gain of Rs. 2143/-

33.9. My aforesaid transaction in the subject shares constitutes on 0.033% of Non-Promoter Holdings and 0.007% total share capital of the Company. I further submit that my dealings in the subject share was a bonafide trades in the normal course of dealing and my intention was not to inflate, depress or cause any kind of fluctuations in the price of the scrip for getting any wrongful gain or avoidance of loss. Further, I am a bonafide investor and I have not indulged in any activity which creates false or misleading appearance of trading in securities market.

33.10. I am not amongst the Company/Promoter Connected Group. Also, I have no relationship / connection with the Ms. Saroj Devi Kothari, Mr. Rajendra Kumar Kothari and/or any other related/connected entity and/or any promoter/ director/ key managerial person of PSIT Infra Ltd.

ADDITIONAL WRITTEN SUBMISSIONS 34. Afterwards, one last opportunity of submitting additional submissions, if any, was provided to the Noticees and letters in that regard were sent to the Noticees on January 23, 2020. In response thereto, the Noticees vide their letters sent in February 2020 filed additional written submissions, which were substantially in line with their replies / written submissions which have been summarized above. Three Noticees namely, Rajendra Kumar Kothari, Nishant Kothari and Saroj Devi Kothari annexed their earlier replies filed on record while three other Noticees namely, Puspal Chandra, Mina Chandra and Sanjoy Chandra mentioned the prices at which they purchased and sold the shares of PSIT. Further, two other Noticees namely, Subhash Gupta and Sanjay Maharshi cited the order of Hon’ble SAT in the matter of Nishith M. Shah v. SEBI in support of their submission that the connection between buyer and seller has to be established in order to infer a price manipulation in any scrip.

CONSIDERATION OF ISSUES 35. I have considered the allegations levelled in the SCN and the replies, oral / written submissions made by the Noticees in response to the SCN. Taking the same into account, the following issues arise for my consideration: -

A. Whether the Noticees were connected / related to each other and, if so, whether they acted as a group under a pre-mediated scheme wherein 4 connected entities (Noticees no. 23 – 26) transferred shares of PSIT in off-market to the remaining 22 entities (Noticees No. 1 - 22) who sold these shares in very small quantities at progressively higher prices so as to mark a new high price every day with very low volume and thereby increased price of the scrip of PSIT?

B. Whether the transactions / transfers done by Noticees No. 1 to 26 being a part of the scheme to manipulate the price of scrip of PSIT were manipulative and non-genuine in violation of the provisions of PFUTP Regulations?

C. If the answer to issues at A and B are in the affirmative, what directions need to be issued against the Noticees?

36. I now proceed to examine the above issues in light of the submissions made by the Noticees.

A. Whether the Noticees were connected / related to each other and, if so, whether they acted as a group under a pre-mediated scheme wherein 4 connected entities (Noticees no. 23 – 26) transferred shares of PSIT in off-market to the remaining 22 entities (Noticees No. 1 - 22) who sold these shares in very small quantities at progressively higher prices so as to mark a new high price every day with very low volume and thereby increased price of the scrip of PSIT?

B. Whether the transactions / transfers done by Noticees No. 1 to 26 being a part of the scheme to manipulate the price of scrip of PSIT were manipulative and non-genuine in violation of the provisions of PFUTP Regulations?

37. As per the SCN, the price rise in the price rise period (May 1, 2012 to February 11, 2014) was caused majorly by 22 sellers and 4 others from whom the sellers purchased shares in off-market transactions. Allegedly, these sellers placed sell orders for small quantities when large quantities of buy orders were pending and they were holding relatively sizeable number of tradable shares of PSIT. These sellers (Noticees no. 1 to 22) had bought shares of PSIT through off-market transactions from 4 entities (Noticees no 23 to 26). The number of shares bought by these Noticees no 1 to 22 through off-market transfers, the dates of purchase, the names of the transferors (Noticees no 23 to 26) and the period during which they sold afterwards are tabulated as under:

S. Name of seller Period of trading by the LTP Shares received from Date of No. contributors (Quantity of shares receipt Beginning date End date received)

1. Puspal Chandra 06/11/13 17/01/14 Raj Kumar Sharma 10/10/13 (100) Rajendra Kothari (50) 2. Dilip Kumar Mandal 31/01/13 17/10/13 Nishant Kothari (100) 28/01/13 3. Sanjoy Chandra 05/11/13 15/01/14 Saroj Devi Kothari (50) 10/10/13 4. Mina Chandra 08/11/13 10/02/14 Nishant Kothari (100) 15/10/13 5. Prakash Mulji Vora 08/10/13 07/02/14 Nishant Kothari (50) 25/09/13 6. Shilpa Maheshwari 24/10/13 04/02/14 Saroj Devi Kothari (50) 25/09/13 7. Subhash 29/10/13 31/01/14 Saroj Devi Kothari (50) 25/09/13 Gangaprasad Gupta 8. Mital Dhirajlal Shah 07/10/13 28/01/14 Rajendra Kothari (50) 03/10/13 9. Amit Mahendra Vyas 25/10/13 29/01/14 Rajendra Kothari (50) 03/10/13 10. Yogesh Sharma 21/10/13 30/01/14 Rajendra Kothari (50) 03/10/13 11. Hemant Vasant 18/10/13 23/01/14 Nishant Kothari (50) 08/10/13 Limbachia 12. Ramji Karsan Hirani 18/11/13 06/02/14 Nishant Kothari (50) 08/10/13 13. Bharat Vasantlal 01/10/13 21/01/14 Nishant Kothari (50) 25/09/13 Thakker 14. Shreechand 04/10/13 22/01/14 Rajendra Kothari (50) 19/09/13 Gulabchand Sarda 15. Sanjaykumar 14/11/13 27/01/14 Saroj Devi Kothari (50) 30/09/13 Sukhdevaram Maharshi 16. Rajesh Kumar 26/12/13 03/02/14 Saroj Devi Kothari (50) 25/09/13 Maheshwari HUF 17. Amol Shreechand 03/10/13 05/02/14 Rajendra Kothari (50) 19/09/13 Sarda 18. Parul Somani 28/10/13 02/01/14 Saroj Devi Kothari (50) 25/09/13

19. Dilip Khatri 23/10/13 31/12/13 Rajendra Kothari (50) 03/10/13 20. Vandana Shankar 24/09/13 30/12/13 Nishant Kothari (50) 19/09/13 Magar 21. Kavshalyadevi 27/09/13 28/11/13 Rajendra Kothari (50) 19/09/13 Gulabchand Sarda 22. Nilesh Tukaram 25/09/13 13/11/13 Nishant Kothari (50) 19/09/13 Ghadshi

38. It is worth mentioning here that the at the time when the price of the share of PSIT was going up, there were no corporate announcements or news in relation to the company which would justify such a steep rise (from Rs. 50 to 466.9) in the price of its share. The singular trade carried out by the 22 seller Noticees was the only trade on that respective day and was the sole reason for fixing the next higher price for the scrip at the upper end of the price band. Further, it is also important to highlight that all the trades of these Noticees contributed to positive LTP on the days when they sold the shares. The trades carried out these 22 Noticees are tabulated below:

1) PUSPAL CHANDRA

Order Order time Order No. Client name Sell sell pending LTP Shareholdi date sell order orde buy order vari ng before rate( r qty at this atio the sell Rs.) price n order 06/11/20 15:07:20.2455 120000190 PUSPAL 132.8 5 6000 2.6 145 13 70 04929 CHANDRA 11/11/20 14:43:15.0339 220000240 PUSPAL 138 4 2200 2.75 140 13 58 13535 CHANDRA 02/12/20 14:52:50.7339 150000240 PUSPAL 185.4 2 3200 3.6 136 13 42 11733 CHANDRA 5 09/12/20 14:50:17.0212 180000650 PUSPAL 199.9 4 6575 -0.7 129 13 28 14518 CHANDRA 5 10/12/20 14:08:36.6867 140000220 PUSPAL 203.9 2 6725 3.95 125 13 82 11439 CHANDRA 06/01/20 14:45:37.6826 120001050 PUSPAL 285.0 5 1220 5.55 123 14 64 09616 CHANDRA 5 08/01/20 14:58:50.4058 220000190 PUSPAL 296.5 5 1651 5.8 118 14 21 05872 CHANDRA 5

