BEFORE THE SECURITIES APPELLATE TRIBUNAL, MUMBAI
Appeal No.83/2005
Date of Hearing : 8.12.2005
Date of Decision : 12.12.2005
In the matter of:
Appellant : Hiranandani Steels and Tubes Pvt. Ltd., Mumbai
Respondent : Securities and Exchange Board of India, Mumbai
Appellant by : Dr. Rajnish Pandey, CA
Respondent by : Shri Mihir Mody, Advocate
Coram:
Justice Kumar Rajaratnam, Presiding Officer
C. Bhattacharya, Member
R.N. Bhardwaj, Member
Per: Justice Kumar Rajaratnam, Presiding Officer
The appeal is taken up with consent of parties for final disposal.
2. The appellant challenges the order passed by the Adjudicating Officer of the respondent wherein the respondent has imposed a penalty of Rs.1,00,000/- for belatedly furnishing information sought for by the respondent.
3. There was an investigation with respect to Datapro Information Technology Ltd. (DITL). The Investigating Officer wanted certain information from the appellant and issued summons since the information was not forthcoming.
4. Therefore the Adjudicating Officer initiated action under section 15A of the SEBI Act. An enquiry was held under SEBI (Procedure for Holding Inquiry and Imposing Penalty by Adjudicating Officer) Rules, 1995.
5. The contention of the appellant was that he did not receive the summons. The adjudicating officer has fairly set out in a chart the dates when summons were sent and why they were not served on the appellant. In all these cases it was submitted by the appellant that the summons were not received by the appellant and therefore the appellant was not able to furnish information sought for on the affairs of DITL. The chart is as follows:
|
Date
|
Name/Address
|
Mode of
dispatch
|
Description
|
Remarks
|
|
18/6/2003
|
Hiranandani Steels and Tubes
201, Embassy Centre,
Nariman Point, Mumbai 21
|
Hand Delivery
|
Summons for information
|
Returned undelivered
|
|
18/6/2003
|
Hiranandani Steels and Tubes
Mrs Punam Arora
c/o.Datapro Information technology Ltd., EL-21, Electronic Zone, MIDC, Pune 26
|
Courier
|
Summons for information
|
Partial reply*
|
|
25/7/2003
|
Hiranandani Steels and Tubes
Shri Rajeev Arora,
Director
EL-21, Electronic Zone, MIDC, Pune 26
|
Regd A/d
|
Summons for information
|
Acknowledged- No reply received
|
|
16/9/2003
|
Hiranandani Steels and Tubes EL 21, Electronic Zone, MIDC, Pune 26
|
Regd A/d
|
Summons for information
|
Letter not accepted
|
6. It is not in dispute that when the matter was before adjudicating officer, the appellant had appeared and, in fact, furnished all information that was required. In other words, it was submitted the appellant is being penalized for belated furnishing of information.
7. The finding of the adjudicating officer was that the appellant appeared before the adjudicating officer but not before the investigating officer. It is stated at page 6 of the impugned order as follows:
“It is at this stage, Company is furnishing the detail sought by the Investigating Authority whereas the Company failed to provide the same when desired especially when the Company was duly served through its Directors.”
8. The learned representative of the appellant submitted that, from the endorsement which we have referred to earlier, the summons was not sent to the correct address. The correct address was 402 Deccan House of Turner Road, Bandra West, Mumbai 50. It was also submitted that the correct address was intimated to the respondent.
9. This appeal need not detain us too long since the appellant has furnished information although belatedly and not to furnish in time would certainly amount to a violation of section 15A of the Act. However, taking into account the factors mentioned in section 15J, which are:
“(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default;
(b) the amount of loss caused to an investor or group of investors as a result of the default;
© the repetitive nature of the default.”
and also taking into account the facts and circumstances of the case and also taking into account that the appellant appeared before the adjudicating officer and has furnished the relevant information, it would be appropriate to reduce the penalty from Rs.1,00,000/- to Rs.25,000/-. Time granted for payment four weeks from the date of receipt of this order.
10. The order of the adjudicating officer is modified accordingly.
11. No order as to costs.
Sd/-
Justice Kumar Rajaratnam
Presiding Officer
Sd/- Sd/-
(R.N. Bhardwaj) (C. Bhattacharya)
Member Member
Place: Mumbai
Date: 12th December 2005
Avm