Ritman Infra Ltd. vs Sebi

Date of Decision : 05.09.2019

Appeal No. 344 of 2019

Ritman Infra Ltd. Regd. Office: Ritman House, 14, Ayed Amir Ali Avenue, Kolkata - 700 017. ... 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

Ms. Sheetal Prakash, Advocate with Ms. Bahar, Advocate i/b M V Law Partners for the Appellant. Mr. Abhiraj Arora, Advocate with Mr. Vivek Shah, Advocate i/b ELP 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, Presiding Officer (Oral)

1.

Pursuant to the show cause notice and the reply filed by the

appellant, the Whole Time Member (hereinafter referred to as, 2

'WTM') found that the appellant had not appointed the Company

Secretary for the financial years 2015-16 and 2016-17. The WTM

further found that during the relevant period the company had only

four directors and one independent director and, therefore, the

company did not have proper composition of an audit committee,

nomination and remuneration committee as required under the

provision of Companies Act, 2013 and, thus, the appellant had

violated the provisions of Regulations 6(1), 18(1)(b) and 19(1)(c) of

the Securities and Exchange Board of India (Listing Obligations and

Disclosure Requirements), Regulations, 2015 (hereinafter referred to

as, 'LODR Regulations'). The WTM accordingly directed the

company to appoint the company secretary and constitute the audit

committee, nomination and remuneration committee and till such

time the said committees were not constituted, the appellant was

restrained from accessing the securities market for a period of six

months or till such time the compliances were not made.

2. The appellant being aggrieved by the said order has filed the

present appeal.

3. We have heard Ms. Sheetal Prakash with Ms. Bahar, the learned

counsel for the appellant and Mr. Abhiraj Arora with Mr. Vivek

Shah, the learned counsel for the respondent. 3

4. It was contended that the Company Secretary was appointed on

October 6, 2018 and since there was a delay, penalty of Rs. 7,080/-

was paid to the Calcutta Stock Exchange and necessary details were

provided to the respondent which has not been considered. It was

stated that since the paid up capital of the company is Rs. 3.19 crores

and the net worth of the company is Rs. 3.68 crores, Regulations 18

and 19 of the LODR Regulations are not applicable in as much as

they are applicable to listed entities which has a paid up capital of

more than 10 crores. The aforesaid assertions have been made by the

appellant in paragraph 6.2 of the memo of appeal.

5. The respondent has denied the assertions made in paragraph

6.2 of the memo of appeal in paragraph 19 of their reply and

contended that no such assertion was made by the appellant before

the WTM in the written submission nor any proof has been filed

before this Tribunal and only a bald statement has been made. The

learned counsel has however admitted that Regulations 18 and 19 are

not applicable though this fact has not been stated specifically in the

reply.

6. Since no proof of the appointment of the company secretary

has been filed before this Tribunal nor was filed before the WTM, we 4

are not inclined to interfere in the impugned order as we do not find

any material to set aside the order to show that the appellant had

complied with the LODR Regulations. The appeal is accordingly

dismissed.

7. However, in the event, the appellant files an application before

the WTM showing proof of appointment of the Company Secretary

and consequent compliance of Regulation 6 of the LODR

Regulations as well as make a statement that Regulations 18 and 19

are not applicable to the appellant as their paid up capital is less than

10 crores, the WTM will reconsider the matter and pass appropriate

orders within four weeks from the date of filing of such application.

Sd/-

Justice Tarun Agarwala Presiding Officer

Sd/-

Dr. C. K. G. Nair Member

Sd/-

Justice M. T. Joshi Judicial Member

05.09.2019 Prepared & Compared by PTM