10/01/20 14:53:10.4097 150000190 PUSPAL 308.4 6 1100 6 113 14 83 11446 CHANDRA 5 13/01/20 15:00:38.3535 120001083 PUSPAL 314.6 5 550 6.15 107 14 29 91226 CHANDRA 17/01/20 15:24:31.2553 120001053 PUSPAL 333.7 6 2135 6.5 102 14 86 94872 CHANDRA 5

2) SANJOY KUMAR CHANDRA

Order Order time Order No. Client name Sell sell pending LTP Shareholdi date sell order orde buy order vari ng before rate( r qty at this atio the sell Rs.) price n order 05/11/20 14:48:06.6899 120000190 SANJOY 130.2 4 3250 2.55 50 13 36 12079 KUMAR CHANDRA 07/11/20 15:11:23.3369 160000300 SANJOY 135.4 2 700 2.65 46 13 71 03893 KUMAR 5 CHANDRA 12/11/20 14:55:01.1893 180000330 SANJOY 143.7 4 5050 2.8 44 13 37 07924 KUMAR CHANDRA 04/12/20 14:40:26.7896 210000280 SANJOY 192.9 2 6625 3.75 40 13 42 16318 KUMAR CHANDRA 06/12/20 14:59:09.0216 200000280 SANJOY 200.6 2 5225 3.9 38 13 51 13102 KUMAR 5 CHANDRA 11/12/20 14:54:22.9168 190000310 SANJOY 207.9 4 2500 4.05 36 13 36 10073 KUMAR 5 CHANDRA 07/01/20 14:48:15.8984 170000220 SANJOY 290.7 6 250 5.7 32 14 71 08527 KUMAR 5 CHANDRA 15/01/20 15:04:11.2687 120001402 SANJOY 320.8 8 1345 6.25 26 14 14 13763 KUMAR 5 CHANDRA

3) PRAKASH MULJI VORA

Order Order time Order Client name Sell sell pending LTP Shareholdi date No. sell order orde buy order vari ng before rate( r qty at this atio the sell Rs.) price n order 08/10/20 11:56:09.6465 2200002 PRAKASH 89.7 7 4820 1.75 50 13 16 4007988 MULJI VORA 03/11/20 18:42:16.4407 1300002 PRAKASH 127.6 2 1500 2.5 43 13 63 1000581 MULJI VORA 5 12/12/20 13:53:54.4651 1800003 PRAKASH 212.1 6 2200 4.15 41 13 01 3010362 MULJI VORA 03/01/20 13:42:30.3403 1400002 PRAKASH 279.5 2 1550 5.45 35 14 72 2007536 MULJI VORA 07/02/20 14:24:03.6837 1100008 PRAKASH 448.8 9 105 8.8 33 14 10 7700861 MULJI VORA

4) SUBHASH GANGAPRASAD GUPTA

Order Order time Order No. Client name Sell sell pendi LTP Sharehold date sell order ord ng variati ing before rate(R er buy on the sell s.) qty order order at this price 29/10/20 10:52:41.421 12000019004 SUBHASH 117.95 4 7350 2.3 50 13 604 100 GANGAPRA SAD GUPTA 27/11/20 13:35:16.662 21000028012 SUBHASH 174.85 6 5100 3.4 46 13 945 909 GANGAPRA SAD GUPTA 01/01/20 10:43:09.109 13000106004 SUBHASH 268.7 9 1400 5.25 40 14 227 791 GANGAPRA SAD GUPTA 31/01/20 12:51:23.122 11000087210 SUBHASH 406.6 7 357 7.95 31 14 235 789 GANGAPRA SAD GUPTA

5) MITAL DHIRAJLAL SHAH

Order Order time Order No. Client Sell sell pendi LTP Shareholdi date name sell order ord ng buy variati ng before rate(R er order on the sell s.) qty at this order price 07/10/20 10:01:04.892 19000031001 MITAL 87.95 5 5600 1.7 50 13 725 654 DHIRAJL AL SHAH 22/10/20 09:44:07.740 13000099000 MITAL 106.95 5 8600 2.05 45 13 893 990 DHIRAJL AL SHAH 01/11/20 13:00:11.468 16000031003 MITAL 125.15 7 5600 2.45 40 13 566 395 DHIRAJL AL SHAH 19/12/20 14:38:11.212 19000032022 MITAL 234.05 3 1050 4.55 33 13 549 712 DHIRAJL AL SHAH 28/01/20 12:33:57.754 14000121206 MITAL 383.2 4 750 7.5 30 14 576 638 DHIRAJL AL SHAH

6) AMIT MAHENDRA VYAS

Order Order time Order No. Client Sell sell pendi LTP Shareholdi date name sell order ord ng buy variati ng before rate(R er order on the sell s.) qty at this order price 25/10/20 13:00:19.492 19000031003 AMIT 113.4 4 2900 2.2 50 13 176 595 MAHEND RA VYAS 29/11/20 12:44:01.265 18000033006 AMIT 181.85 6 7125 3.55 46 13 952 920 MAHEND RA VYAS 20/12/20 11:51:07.453 19000129007 AMIT 238.7 4 1550 4.65 42 13 144 309 MAHEND RA VYAS 29/01/20 14:57:31.140 17000122514 AMIT 390.85 3 1048 7.65 38 14 653 212 MAHEND RA VYAS

7) MINA CHANDRA

Order Order time Order No. Client Sell sell pendin LTP Shareholdi date name order orde g buy variati ng before sell rate(R r qty order on the sell s.) at this order price 08/11/20 15:01:37.860 11000021011 MINA 138.15 4 2300 2.7 100 13 581 694 CHAND RA 03/12/20 14:39:07.144 11000021007 MINA 189.15 4 7125 3.7 91 13 003 628 CHAND RA 05/12/20 14:44:25.093 19000153007 MINA 196.75 4 6150 3.85 91 13 356 486 CHAND RA 16/01/20 15:17:05.398 19000128304 MINA 327.25 6 1575 6.4 73 14 579 610 CHAND RA 10/02/20 14:46:41.382 16000115125 MINA 457.75 8 145 8.95 17 14 643 533 CHAND RA

8) RAMJIKARSAN HIRANI

Order Order time Order No. Client name sell Sell sell pendi LTP Sharehol date order ord ng variati ding rate(R er buy on before the s.) qty order sell order at this price 18/11/2 10:51:14.23 1200002000 RAMJIKARSANH 152.4 5 5000 2.95 50 013 2411 4064 IRANI 23/12/2 11:09:46.19 2000011100 RAMJIKARSANH 243.45 5 1250 4.75 45 013 4936 1734 IRANI 06/02/2 11:42:34.21 2300006119 RAMJIKARSANH 440 4 300 8.6 40 014 9791 8155 IRANI

9) SANJAYKUMAR SUKHDEVARAM MAHARSHI

Order Order time Order Client name sell Sell sell pending LTP Shareholdi date No. orde ord buy vari ng before r er order at atio the sell rate( qty this n order Rs.) price 14/11/20 10:54:08.469 1400002 SANJAYKUMAR 149. 3 6000 2.9 50 13 262 2006429 SUKHDEVARAM 45 MAHARSHI 24/12/20 12:32:44.211 1700002 SANJAYKUMAR 248. 7 1300 4.85 47 13 752 5004573 SUKHDEVARAM 3 MAHARSHI 27/01/20 14:25:49.378 1100005 SANJAYKUMAR 375. 6 1350 7.35 40 14 233 7562068 SUKHDEVARAM 7 MAHARSHI

