Pankaj Kumar vs Sebi

Date of Decision: 11.10.2019

Appeal No.68 of 2019 Kiran Kulkarni 503, Konark Classic, 85 Hill Road, Bandra West, Mumbai, Maharashtra 400050. ... Appellant

Versus

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

Mr. Ramesh Gogawat, Advocate with Mr. Nikhil Shah and Mr. Joby Mathew, Advocates i/b. Joby Mathew & Associates for the Appellant.

Mr. Chirag Bhavsar, Advocate i/b. MDP & Partners for the Respondent.

With Appeal No.69 of 2019 Pankaj Kumar A 903, Lake Castle, Cliff Avenue, Hiranandani Garden, Powai, Mumbai, Maharashtra - 400 076. ... Appellant

Versus

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

Mr. Ramesh Gogawat, Advocate with Mr. Nikhil Shah and Mr. Joby Mathew, Advocates i/b. Joby Mathew & Associates for the Appellant. 2

Mr. Chirag Bhavsar, Advocate i/b. MDP & Partners for the Respondent.

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

Per : Justice Tarun Agarwala (Oral)

1.

Since both the appeals involve common question of law

and fact, the same are being decided together by a common

order. The Adjudicating Officer in both the appeals have

imposed a penalty of Rs.6 lakhs for violation of Regulation

13(4) and 13(4A) of the Securities and Exchange Board of

India (Prohibition of Insider Trading) Regulations, 1992

(hereinafter referred to as 'PIT Regulations) and Regulation

12(1) of the PIT Regulations.

2. The appellant Kiran Kulkarni promoter and managing

director of Geodesic Ltd. bought 6,90,000 shares and sold

5000 shares during the financial year 2011-12 on four

occasions. The said appellant was required to make a

disclosure under Regulation 13(4) and 13(4A) of the PIT

Regulations to the stock exchanges with regard to the

transactions within two working days. Since there had been a

delay in the disclosure ranging from two days to eight days,

the Adjudicating Officer found that there was a violation and 3

consequently imposed a sum of Rs.4 lakhs i.e. a minimum of

Rs.1 lakh for each violation. Further, the said appellant

entered into opposite transaction i.e. sell or buy any number

of shares within six months following the prior transaction

and, thus, violated Clause 4.2 under Schedule I (Part A) read

with Regulation 12(1) of the PIT Regulations and

accordingly a sum of Rs.2 lakhs was imposed as penalty.

3. Similar is the case of the appellant Pankaj Kumar who

was the promoter and director and had identical charges. A

penalty of Rs.6 lakhs was also imposed upon him.

4. Having heard the learned counsel for the parties, we

find that admittedly the appellant had not made the

disclosures within the stipulated period and had also entered

into opposite transaction before the expiry of the stipulated

period. We find that the appellants were promoter, director

and managing director and, therefore, they should have been

cautious in ensuring that the disclosures which are mandatory

were made during the stipulated period. Since the same was

not done, a minimum penalty of Rs.1 lakh was imposed for

belated disclosure. Further, a minimum of Rs.2 lakhs was

imposed for entering into opposite transactions. The

Adjudicating Officer in our opinion has considered the 4

mitigating circumstances in imposing the minimum penalty

and consequently we do not find any mitigating

circumstances for further reducing the penalty amount.

5. For the reasons stated aforesaid, we do not find any

merit in the appeals and are dismissed. The appellants are

directed to deposit the penalty amount as per the impugned

order within four weeks from today.

Sd/-

Justice Tarun Agarwala Presiding Officer

Sd/-

Dr. C. K. G. Nair Member

Sd/-

Justice M.T. Joshi Judicial Member

11.10.2019 Prepared and compared by RHN