Pashupati Cables Ltd. vs Sebi

Date of Decision: 07/05/2018

Appeal No.107 of 2018

Pashupati Cables Ltd. 27-A, 'C' Wing, Mhatre Plaza, Ground Floor, Dhanukarwadi, Kandivali (W), Mumbai - 400 067. ... Appellant

Versus

Securities and Exchange Board of India Plot No.C4-A, 'G' Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ... Respondent

Mr. Kamal Agarwal, FCA and authorized representative for the Appellant.

Mr. Karan Bhosale a/w Mr. Pulkit Sukhramani andMs.Vidhi Jhawar, Advocates i/b The Law Point for the Respondent.

CORAM : Justice J.P. Devadhar, Presiding Officer Dr. C.K.G. Nair, Member

Per : Justice J.P. Devadhar (Oral)

1.

This appeal is filed to challenge the order passed by the

Adjudicating Officer ("AO", for short) of Securities and Exchange

Board of India ("SEBI", for short) on 27th December, 2017. By that

order, penalty of Rs.6 lac is imposed on the appellant under Section

15HB of Securities and Exchange Board of India Act, 1992 ("SEBI Act", 2

for short) for violating Circulars issued by SEBI on 3rd June, 2011, 13th

August, 2012, 17th April, 2013 and 18th December, 2014.

2. Fact that the appellant failed to obtain SCORES authenticated in

spite of SEBI issuing four circulars in that behalf is not in dispute.

However, it is contended that the impugned order is bad-in-law,

because, firstly the impugned order is passed without serving the

show-cause notice on the appellant. Secondly, it is contended that since

the trading in the scrip of the appellant has been suspended since 15th

March, 1999, the appellant had not registered itself under SCORES.

Thirdly, it is contended that in the absence of any investor complaints

or any loss to the investors, the AO is not justified in imposing penalty

on the appellant. Fourthly, is contended that since the company itself

has been delisted on 5/7/2017 the AO is not justified in passing the

impugned order on 27/12/2017.

3. We see no merit in the aforesaid contentions.

4. Grievance of the appellant that the show-cause notice was not

served on the appellant would not survive in the present case, because,

it is admitted by the authorized representative of the appellant that

SCORES authentication has not been obtained in spite of the circulars

issued by SEBI from time to time. Once it is admitted that the appellant

has violated SEBI Circulars, then directing issuance of a show-cause

notice in that behalf would be futile and in such a case, the only 3

question to be considered would be, whether the penalty imposed in

the present case is justified or not.

5. Argument of the appellant that the SCORES authentication was

not obtained on account of the trading in the scrip of the appellant

being suspended in the year 1999 is untenable, because, being a listed

company, it was obligatory on part of the appellant to obtain SCORES

authentication in terms of SEBI Circulars even if the trading in the scrip

was suspended in the year 1999. Similarly, fact that there was no

investor complaint or investor loss could not be a ground for not

obtaining SCORES authentication, because, appellant was obliged to

obtain SCORES authentication under the SEBI Circulars, even if there

was no investor complaint or investor loss. It was not open to the

appellant to contend that SCORES authentication would be obtained

only after the investor complaint, if any, was filed.

6. Similarly, fact that the company has been delisted on 5/7/2017

cannot be a ground to escape penalty for the violations committed

under the SEBI Act up to the date on which the appellant-company was

delisted. However, all the aforesaid factors could be the mitigating

factors required to be considered while imposing penalty for the

violations committed.

7. Penalty imposable under Section 15HB of SEBI Act for non-

compliance of the circulars issued by SEBI is up to Rs.One Crore.

However, the AO, after taking into consideration all the aforesaid 4

mitigating factors has imposed penalty of Rs.6 lac which cannot be said

to be unreasonable or excessive.

8. In these circumstances, we see no reason to interfere with the

order impugned in the appeal.

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

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Dr. C.K.G. Nair Member

07/05/2018 prepared & compared by-dg