10) SHILPA MAHESHWARI

Order Order time Order No. Client name Sell sell pending LTP Shareholdi date sell orde ord buy vari ng before r er order at atio the sell rate( qty this price n order Rs.) 24/10/20 12:51:36.224 17000026 SHILPA 111.2 6 6300 2.15 50 13 601 005724 MAHESHWARI 17/12/20 11:58:45.996 11000021 SHILPA 225 7 2100 4.4 44 13 419 003665 MAHESHWARI 24/01/20 14:17:36.271 16000108 SHILPA 368.3 5 1100 7.2 37 14 113 064484 MAHESHWARI 5 04/02/20 13:36:25.457 14000127 SHILPA 422.9 6 800 8.25 32 14 993 709480 MAHESHWARI 5

11) YOGESH SHARMA

Order Order time Order No. Client Sell sell pending LTP Shareholdi date name sell order orde buy variat ng before rate( r qty order at ion the sell Rs.) this price order 21/10/20 14:57:46.4132 2300002001 YOGESH 104.9 7 7500 2.05 50 13 29 6475 SHARMA 22/11/20 12:30:30.3247 1600002900 YOGESH 164.8 3 5300 3.2 43 13 91 5537 SHARMA 5

18/12/20 10:32:29.5350 1400002200 YOGESH 229.5 5 2100 4.5 40 13 92 3167 SHARMA 30/01/20 12:24:08.6715 1200011125 YOGESH 398.6 2 200 7.8 35 14 17 9435 SHARMA 5

12) HEMANT VASANT LIMBACHIA

Order Order time Order Client name Sell sell pending LTP Shareholdi date No. sell order orde buy order vari ng before rate( r qty at this atio the sell Rs.) price n order 18/10/20 14:33:46.2981 17000025 HEMANT 102.8 6 6300 2 50 13 85 015208 VASANT 5 LIMBACHIA 21/11/20 10:50:54.5665 13000098 HEMANT 161.6 5 825 3.15 44 13 20 003287 VASANT 5 LIMBACHIA 13/12/20 12:09:44.9199 13000109 HEMANT 216.3 4 2100 4.2 39 13 49 012687 VASANT LIMBACHIA 23/01/20 14:09:55.2438 14000080 HEMANT 361.1 5 700 7.05 35 14 13 291713 VASANT 5 LIMBACHIA

13) BHARAT VASANTLAL THAKKER

Order Order time Order No. Client name Sell sell pending LTP Shareholdi date sell orde orde buy order vari ng before r r qty at this atio the sell rate( price n order Rs.) 01/10/20 09:42:27.1809 140000220 BHARAT 78.2 5 5500 3.7 50 13 16 01193 VASANTLAL 5 THAKKER 31/10/20 14:33:15.0757 210000280 BHARAT 122. 6 3000 2.4 45 13 55 07042 VASANTLAL 7 THAKKER 20/11/20 14:02:09.9072 150000240 BHARAT 158. 4 3050 3.1 39 13 95 10715 VASANTLAL 5 THAKKER 21/01/20 12:58:36.0158 140001321 BHARAT 347. 3 925 6.8 35 14 67 96577 VASANTLAL 2 THAKKER

14) SHREECHAND GULABCHAND SARDA Order Order time Order No. Client name sell Sell sell pending LTP Shareholdi date orde ord buy vari ng before r er order at atio the sell rate( qty this price n order Rs.) 04/10/20 10:35:26.671 17000025 SHREECHAND 86.2 6 4100 4.1 50 13 069 001807 GULABCHAND 5 SARDA 16/12/20 11:41:45.412 13000209 SHREECHAND 220. 6 1200 4.3 44 13 169 005163 GULABCHAND 6 SARDA 22/01/20 12:23:12.230 11000088 SHREECHAND 354. 7 505 6.9 38 14 677 476184 GULABCHAND 1 SARDA

15) RAJESH KUMAR MAHESHWARI HUF Order Order time Order No. Client name Sell sell pending LTP Shareholdi date sell orde ord buy vari ng before r er order at atio the sell rate( qty this price n order Rs.) 26/12/20 13:51:44.120 21000027012 RAJESH 253.2 6 1400 4.95 50 13 725 236 KUMAR 5 MAHESHW ARI HUF 03/02/20 12:57:25.943 13000099153 RAJESH 414.7 5 295 8.1 44 14 093 267 KUMAR MAHESHW ARI HUF

16) AMOL SHREECHAND SARDA

Order Order time Order No. Client name Sell sell pending LTP Shareholdi date sell orde ord buy vari ng before r er order at atio the sell rate( qty this price n order Rs.) 03/10/20 10:53:42.660 15000024001 AMOL 82.1 4 3000 3.9 50 13 954 644 SHREECHA 5 ND SARDA

05/02/20 14:40:17.312 14000120267 AMOL 431. 8 800 8.45 46 14 386 803 SHREECHA 4 ND SARDA

17) PARUL SOMANI

Order Order time Order No. Client Sell sell pending LTP Shareholdi date name sell order orde buy variat ng before rate( r qty order at ion the sell Rs.) this price order 28/10/20 12:07:51.1491 1800003300 PARUL 115.6 5 7850 2.25 50 13 78 5319 SOMANI 5 26/11/20 12:56:49.4010 1600003100 PARUL 171.4 5 5125 3.35 45 13 56 3167 SOMANI 5 02/01/20 11:08:29.3599 1600012000 PARUL 274.0 5 1650 5.35 40 14 24 1958 SOMANI 5

18) DILIP KHATRI Order Order time Order No. Client Sell sell pending LTP Shareholdi date name sell order orde buy order varia ng before rate( r qty at this tion the sell Rs.) price order 23/10/201 12:59:34.4393 13000021 DILIP 109.0 6 7900 2.1 50 3 65 010215 KHATRI 5 25/11/201 12:06:44.6200 15000024 DILIP 168.1 4 6025 3.25 44 3 88 005367 KHATRI 31/12/201 11:44:03.4599 23000022 DILIP 263.4 3 1908 5.15 40 3 87 003508 KHATRI 5

19) VANDANA SHANKAR MAGAR

Order Order time Order No. Client name Sell sell pending LTP Shareholdi date sell orde orde buy order vari ng before r r qty at this atio the sell rate( price n order Rs.) 24/09/20 12:07:18.1497 150000240 VANDANA 61.4 5 5888 2.9 50 13 76 03811 SHANKAR MAGAR 30/10/20 10:09:07.0505 170001210 VANDANA 120. 5 6800 2.3 45 13 44 00957 SHANKAR 3 5 MAGAR

30/12/20 15:03:03.7283 160001190 VANDANA 258. 8 1450 5.0 40 13 59 06919 SHANKAR 3 5 MAGAR

20) KAVSHALYADEVI GULABCHAND SARDA

Order Order time Order No. Client name sell Sell sell pending LTP Sharehol date orde orde buy varia ding r r qty order at tion before rate( this price the sell Rs.) order 27/09/20 11:04:54.7070 190000330 KAVSHALYADEVI 71 4 4600 3.35 50 13 43 04967 GULABCHAND SARDA 28/11/20 13:38:51.4460 160000290 KAVSHALYADEVI 178. 4 2150 3.45 46 13 59 08199 GULABCHAND 3 SARDA

