Smt. Veena Rajesh Shah vs Sebi

Date of Decision: 23.11.2017

Appeal No. 300 of 2017

Smt. Veena Rajesh Shah 3/B, Shantiniketan-3, Shantinagar Society, Usmanpura, Ahmedabad- 380 013 ...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. Ashok Bansal, Chartered Accountant for the Appellant.

Ms. Mona Bhide, Advocate with Ms. Disha Saxena, Advocate i/b Dave & Girish & Co. for the Respondent.

CORAM: Justice J.P. Devadhar, Presiding Officer Jog Singh, Member 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 the Securities and Exchange

Board of India ("SEBI" for short) on August 28, 2017. By the said order

penalty of ` 15 lac is imposed on the appellant under Section 15A(b) of

the SEBI Act, 1992 for violating regulation 29(1) and 29(2) read with

regulation 29(3) of the Securities and Exchange Board of India

(Substantial Acquisition of Shares and Takeovers), Regulations, 2011

("SAST Regulations, 2011" for short) and regulation 13(1), 13(3) read 2

with regulation 13(5) of the SEBI (Prohibition of Insider Trading)

Regulations, 1992 ("PIT Regulations" for short).

2. It is not in dispute and in fact the appellant had admitted before the

AO about the aforesaid violations. Only argument advanced on behalf of

the appellant was that the non-compliance of disclosure obligations

contained in the aforesaid regulations were purely unintentional and had

happened on account of lack of knowledge and understanding of the

regulations framed by SEBI. Since violations of the regulations were

admitted by the appellant, the AO was justified in imposing penalty

against the appellant.

3. Argument of the appellant that the penalty imposed is excessive

and disproportionate to the violations committed/profits made by the

appellant is without any merit. On perusal of the impugned order it is

seen that on nine different dates the trades executed by the appellant

triggered the disclosure obligations contained in the SAST Regulations

and the PIT Regulations. Penalty imposable under Section 15A(b) of the

SEBI Act for each violation is ` 1 crore. Consequently, for nine

violations the penalty imposable would be ` 9 crore. Thus, as against the

penalty of ` 9 crore imposable on the appellant for violating SAST

Regulations and PIT Regulations, the AO has imposed penalty of `15 lac

which cannot be said to be excessive or exorbitant.

4. Argument of the appellant that the profits made by the appellant

from the transactions in question being negligible, the AO ought to have 3

taken a lenient view is without any merit, because, penalty under Section

15A(b) of SEBI Act is not dependent on the quantum of profits made

from the violations. In any event, taking into consideration all mitigating

factors the AO has imposed penalty of ` 15 lac as against the penalty of

` 9 crore imposable on the appellant for repeatedly failing to make

disclosures under the SAST Regulations, 2011 and PIT Regulations.

5. In these circumstances, we see no merit in the appeal and the same

is hereby dismissed with no order as to costs.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Jog Singh Member

Sd/-

Dr. C.K.G. Nair Member 23.11.2017 Prepared & Compared By: PK