Reliance Industries Limited vs Sebi

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date of Decision: 16.12.2015

Appeal No. 306 of 2014

Reliance Industries Limited 3rd Floor, Maker Chamber IV, 222, Nariman Point, Mumbai- 400 021 ...Appellant

Versus

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

Mr. Janak Dwarkadas, Senior Advocate with Mr. Rohan Rajadhyaksha, Mr. Rajendra Barot and Mr. Divij Kishore, Advocates i/b AZB & Partners, for the Appellant.

Mr. Shiraz Rustomjee, Senior Advocate with Mr. Mihir Mody and Ms. Shruti Chiniwar, Advocates i/b K. Ashar & Co. for the Respondent.

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

Per: Justice J.P. Devadhar (Oral)

1.

Appellant is aggrieved by the adjudication order passed by the

Adjudicating Officer of Securities and Exchange Board of India ("SEBI"

for short) on 08.08.2014. By that order penalty of ` 1 crore is imposed

on the appellant for allegedly violating Section 23A(a) of the Securities

Contracts (Regulation) Act, 1956 and penalty of ` 12 crore is imposed

on the appellant for allegedly violating Section 23E of the Securities

Contracts (Regulation) Act, 1956.

2. One of the major ground taken in the appeal is that in paragraph 29

of the impugned order, the Adjudicating Officer has taken into account 2

all the 12 crore shares relatable to the warrants in question while

computing the Diluted Earnings Per Share (DEPS) for the 6 quarters in

question. This factual position is not disputed by SEBI. In view of the

language of AS-20, taking into account all the 12 crore shares relatable to

the warrants in question while computing the DEPS does not appear to be

correct.

3. Since computation of DEPS itself is not in consonance with

AS-20, we set aside the impugned order and remand the matter of a de

novo consideration, leaving all contentions of the parties open. It would

be open to SEBI to issue supplementary show cause notice, if any, within

a period of 8 weeks from today as requested by counsel for SEBI.

4. Appeal is disposed of in the above terms with no order as to costs.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Jog Singh Member 16.12.2015 Prepared & Compared By: PK