21) NILESH TUKARAM GHADSHI

Order Order time Order No. Client name Sell sell pending LTP Shareholdi date sell order orde buy order vari ng before rate( r qty at this atio the sell Rs.) price n order 25/09/20 12:36:37.3555 190001290 NILESH 64.45 4 3700 3.05 50 13 93 03615 TUKARAM GHADSHI 13/11/20 10:42:39.4558 170000260 NILESH 146.5 5 5150 2.85 46 13 03 03560 TUKARAM 5 GHADSHI

22) DILIP KUMAR MANDAL

Order Order time Order No. Client name Sell sell pending LTP Shareholdi date sell order orde buy order vari ng before rate( r qty at this atio the sell Rs.) price n order 31/01/201 14:02:37.5088 18000151 DILIP 5.71 2 15950 0.2 100 3 61 182725 KUMAR 7 MANDAL 05/02/201 15:19:29.9570 12000074 DILIP 6.28 2 22600 0.2 98 3 00 145913 KUMAR 9 MANDAL

07/02/201 15:25:10.0000 11000061 DILIP 6.91 2 29500 0.3 96 3 58 212830 KUMAR 2 MANDAL 13/02/201 15:13:05.3108 14000150 DILIP 7.99 2 16400 0.3 94 3 26 334109 KUMAR 8 MANDAL 15/02/201 15:16:12.2875 11000060 DILIP 8.38 2 15700 0.3 92 3 74 165848 KUMAR 9 MANDAL 19/02/201 15:28:46.1678 17000091 DILIP 9.22 2 15500 0.4 90 3 43 275548 KUMAR 3 MANDAL 22/02/201 15:28:44.1902 17000092 DILIP 10.16 2 14800 0.4 88 3 33 306569 KUMAR 8 MANDAL 26/02/201 15:20:45.2425 13000069 DILIP 11.19 2 18800 0.5 86 3 38 363991 KUMAR 3 MANDAL 01/03/201 15:24:51.9134 11000061 DILIP 11.74 2 20200 0.5 84 3 99 185574 KUMAR 5 MANDAL 05/03/201 15:29:28.4924 16000092 DILIP 12.32 2 16598 0.5 82 3 51 285745 KUMAR 8 MANDAL 07/03/201 15:20:20.0699 12000073 DILIP 13.57 2 12198 0.6 80 3 33 179716 KUMAR 4 MANDAL 13/03/201 14:44:44.8042 17000092 DILIP 14.52 4 16548 0.2 78 3 99 172520 KUMAR 8 MANDAL 14/03/201 15:27:43.6399 14000129 DILIP 14.81 2 18150 0.2 74 3 82 135830 KUMAR 9 MANDAL 21/03/201 15:18:11.6687 19000137 DILIP 15.4 2 20650 0.3 72 3 64 019378 KUMAR MANDAL 25/03/201 14:41:07.0811 12000113 DILIP 15.7 2 16400 0.3 70 3 29 452638 KUMAR MANDAL 28/03/201 15:29:57.3869 12000070 DILIP 16.33 2 14400 0.3 68 3 96 502456 KUMAR 2 MANDAL

02/04/201 15:16:11.0928 20000027 DILIP 16.95 4 13400 0.3 66 3 04 077052 KUMAR MANDAL 04/04/201 15:06:01.7490 15000100 DILIP 17.25 4 8400 0.3 62 3 00 037007 KUMAR MANDAL 08/04/201 14:55:52.0410 13000021 DILIP 17.9 2 3700 0.3 58 3 77 013450 KUMAR 5 MANDAL 11/04/201 14:09:12.2073 21000040 DILIP 18.6 4 6700 0.3 56 3 69 005433 KUMAR 5 MANDAL 16/04/201 14:47:38.2709 20000028 DILIP 19.3 2 11500 0.3 52 3 78 005647 KUMAR 5 MANDAL 18/04/201 15:06:20.8426 13000101 DILIP 20 5 11200 0.3 50 3 29 004261 KUMAR 5 MANDAL 23/04/201 14:44:59.8671 20000027 DILIP 20.8 4 11200 0.4 45 3 44 005570 KUMAR MANDAL 26/04/201 15:05:46.3671 21000027 DILIP 21.6 4 11700 0.4 41 3 05 005409 KUMAR MANDAL 30/04/201 14:45:51.6043 13000099 DILIP 22.4 4 6000 0.4 37 3 21 003589 KUMAR MANDAL 11/05/201 12:12:28.2829 12000019 DILIP 24.65 4 11600 1.1 33 3 80 000904 KUMAR 5 MANDAL 14/05/201 15:08:13.9241 15000101 DILIP 27.1 4 16900 1.2 29 3 32 005097 KUMAR 5 MANDAL 17/05/201 12:56:18.9678 13000023 DILIP 31.3 4 13600 1.4 25 3 75 002298 KUMAR 5 MANDAL 21/05/201 15:02:59.9160 18000033 DILIP 34.45 2 16000 1.6 21 3 40 003580 KUMAR MANDAL 23/05/201 14:46:56.4668 19000160 DILIP 37.95 2 15000 1.8 19 3 11 007046 KUMAR MANDAL

27/05/201 14:45:33.7437 15000028 DILIP 41.75 2 10500 1.9 17 3 74 004126 KUMAR 5 MANDAL 11/09/201 14:39:57.2567 23000046 DILIP 45.95 2 3690 2.1 15 3 67 005657 KUMAR 5 MANDAL 13/09/201 11:39:15.3987 16000028 DILIP 48.2 2 5710 2.2 13 3 04 002924 KUMAR 5 MANDAL 18/09/201 11:37:29.2822 21000108 DILIP 53.1 2 26550 2.5 11 3 04 003276 KUMAR MANDAL 20/09/201 13:41:20.7873 19000032 DILIP 55.75 2 3700 2.6 9 3 50 003620 KUMAR 5 MANDAL 10/10/201 14:10:25.7728 14000021 DILIP 93.25 2 3800 1.8 7 3 88 006344 KUMAR MANDAL 14/10/201 13:38:57.5964 13000021 DILIP 97 2 6600 1.9 5 3 82 003872 KUMAR MANDAL 17/10/201 13:51:16.1847 22000026 DILIP 100.8 1 5400 1.9 3 3 86 003644 KUMAR 5 5 MANDAL

39. As can be seen from the above tables, all the trades of these 22 seller Noticees were for smaller quantities (less than 10) and on all the instances noted above, the sum of buy quantity pending at the time of order placement by them, was substantially more than what they sold and also what they were holding at that point of time. Another point which emerges from a perusal of the above transactions of the Noticees is that the orders were placed by the 22 Noticees on separate days and they never overlapped. Further, majority of the orders were placed by these Noticees at the circuit price in the second half of the trading day (i.e. after 12 noon).

40. In the above factual backdrop, before proceeding further with the consideration of the submissions made by the Noticees, I find it important to refer to the provisions of law which, as alleged in the SCN, have been violated by the Noticees. The text of the said provisions of the PFUTP Regulations is quoted as under:

3. Prohibition of certain dealings in securities:

No person shall directly or indirectly— (a) buy, sell or otherwise deal in securities in a fraudulent manner;

(b) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed in a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of the Act or the rules or the regulations made there under;

(c) employ any device, scheme or artifice to defraud in connection with dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange;

(d) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person in connection with any dealing in or issue of securities which are listed or proposed to be listed on a recognized stock exchange in contravention of the provisions of the Act or the rules and the regulations made there under.

4. Prohibition of manipulative, fraudulent and unfair trade practices:

(1) Without prejudice to the provisions of regulation 3, no person shall indulge in a fraudulent or an unfair trade practice in securities.

