Simplex Projects Limited vs Sebi

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date of Decision : 01.03.2022 Misc. Application No. 32 of 2022 And Appeal No. 19 of 2022 Simplex Projects Limited Regd. Office: 12/1, Nellie Sengupta Saran, 4th Floor, Kolkata - 700 087. ..... Appellant Versus NSE Limited Exchange Plaza, Block G, C 1, Bandra Kurla Complex, Bandra East, Mumbai - 400 051. .... Respondent Mr. Ramesh Chandra Mishra, FCS i/b Mr. Loknath Mishra, Advocate for the Appellant. Mr. Venkatesh Dhond, Senior Advocate with Mr. Rashid Boatwalla, Mr. Aditya Vyas, Mr. Dhruv Jadhav, Advocates i/b MKA & Co. for the Respondent. CORAM : Justice Tarun Agarwala, Presiding Officer Justice M.T. Joshi, Judicial Member Per : Justice Tarun Agarwala, Presiding Officer (Oral) 2 1. The present appeal has been filed against the order dated October 22, 2021 whereby the Delisting Committee directed that the equity shares of the company be compulsorily delisted from the exchange in terms of Regulation 22(1) of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (hereinafter referred to as 'Delisting Regulations, 2009') read with Rule 21(b) of the Securities Contracts (Regulation) Rules, 1957 (hereinafter referred to as 'SCRR') by communication dated November 25, 2021 the company was informed that the shares would be delisted from the exchange with effect from November 26, 2021. 2. The facts leading to the filing of the present appeal is, that the equity shares of the appellant company were listed on National Stock Exchange of India Ltd. (NSE) with effect from August 3, 2007. The trading in the equity shares of the company was suspended with effect from November 26, 2018 due to non- compliance of Regulations 17, 33 and 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as 'LODR Regulations').

An amount of Rs. 35,03,434/- towards fine for non- compliance of Listing Regulations and Rs. 15,12,359/- towards 3 listing fees as on September 13, 2021 for financial years 2017-18, 2018-19, 2019-20, 2020-21 and 2021-22 was due and payable by the company. On account of the non-compliance, a show cause notice dated November 27, 2019 was issued to show cause as to why the shares of the company should not be compulsorily delisted for non-compliance of various provisions of the Regulations. Further, in terms of Regulation 22(3) of the Delisting Regulations, 2009, a public notice dated November 26, 2019 was issued intimating the public with regard to the proposed delisting of the equity shares in which persons were given opportunity to make representation who may be aggrieved by the proposed delisting of the equity shares. Vide letter dated November 28, 2019, the directors and the promoters of the company was also informed about the proposed delisting of the company. 3. In response to the show cause notice, the appellant requested the exchange to allow extension of time to enable the company to make the payments and accordingly the matter lingered on and payments were not made.

Eventually, by an order dated October 22, 2021, the Delisting Committee passed an order compulsorily delisting the equity shares of the company from the exchange. 4 4. This Court while entertaining the appeal also granted further opportunity to the appellant by an order dated January 28, 2022 to pay the fine including annual listing fee, etc. till December 31, 2021 and accordingly directed the matter to be listed today. In spite of time being granted no amount as per the impugned order was deposited. 5. We have heard Mr. Ramesh Chandra Mishra, FCS with Mr. Loknath Mishra, the learned counsel for the appellant and Mr. Venkatesh Dhond, the learned senior counsel with Mr. Rashid Boatwalla, Mr. Aditya Vyas, Mr. Dhruv Jadhav, the learned counsel for the respondent through video conference. 6. We find that the trading in the equity shares of the company has been suspended since November 26, 2018 for non-compliance of Regulations 33 and 34 of the LODR Regulations. Regulation 22(1) of the Delisting Regulations, 2009 provides for delisting of equity shares of the company on any ground prescribed in the rules made under Section 21A of the Securities Contract (Regulations) Act, 1956 (hereinafter referred to as 'SCR Act') alongwith Rule 21 of the SCRR and some of the grounds are that the company has incurred losses during the three consecutive years on trading in the 5 securities and the company is suspended for more than six months, etc. 7. We find that a show cause notice was issued and thereafter a reasonable opportunity was granted to the company on four occasions by the Committee to make good the non-compliance of the regulations and in spite of considerable period of time from 2019 onwards, no steps whatsoever has been taken by the appellant to ensure compliance of the LODR Regulations.

This Tribunal also gave additional time which the company failed to utilize. 8. Considering the aforesaid, we are of the opinion that the order passed by the Delisting Committee compulsorily delisting the equity shares of the company from the exchange under Regulation 22(1) of the Delisting Regulations, 2009 read with Rule 21(b) of the SCRR does not suffer from any error of law. 9. The appeal fails and is dismissed with no order as to costs. 10. The present matter was heard through video conference due to Covid-19 pandemic. At this stage it is not possible to sign a copy of this order nor a certified copy of this order could be issued by the registry. In these circumstances, this order will be digitally signed 6 by the Private Secretary on behalf of the bench and all concerned parties are directed to act on the digitally signed copy of this order. Parties will act on production of a digitally signed copy sent by fax and/or email. Justice Tarun Agarwala Presiding Officer Justice M.T. Joshi RAJALA Digitally signed by RAJALAKSHMI Judicial Member 01.03.2022 KSHMI H HDate: