IN THE SECURITIES APPELLATE TRIBUNAL

MUMBAI

 

Appeal No.20 of 2006

 

Date of decision: 13/02/2006

 

SPS Share Brokers Pvt.Ltd.,                                          …..              Appellant

 

                   Versus

 

Securities & Exchange Board of India                             ….             Respondent

 

 

Mr. S. K. Bhardwaj,  Advocate  for the Appellant

 

Mr. Ravi Hegde, Advocate with  Mr. Paras Parekh, Advocate for the Respondent.

 

Coram:

 

          Justice N. K. Sodhi, Presiding Officer

          C. Bhattacharya, Member

          R. N. Bhardwaj, Member

 

Per:   Justice N. K. Sodhi, Presiding Officer (Oral)

 

          Challenge in this appeal is to the order dated October 25, 2005 passed by the Adjudicating officer imposing a penalty of Rs.1 lac on the appellant for not complying with the provisions of section 11 C (5) and Section 11 (3) of the Securities and Exchange Board of India Act, 1992 (for short the Act).

2.       The Securities and Exchange Board of India (hereinafter called “the Board”) ordered investigation into the suspected unfair trade practices in the trading of the scrip of T. Spiritual World Ltd., (for short “the Company” ).  It is not in dispute that the appellant is a registered broker with the Board and it traded in the scrips of the company on behalf of its clients  and that was the subject matter of the investigation.   During the course of the investigation, the appellant was called upon to appear and produce the relevant records.  Summons  were issued in this regard requiring the appellant to appear on April 29, 2005.  The appellant did not respond to this summons and requested for an adjournment on the plea that it had been served only a day before the date of hearing.  The request was granted and the proceedings were adjourned to May 18, 2005.  A second set of summons was issued to the appellant on April 29, 2005 requiring its representative to appear in  person on the date fixed i.e. May 18, 2005.  More than two weeks notice had been received by the appellant but it did not put in appearance and again sought further time by sending a letter of request on May 18, 2005.  The matter was adjourned to the following day i.e. on May 19, 2005.  The Director of the appellant company expressed his inability to appear as his new office was being inaugurated.  It is, thus, clear that despite  the summons issued to the appellant it failed to respond  to them and did not render co-operation to the Board in the matter of investigations undertaken by it regarding the unfair trade practices allegedly committed during the trading of the scrip of the Company.   The appellant was the broker and it is obvious that it failed to furnish information in its possession which was necessary to be placed before the Board for further investigations.  Since the appellant did not co-operate in the investigations, it was guilty of having violated the provisions of Sections 11 C (3) and (5) read with Section 11(3) of the Act.   Since no separate penalty is provided for violation of these provisions the Adjudicating Officer relying upon the provisions of section 15HB of the Act imposed a penalty of Rs.1 lac.  Hence this appeal.

3.       We have heard the  learned counsel for the parties and are not inclined to interfere with the impugned order.  It is clear from the record that despite summons issued to the appellant on two occasions it did not appear before the investigating officer and did not produce the relevant record summoned from it.  On the request of the appellant the matter was adjourned from May 18  to May 19 and then again the Director of the appellant company did not appear because the new office of the company was to be inaugurated.  We do not think that such lame excuses could justify the non appearance of the appellant.  The Adjudicating officer after following the statutory procedure rightly found that the appellant violated the aforesaid provisions of the Act thereby making itself liable to be penalized.  The amount of penalty that is  leviable  under section 15HB of the Act  could go up to  Rs.1  crore but having regard to the circumstances of the present case the Adjudicating officer imposed a minor penalty of Rs.1 lac only.  We are clearly of the view that the impugned order does not call for  any interference in appeal.

4.       In the result,  the appeal fails and the same stands dismissed.  Parties to bear their own costs.

 

Sd/-

Justice N. K. Sodhi

Presiding Officer.

 Sd/-

C. Bhattacharya

Member.

 Sd/-

 R. N. Bhardwaj,

Member

 

13/02/2006.