(2) Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves fraud and may include all or any of the following, namely:— (a) indulging in an act which creates false or misleading appearance of trading in the securities market;

(e) any act or omission amounting to manipulation of the price of a security;

41. One of the Noticees namely, Yogesh Sharma has submitted that he did not purchase shares in the off-market form Mr. Rajendra Kothari as has been noted in the SCN. In this regard, I note that Mr. Sharma has not submitted any material forming the basis of his denial nor has he submitted any details regarding the person who sold the shares to him. Nonetheless, the material available on SEBI’s records shows that Mr. Sharma had in fact purchased shares from Mr. Rajendra Kothari through an off-market transaction on October 3, 2013. I, therefore, find that the above submission of Mr. Sharma is without any basis and cannot be accepted.

42. A common submission that has been made by all the Noticees (who have filed their response) in the present matter is that their transactions mentioned in the SCN are independent and that they are not connected to other Noticees in any manner (except for the admitted family relationships). In this regard, it is important to mention that connection / relationship amongst entities may not always be direct, and the circumstances and conduct of the Noticees may determine the connection amongst them. In the present case, I find it pertinent to highlight the following facts which indicate that the 26 Noticees were in fact connected to each other:

42.1. All the Noticees who sold the shares of PSIT during the price rise period (i.e. Noticees no. 1 to 22) bought shares through off-market transactions from the same transferors (Noticees no. 23 to 26) over a short period of time; 42.2. The 4 transferors distributed the shares of PSIT to 22 entities in minute numbers of 50 or 100 even when the consideration price was meagre (ranging around Rs. 2,900 to Rs. 7,000); 42.3. 3 out of the 4 transferors i.e. Rajendra, Saroj Devi and Nishant Kothari belonged to one family. Likewise, Puspal, Mina and Sanjoy Chandra belonged to one family, Shilpa and Rajesh Maheshwari belonged to one family and Shreechand, Amol and Kavshalya devi Sarda belonged to one family;

42.4. 2 transferors (i.e. Raj Kumar Sharma and Rajendra Kothari) transferred the shares of PSIT in off-market to one Noticee (Puspal Chandra) on one day i.e. 10/10/2013. 42.5. The shares were sold by the transferors off-market even though the shares of PSIT were listed, there was substantial demand for them on the stock exchange and the market price thereof was around the same price at which the off-market transactions took place; 42.6. None of these 4 transferors have submitted any explanation as to how they met the transferees before they sold shares to them through off-market transactions; 42.7. The off market transfer of shares to all the seller Noticees (Noticees no. 1 to 22) from the transferor Noticees (Noticees no 23 to 26) took place at around the same point of time i.e. September - October 2013 except in case of Dilip Kumar Mandal, who bought shares in January 2013; 42.8. Pursuant to their purchases, majority of Noticees 1 to 22 began to sell their shares in the market within a month of off-market share transfer, except Noticees no. 7, 12, 15 and 18 who began to sell shares within 1-2 months from the date of receipt of shares and Noticee no. 16 who began to sell shares after three months from the date of receipt thereof; 42.9. All of the seller Noticees sold shares in miniscule quantities (quantity always being under 10 shares); 42.10. Whenever, these sellers sold their shares in miniscule quantities, there were a huge demand on the buy side for the shares of PSIT; 42.11. The 22 sellers sold shares turn by turn in the market i.e. From January 31, 2013 to February 10, 2014 i.e. when these 22 sellers sold their shares, their sell trades never overlapped. 42.12. All of them sold the shares at the circuit price in every trade. 42.13. Collectively, they were able to pump up the price of the scrip of PSIT, which lacked any fundamentals to support the steep price rise that it witnessed.

43. It will be too much of a coincidence when so many entities behave in a coordinated manner and exhibit similar trading pattern and the same causes exponential rise in the price of a scrip which had no fundamentals. At this point, I find it important to address a contention of the Noticees that the transactions mentioned in the SCN were done by them in ordinary course of business and were not intended at any kind of manipulation as alleged. A careful perusal of the replies and written submissions of the Noticees revealed that none of the Noticees has provided any material or plausible justification to show his ordinary course of business. For instance, the transferors (Noticees no. 23 to 26) have not submitted anything to show that they were regularly transferring shares of companies in off-market to entities with whom they claim to be unconnected. Also, the seller Noticees (No. 1 to 22) have not submitted any material explaining their historical trading pattern to suggest that they used to routinely buy shares in off-market and sell them on the stock exchange in small quantities at circuit price. As has been discussed in earlier paragraphs, the behavior / conduct of the Noticees in the present case was peculiar and was in no manner analogous to the trading behavior of a regular investor in the securities market. Considering the above, the preponderance of probability leads us to the conclusion that all these 26 Noticees were connected to each other and acted under a premeditated scheme where under the transferors transferred the shares through off-market transactions in a distributed manner and within a few weeks of the receipt of shares, the transferees started selling shares in miniscule quantities turn by turn in such a manner so as to raise the LTP of the scrip to the maximum limit possible with every trade thereby causing steep rise in the price of the scrip over a short duration.

44. It is pertinent to note that at the time of order placement, the seller Noticees were holding significantly more number of shares than what they sold. In this context, a common argument has been advanced by the 22 seller Noticees that sale of shares in small quantities is not illegal and in the present case, the same was not intended at manipulating the price of the scrip but was done only for optimizing / maximising the returns on their investments. In this regard, it needs to be pointed out that under normal circumstances, trading of the nature carried out by the said Noticees may not be considered as manipulative. But in the present case, the circumstances were peculiar. To illustrate, 44.1. PSIT was a scrip which was suspended for trading for around 8 years May 19, 2004 to February 9, 2012

44.2. It had no track record of performance which would justify a steep price rise from Rs. 50 to Rs. 466.9;

44.3. The 22 sellers received shares of PSIT in off-market from the same 4 transferors over a short period of time;

44.4. The average daily volume in the scrip, during the period when the 22 Noticees traded, was meagre and was only there because of the sale of shares by the Noticees;

44.5. During the price rise period (i.e. when the 22 Noticees traded), trades happened on 162 trading days. On 155 out of 162 such trading days, only 1 trade per day was carried out. On all such days having 1 trade per day, the trades happened at highest possible price i.e. circuit price;

44.6. All the trades of the Noticees were executed well after the market opening hours, majority of them in the second half of the trading day (i.e. after 12 noon).

45. It is noted from the trade details of the Noticees no. 1 to 22 that every time they had placed sell orders, there were relatively huge number of buy orders seeking huge quantities. A reasonable man, being in the position of the Noticees holding shares of a scrip like PSIT, would sell his entire or substantial shareholding when he is getting a price in multiples of his purchase price and there are buyers willing to buy the same. Contrary to that, Noticees no. 1 to 22 in the present case, as noted in the above tables, had entered into only single trades for miniscule quantities (less than 10 shares) on several days with each trade establishing a new high price.

46. A related contention made by the seller Noticees is that since the price was witnessing a bullish trend, the Noticees had the perception that the price will continue to rise in future and hence they just sold small quantity of shares in order to make profits. In this regard, I have examined the particulars especially relating to the purchase of shares by Noticees no. 1 to 22, the price and time of the said purchase and the selling pattern of these Noticees. Considering the same, I do not find merit in the above submissions of the Noticees on the following grounds:

46.1. If the Noticees were positive about the bullish trend in the scrip of PSIT, they should have waited for the price of the scrip to attain a level at which selling the shares would fetch them the maximum return. Instead, they chose to sell in miniscule quantities on several dates when the price of the scrip was witnessing an upward trend. 46.2. In fact, almost all of these 22 Noticees started selling shares in the market within 1 month of their purchase from Noticees no. 23 to 26 (through off-market transactions from the same 4 transferors); 46.3. It is worth mentioning that the upward movement in the price of the scrip of PSIT so anticipated by Noticees no. 1 to 22 could not have been possible without the LTP contribution of Noticees no. 1 to 22, contributed through their sell trades on different dates because they were the only sellers in the market on those dates.

