Appeal No. 25/2006
Date of Decision
8.2.2006
Joindre Capital Services Ltd.
Represented by Dr. Saleh, Sr. Advocate with Mr. Shyam Mehta & Mr. R.D. Suvarna, Advocate
Versus
Securities & Exchange Board
of India
Coram:
Justice N.K. Sodhi, Presiding Officer
C. Bhattacharya, Member
R. N. Bhardwaj, Member
Per: Justice N.K. Sodhi, Presiding Officer
Challenge in this appeal to the order dated 25.1.2006 passed by the Securities and Exchange Board of India (for short “the Board”) suspending for one month the certificate of registration of the appellant which is a member of the Bombay Stock Exchange and National Stock Exchange. The only ground on which this penalty of suspension has been imposed is that the appellant as a registered broker while executing a sale order on behalf of one of its client had not charged margin money. This is admittedly in violation of a circular issued by the Board. The plea that the appellant had with it security in the form of shares from the client was not accepted by the Board because the circular does not permit security other than cash to be obtained by way of margin money. We are also not inclined to accept this explanation. It is thus clear that the appellant had violated the circular issued by the Board. The question for our consideration is as to what should be the penalty imposed in the circumstances of the case. We are of the view that the suspension of the certificate of registration for one month in the circumstances of the case is too harsh and disproportionate to the gravity of the irregularity found. The appellant is a registered broker having more than 100 sub-brokers working under him and it has about 250 terminals throughout the country where it is carrying on its business as a broker. Having regard to the fact that the Board had never found the appellant defaulting in the past and taking into account the magnitude of the business carried on by the appellant we are of the view that the ends of justice would be adequately met if the appellant is directed to pay a sum of Rs. 50,000/- as penalty for violating the circular issued by the Board. We order accordingly. The impugned order passed by the Board stands modified accordingly.
2. The appeal stands disposed of as above with no order as to costs.
Member
R.N. Bhardwaj