Trupti Twisters Ltd. vs Sebi

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date of Decision: 17/04/2018

Appeal No.86 of 2018

Trupti Twisters Ltd. 304, 3rd Floor, Shopper's Plaza-5, Nr. 5 Govt. Society, Opp. Municipal Market, C.G. Road, Navrangpura, Ahmedabad - 380 009. ... Appellant

Versus

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

Mr. Keyoor Bakshi, authorized representative of the Appellant.

Mr. Sagar Ghogre a/w Mr. Rupesh Geete, Mr. Vibhor Kapoor and Mr. Anuj Athalye, Advocates i/b Legasis Partners 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 8th January, 2018. By the said

order, penalty of Rs.2 lac is imposed on the appellant under Section

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

for short) for failing to obtain the SCORES authentication within the

time stipulated in the circulars issued by SEBI.

2. It is not in dispute that in spite of the circulars issued by SEBI on

13th August, 2012 and 14th September, 2012, the appellant failed and

neglected to obtain SCORES authentication within the time stipulated

in the said circulars. Admittedly, the appellant obtained SCORES

authentication belatedly in December, 2016. In view of delay in

obtaining SCORES authentication, penalty proceedings were initiated

against the appellant and by the impugned order dated 8th January,

2018 the AO of SEBI has imposed penalty of Rs.2 lac on the appellant

under Section 15HB of the SEBI Act.

3. Authorized representative of the appellant submitted that the

appellant was a defunct company as the trading in the scrip of the

appellant-company was suspended in the year 2004. It is only when

efforts were made for revival of the company in the year 2016 it was

noticed SCORES authentication had remained to be obtained.

Accordingly, steps were taken to obtain SCORES authentication and lift

the suspension imposed on the trading in the scrip of the company. In

these circumstances, it is submitted that imposition of penalty of Rs.2

lac is unjustified.

4. The representative of the appellant further submitted that in the

show-cause notice issued to the appellant on 5th December, 2017, the

allegation made is that the appellant had failed to take SCORES 3

authentication. Since the appellant had already taken the SCORES

authentication in December, 2016, SEBI could not have issued such

show-cause notice to the appellant. Moreover, it is submitted that the

AO could not have held in the impugned order that the appellant had

obtained SCORES authentication belatedly, because, that was not the

allegation made in the show-cause notice. Accordingly, it is submitted

that the AO SEBI has exceeded his jurisdiction by going beyond the

show-cause notice and therefore, the penalty imposed liable to be

quashed and set aside.

5. We see no merit in the aforesaid contentions.

6. At the outset, it is relevant to note that the show-cause notice

issued to the appellant specifically records that as per the circulars

issued by SEBI, it was obligatory on part of all the listed companies

(including the appellant) to obtain SCORES authentication within the

time stipulated therein. As the appellant - a listed company failed to

obtain SCORES authentication within the stipulated time, show-cause

notice was issued to the appellant. Therefore, the appellant is not

justified in contending that in the show-cause notice, there was no

grievance that the appellant had obtained SOCRES authentication

belatedly. The argument advanced on behalf of the appellant is totally

frivolous.

7. Fact that the appellant-company was a defunct company for

several years could not be a ground for the appellant-company listed on

the Stock Exchange to disobey the circulars issued by SEBI. 4

8. Penalty imposable under Section 15HB of SEBI Act for violating

circulars of SEBI is up to Rs.1 Crore and the AO after taking into

consideration all mitigating factors has imposed penalty of Rs.2 lac

which cannot be said to be unreasonable or excessive.

9. Accordingly, we dismiss the appeal with costs quantified at

Rs.10,000 to be paid by the appellant to SEBI within a period of four

weeks from today.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Dr. C.K.G. Nair Member

17/04/2018 prepared & compared by-dg