47. It has also been contended by the seller Noticees that their sell orders were based on the buy orders pending in the system and that they sold only at the buy order rate pending in the system. In this regard, it is relevant to reiterate that at the time of placement of sell orders by all these 22 seller Noticees, there was a relatively substantial demand on the buy side signifying that the buyers were willing to buy the shares of PSIT at highest possible prices. This buying interest of the buyers was essentially a response to the artificial pumping of price by the 22 seller Noticees who controlled the supply of shares and sold the shares turn by turn always in miniscule quantities (being less than 10) at circuit price thereby fixing a new high price every day. It is noted from the transaction details of the 22 Noticees that all of their trades were executed well after the market opening hours, majority of them in the second half of the trading day (i.e. after 12 noon). The fact that the Noticees’ trades were the only sell trades on almost all the trading days when they sold, indicates that the sellers waited for the buying interest in the shares of PSIT to reach the highest point (i.e. circuit price) and then placed the matching sell orders. It is pertinent to highlight here that the sell trades of the 22 Noticees never overlapped during the price rise period, and but for the solitary sell orders of the Noticees, the price rise would not have been there and consequently, the buyers would not have responded to the artificial price rise. Considering the above, I do not find any merit in the submission of the Noticees in this regard.

48. In consideration of the foregoing, I find that the trading behaviour of the Noticees no. 1 to 22 was not genuine even if viewed at an individual level. Even more so, because in the present case, these 22 Noticees have acted under a larger scheme in tandem with each other and the 4 off-market transferors (Noticees No. 23 to 26) as has been discussed in above paragraphs.

49. Additionally, it has been contended by the seller Noticees that the allegation against sellers for contribution to LTP collapses since no connection of the sellers has been established with the buyers and since no action has been taken against the buyers as they placed the buy orders first at a price higher than the LTP. Apart from the above, two of the Noticees in their recent submissions have relied upon the order of Hon’ble SAT in the matter of Nishith M. Shah HUF v. SEBI to support their contention that establishing a connection between the buyer and seller is a sine qua non for establishing price manipulation. In this regard, it is relevant to mention that while in a conventional case of synchronized or circular trading, in order to establish price manipulation, establishing the connection between the buyer and seller may be essential, but there can be instances wherein a buyer or a seller alone can manipulate the price or volume of a scrip. In my view, the overall scheme of PFUTP Regulations envisages unilateral commission of fraud by a person. The definition of fraud under regulation 2(1)(c) lists out various acts / omissions by a person such as known misrepresentation, active concealment, reckless and careless representation, deceptive behavior, false statement, etc. which do not presuppose the connection of the person committing the same with another.

Further, regulations 3 and 4 of the PFUTP Regulations also use phrases such as no person shall use or employ, no person shall indulge, etc. and do not at all places stipulate the requirement of a connection between two parties to a transaction in order to establish a violation. Further, the prohibition of fraudulent dealing in securities includes an act of fraudulent buying or selling. It may be noted that the unilateral act of fraudulent buying or selling is also included in the definition of fraud under PFUTP Regulations. There can be instances where artificial demand and price rise can be created choosing to buy/sell unilaterally without any collusion with the counterparties. Therefore, the Regulations make it clear that unilaterally, by virtue of fraudulent selling, a person can manipulate the price of a security. In this context, I find it important to mention that the order passed by Hon’ble SAT in the matter of Nishith Shah has to be viewed in light of other orders passed by Hon’ble SAT in relation to cases involving violations by sellers on account of miniscule trading in shares.

The relevant portions of these orders are quoted below:

49.1. Jayprakash Bohra v. SEBI (order dated November 05, 2019):

“… The modus operendi, according to the learned counsel, is to revive, on paper, a dormant listed company with very little share capital; go for a preferential allotment and by trading in very small number of shares at inflated prices or far away prices from LTP between the group entities to show considerable activity of trading in the scrip and thereby induce the retail/other investors and thereby provide an exit route to the group entities, including the preferential allottees. All these symptoms are present in this matter. … The submission that all the holdings of the appellant are in normal course of business has no merit as the entire issue in the matter is not normal course of business….Moreover, out of 1,050 shares of Gromo obtained off-market in an inexplicable way by the appellant more than half of it was sold in small tranches; most of the time placing sell order at far away prices than LTP. The said trading pattern and the other connections as explained above is sufficient enough to prove that the appellant was part of the group that created the artifice/scheme and therefore finding in the impugned order that the appellant has violated the stated provisions of the PFUTP Regulations cannot be faulted.”

49.2. Giriraj Kumar Gupta HUF v. SEBI (Order dated February 25, 2020):

“Having heard the learned counsel for the parties, we are of the considered view that the impugned transactions, in the facts and circumstances of the matter, would fall in the realm of violations of PFUTP Regulations. Individual argument that each entity’s trade is miniscule and only on a few days alone etc. is not sufficient to rebut the findings in the impugned order. The appellants have not given the details of their off-market transactions with an entity which is also found to be part of the group which manipulated the scrip of RMCL. The unwillingness of the appellants in giving the details of those off-market transactions and in turn placing buy orders above LTP in the market subsequently cannot be viewed in isolation. The argument submitted by the learned counsel for the appellants that no further connection has been established therefore has no merit in the totality of the facts and circumstances of the case. In such matters, the preponderance of probability based on the totality of circumstances, as held by the Apex Court in the matter of Kishore R. Ajmera (2016) 6 SCC 368 squarely applies. The orders in Jayprakash Bohra (Supra) and Shri Lakhi Prasad Kheradi (Supra) also apply the same ratio.”

49.3. Mrs. Kalpana Dharmesh Chheda v. SEBI (Order dated February 25, 2020):

“5. The crux of the charge against the appellants is, that the appellants have placed sell orders in single shares or in very small quantities at higher and higher price on 55 days during the relevant period thereby contributed to a total of Rs. 320.45 to market positive LTP through 52 trades. Therefore, it has been held that appellants’ trade had been of a market manipulative nature and therefore appellants have violated the stated provisions of the PFUTP Regulations, 2003. … 9. We do not find much merit in the submissions made by the learned counsel for the appellants though generally it can be stated that selling at a price higher than the LTP particularly when buy orders are available in the system cannot be considered as manipulative in itself. However, looking at the pattern of trading done by the appellants and the fact that the appellants have derived considerable financial benefit through that particular scheme or nature of trading we are of the view that the trading pattern adopted by the appellants is of a manipulative and unfair nature and would squarely fall within the ambit of the PFUTP Regulations. The pattern of trade clearly establishes this as it is on 49 occasions that the appellants sold 1 to 5 shares, mostly one share, when in fact the buy orders available in the system was much higher. This behaviour cannot be justified in terms of normal rational expectations of a seller. It is on record that the appellants were among the top two net sellers during the relevant period. Therefore, when the appellants were holding a large number of shares (Appellant No. 1 – 15045 shares and Appellant No. 2 – 1009 shares), their selling miniscule quantity of one share each on more than four dozen occasions is nothing but a strategy of manipulation and unfairly benefiting by off-loading the entire shareholding after raising the price to considerable levels. The Appellant No. 1 was able to sell off 7000 shares on 17th, 18th, and 19th February, 2014 at prices ranging from 182.45 to 189.75. Similarly, on 21st, 24th and 25th March, 2014 the appellants together sold 10174 shares at prices in the range of 226.05 to 249.20.”

50. Having perused the above judgments of Hon’ble SAT, I am of the view that all the orders passed by Hon’ble SAT quoted in this order in relation to alleged manipulative trading by sellers, have been decided by Hon’ble SAT on the basis of specific facts of each case. A combined reading of the above mentioned orders of Hon’ble SAT indicates that in the opinion of Hon’ble SAT, there is no “single” or “only” test to determine the charge of price manipulation in cases wherein the primary charge is emanating from miniscule trading by the sellers over a period of time at the highest possible price on each day. Thus, while establishing the connection between the buyer and the seller may be one approach for determining price manipulation as has been held in Nishith Shah case, there can also be other approaches as adopted by Hon’ble SAT in the cases of Mrs. Kalpana Dharmesh Chheda, Giriraj Kumar Gupta HUF and Jayprakash Bohra through which price manipulation can be established. I, therefore find that the reliance on the order of Nishith Shah alone in such a manner is misplaced. It is relevant to mention here that in the present case, reliance is being placed on the behaviour of the Noticees and the inter se connection amongst them as discussed in paragraphs 42 and 43 above.

51. Further, as regards the contention of the Noticees that no action has been taken against the buyers who placed the buy orders above LTP and contributed to positive LTP, I find it important to emphasize on the point that in every proceeding, the Noticees are required to present their respective case by rebutting the allegations made qua them in the SCN with supporting evidences. The question whether a particular act or omission is fraudulent or not, needs to be seen in light of the surrounding circumstances. In my view, the preponderance of probability of the surrounding circumstances may lead to the finding that any particular act, such as placing a sell order or buy order, is a fraudulent behavior for manipulating the price or volume. In the present case, as far as the act of placing of sell order is concerned, it needs to be seen in light of the circumstances enumerated in paragraphs 42 and 43 of this order. Even if there is a case for similarly placed entities being treated differently, I find it relevant to quote the following observations of Hon’ble Supreme Court of India in the context of argument of discrimination to claim negative equality in the matter of Union of India and Anr. vs. International Trading Co. and Anr. (AIR 2003 SC 3983) which would be applicable to the facts of the present case:

“… two wrongs do not make one right. A party cannot claim that since something wrong has been done in another case directions should be given for doing another wrong. It would not be setting a wrong right, but would be perpetuating another wrong. In such matters there is no discrimination involved. The concept of equal treatment on the logic of Article 14 of the Constitution of India, 1950 (in short ‘the Constitution’) cannot be pressed into service in such cases. What the concept of equal treatment presupposes is existence of similar legal foothold. It does not countenance, repetition of a wrong action to bring both wrongs on a par. Even if hypothetically it is accepted that a wrong has been committed in some other case by introducing a concept of negative equality the respondents cannot strengthen their case. They have to establish the strength of their case on some other basis and not by claiming negative equality…”

52. In light of the above, I find that the objective of the present proceedings is to examine whether in light of the facts and circumstances mentioned in the SCN and the evidence available on record, the allegations against the Noticees would sustain or not. Hence, the proceedings would not be vitiated merely by the Noticees’ claim that the buyers have not been named in the present proceedings. Further, as noted earlier in the order, the artificial price rise in the scrip of PSIT was caused by the sell orders of the sellers which were placed for minuscule number of shares despite there being substantial buying interest/high demand in the market. The said high demand for the shares of PSIT was a result of the controlled supply of shares by the seller Noticees who executed only one trade per day for less than 10 shares turn by turn at circuit price over a period of several months despite holding more number of shares. In other words, the buyers were responding to the artificially pumped up price of the scrip of PSIT caused by the seller Noticees. Considering the above, I find that the contention of the Noticees in this regard is misplaced and is devoid of any merit.

53. The 4 transferor Noticees namely, Rajendra Kumar Kothari, Nishant Kothari, Saroj Devi Kothari and Raj Kumar Sharma have made a common submission that the off-market transfer of shares by them was done in the ordinary course of business and they were not connected to any other Noticee named in the SCN. They also submitted that after the sale of shares in the off-market, they were not aware about the subsequent sale / transfer by the purchasing entities. It has also been contended that the SCN does not contain anything to show how off-market transfers would lead to violations of PFUTP Regulations. In this regard, it is noted from the transaction receipts submitted by the Noticees that the shares by these 4 Noticees were sold off market to the respective purchasers at a price which was around the then prevailing market price for the shares of PSIT. For example, Saroj Devi Kothari sold shares to Subhash Gupta at Rs. 59. Incidentally, on September 25, 2013 when these shares were transferred in the off market, the market price of the shares of PSIT on the stock exchange was also approximately around the same range of Rs. 59 – 60. Thus, these 4 transferors could have sold the shares on the stock exchange when sufficient buying interest was already present on the stock exchange, which is evident form the details below which have been extracted from the above noted transaction data of Dilip Kumar Mandal: -

Order Order time Sell order rate Sell order qty pending buy date order qty. at this price 25-09-2013 12:36:37.355593 64.45 4 3700 03-10-2013 10:53:42.660954 82.15 4 3000 08-10-2013 11:56:09.646516 89.7 7 4820 10-10-2013 14:10:25.772888 93.25 2 3800

54. Viewing the above details along with the particulars of off-market transfers by Noticees No. 23 to 26 (noted earlier in the order at Table 2), it is noted that all these transferors have transferred shares in off-market on at least one of the above mentioned 4 dates. As the last column of the above table reflects, on all the 4 dates there was a relatively significant demand for the shares of PSIT on the stock exchange, however, these 4 transferors chose to transfer the shares of PSIT off-market to entities with whom they claim to be unconnected. Further, the number of shares transferred to the transferees were also miniscule i.e. 50 each to 19 transferees and 100 each to 3 transferees. The consideration amount for the said transfers was also not significant i.e. in the average range of approx. Rs. 2900 to 7000. It is important to mention that none of these 4 transferees have submitted any explanation as to how they met the transferees who bought shares in off-market. It is a matter of common knowledge that an off-market transfer of shares does not happen between two strangers and it presupposes a level of acquaintance between the buyer and seller. Thus, the submission that the transferees were not known to the transferors holds no merit. Also, no explanation has been offered as to why the shares were distributed / scattered amongst so many transferees particularly when the consideration amount was meagre. In view of the above, the transfer of minuscule number of shares by the Noticees no. 23 to 26 to the transferees - Noticees no 1 to 22 through off-market transactions clearly indicates that the said transfer was done under a pre-designed plan which involved the transferors as well as the transferees as has been discussed in earlier paragraphs. Since all the Noticees were part of a pre-designed plan/scheme, it becomes irrelevant that the transferors knew about the subsequent sale of shares by the transferees or not, as all of them played their pre-determined roles in the plan / scheme and collectively caused the steep rise in the price of the scrip of PSIT.

55. A submission which has been made by the seller Noticees referring to their trades noted in the SCN is that as an individual their alleged trades vis-a-vis the total volume in the scrip of PSIT during the investigation period was exceedingly insignificant to have any kind of impact on either the price or volume of the scrip. With regard to the said contention, I find that if the transactions of the Noticees are viewed independent of each other and without considering the factors discussed in above paragraphs, then the same may appear to be insignificant to have caused any impact on the price or volume of the scrip. However, in the present case, one cannot lose sight of the fact that the trading by the Noticees was done under a premeditated scheme (discussed above) and collectively, their trading was the sole cause of the exponential rise in the price of the scrip of PSIT as has been noted earlier in the order. As noted earlier, the trades of the 22 seller Noticees together contributed Rs. 400.45 to the market positive LTP increase (in 120 trades), which is 86.56% of market positive LTP increase during the price rise period. Further, their contribution to the net LTP increase was Rs. 399.75 which is 95.88% of the net LTP increase during the said period. As regards the submission of minor contribution to the volume, I find it pertinent to refer to the observations of Hon’ble

SAT in the matter of Sanjay Kumar Tayal & Others vs SEBI (Appeal No. 68 of 2013 - order dated February 11, 2014), wherein an entity was found to have raised the New High Price (NHP) by placing just 1 share in buy order, in each of nine transactions, when sell orders were available for higher quantity (contributing to 9.17% of NHP). The Hon’ble SAT while upholding the findings and penalty imposed by the Adjudicating Officer, SEBI, inter alia observed as under:

“ 9… Very fact that the appellant had indulged in self trades/ LTP/ NHP without giving justifiable reason, clearly justifies the inference drawn by the AO that the trades executed by the appellant were manipulative trades. 10 …In the facts of the present case, in our opinion, no fault can be found with the decision of the AO that the trades executed by the appellant were manipulative trades and hence, the appellant was guilty of violating the SEBI Act and the PFUTP Regulations.“

56. Coming back to facts of the present case, the details of LTP contribution by the 22 sellers are as follows:

S. Seller Name Net LTP Positive LTP No. LTP % No. of Trade LTP % No. Trad Differenc LTP trades Quantity Differ LTP of e e (Rs.) differ ence differ tra Qua ence (Rs.) ence des ntity 1 Puspal Chandra 42.2 10.12 10 44 42.9 9.27 9 40 2 Dilip Kumar Mandal 33.95 8.14 38 98 33.95 7.34 38 98 3 Sanjoy Kumar Chandra 31.65 7.59 8 32 31.65 6.84 8 32 4 Mina Chandra 25.6 6.14 5 26 25.6 5.53 5 26 5 Prakash MuljiVora 22.65 5.43 5 26 22.65 4.90 5 26 6 ShilpaMaheshwari 22 5.28 4 24 22 4.76 4 24 7 SubhashGangaprasad 18.9 4.53 4 26 18.9 4.09 4 26 Gupta 8 MitalDhirajlal Shah 18.25 4.38 5 24 18.25 3.94 5 24 9 Amit Mahendra Vyas 18.05 4.33 4 17 18.05 3.90 4 17 10 Yogesh Sharma 17.55 4.21 4 17 17.55 3.79 4 17 11 HemantVasantLimbach 16.4 3.93 4 20 16.4 3.54 4 20 ia 12 RamjiKarsanHirani 16.3 3.91 3 14 16.3 3.52 3 14

13 Bharat 16 3.84 4 18 16 3.46 4 18 VasantlalThakker 14 ShreechandGulabchan 15.3 3.67 3 19 15.3 3.31 3 19 dSarda 15 SanjaykumarSukhdeva 15.1 3.62 3 16 15.1 3.26 3 16 ramMaharshi 16 Rajesh Kumar 13.05 3.13 2 11 13.05 2.82 2 11 Maheshwari HUF 17 AmolShreechandSarda 12.35 2.96 2 12 12.35 2.67 2 12 18 ParulSomani 10.95 2.63 3 15 10.95 2.37 3 15 19 Dilip Khatri 10.5 2.52 3 13 10.5 2.27 3 13 20 Vandana Shankar 10.3 2.47 3 18 10.3 2.23 3 18 Magar 21 KavshalyadeviGulabch 6.8 1.63 2 8 6.8 1.47 2 8 andSarda 22 NileshTukaramGhadshi 5.9 1.42 2 9 5.9 1.28 2 9 Total 399.75 95.88 121 507 400.4 86.56 120 503 5

57. As can be seen from the table above, the collective trading of the Noticees led to almost entire LTP contribution to the scrip of PSIT because of which the price of the scrip rose from Rs. 50 to Rs. 466.9 during the period in which these 22 Noticees traded. As discussed earlier in the order, the Noticees acted collectively under a premediated scheme and therefore, their trading cannot be viewed independent of each other. In view of the above, I do not find any merit in the submission of the seller Noticees in this regard.

58. Another related contention made by the Noticees is that they did not induce any one to deal in securities. In this regard, I note that under regulation 2(1)(c) of the PFUTP Regulations, “fraud” has been defined to include any act, expression, omission or concealment committed in order to induce another person to deal in securities. Thus, any act/ expression / omission / concealment committed towards inducing another person to deal in securities would be covered within the definition of fraud, and actual inducement would not be required. Nonetheless, in the instant case the facts demonstrate that actual price rise had occurred and the demand for shares of PSIT was high, which shows that there was actual inducement. Therefore, the submission, in my view, is incorrect as the LTP contribution by the sellers (who received shares in off-market from the transferors under a pre-meditated scheme) led to price rise which resulted in huge demand for the shares. Thus, the buyers were induced to purchase the shares because of the price rise caused by the sell trades of the seller Noticees.

59. In light of the foregoing, the above discussed trading behaviour and the conduct of the Noticees, the preponderance of probability leads to the conclusion that the tradings/transactions of the Noticees are not genuine and are contrary to their claim that is the same are in the ordinary course of their business. To reiterate, in this present case, the transferors (Noticees No. 23 to 26) transferred the shares through off-market transactions in a distributed manner, and within a few weeks of the receipt of shares, the transferees (Noticees No. 1 to 22) started selling shares in miniscule quantities turn by turn in such a manner so as to raise the LTP of the scrip to the maximum limit possible with every trade over a period of several months. Hence, the preponderance of probability leads us to the conclusion that the Noticees have acted in a manipulative manner for increasing the price of the scrip of PSIT. In view of the above, I find that the Noticees have violated Regulations 3(a),(b),(c),(d), 4(1) and 4(2) (a),(e) of SEBI (PFUTP) Regulations, 2003.

C. If the answers to issues A and B are in the affirmative, what directions are required to be issued against the Noticees?

60. As noted above, the violations of Regulations 3(a),(b),(c),(d), 4(1) and 4(2) (a),(e) of SEBI (PFUTP) Regulations, 2003 have been established against the Noticees. Now, the final question that emerges for consideration is what directions are required to be issued against the Noticees in light of the violations committed by them. In this regard, I note that Section 11 of SEBI Act casts a duty on the Board to protect the interests of investors in securities and to promote the development of and to regulate the securities market. For achieving such object, it has been authorized to take such measures as it thinks fit. Thus, power to take all measures necessary to discharge its duty under the statute, which is a reflection of the objective disclosed in the preamble, has been conferred in widest amplitude.

Pursuant to the said objective, PFUTP Regulations have been framed. The said Regulations apart from bringing transparency and fairness among other things aim to preserve and protect the market integrity in order to boost investor confidence in the securities market. Because of the non-genuine and manipulative scheme orchestrated by the Noticees where under Noticees No. 23 to 26 transferred the shares of PSIT in off-market to the other 22 Noticees and then the said 22 Noticees sold those shares in the market in miniscule quantities in a coordinated manner with an aim to increase the price of the scrip, not only the investors were defrauded and misled but it also impaired the integrity of the securities market. In view of the same and considering the violations committed by the Noticees, it becomes necessary for SEBI to issue appropriate directions against them for debarring them from the securities market for an appropriate period of time.

Order:

61. Considering the findings recorded in this order pertaining to the violations committed by the Noticees, I, in exercise of the powers conferred upon me under sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992 read with section 19 thereof, hereby restrain the Noticees from accessing the securities market and buying, selling or dealing in securities, either directly or indirectly, in any manner for a period of six (6) months from the date of this order. Needless to say that in view of the prohibition on sale of securities, during the period of restraint, the existing holding, including units of mutual funds, of the Noticees shall remain frozen.

62. It is made clear that if the Noticees have any open positions in any exchange traded derivative contracts, they can close out/ square off such open positions within 3 months from the date of order or at the expiry of such contracts, whichever is earlier. It is also clarified that these Noticees can settle the pay-in and pay-out obligations in respect of transactions, if any, which have taken place before the close of June 05, 2020.

63. The order shall come into force with immediate effect.

64. A copy of this order shall be served upon all recognized Stock Exchanges, Depositories and the Registrar and Share Transfer Agents to ensure compliance with the above directions.

Sd/-

DATE: June 05, 2020 MADHABI PURI BUCH PLACE: Mumbai WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA