SECURITIES AND EXCHANGES BOARD OF INDIA
ADJUDICATION ORDER
UNDER
SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995
AGAINST
SHRI MADHUSUDHAN PASARI
FOR THE ALLEGED VIOLATION OF SECTION 15 A(a) OF SEBI ACT, 1992
1.0 I was appointed as Adjudicating Officer by SEBI to inquire into and adjudge under Section 15A(a) of SEBI Act, 1992 the alleged non compliance of summons issued by the Investigating Authority, by Shri Madhusudhan Pasari for production of documents and submission of information pertaining to investigation in the scrip of M/s. Superstar Leafin Ltd.
1.1 Accordingly, a show cause notice dated 1st October 2003 was issued to the aforesaid entity. The said show cause notice alleged that the noticee did not comply with the summons dated 18.02.03 and furnish information relating to his investments in the scrip of Superstar Leafin Ltd.
2.0 REPLY AND PERSONAL HEARING
2.1 The noticee filed reply dated 21.10.2003 and also attended the personal hearing on 21.11.03. Shri Manoj Banthia, Chartered Accountant appeared on behalf of the noticee. The following submissions were made .
1. It was denied that the noticee has not complied with the summons dated 18.2.2003.
2. It was submitted that the requisite information was sent to ERO vide his letter dated 21.02.03 addressed to DGM, SEBI, ERO and a copy of the same alongwith the Under Certificate of Posting (UCP) was furnished in support of his claim.
3. It was submitted that the noticee had not dealt in the scrip of Superstar Leafin Ltd.
4. It was submitted that the noticee was a man of small means with a salary of Rs.24,000/- per annum and did not have anything to do with the share market related activities. Copies of IT returns were filed.
5. It was submitted that since he had not traded in the shares of Superstar Leafin Ltd. he did not give serious attention to the notices issued.
3.0 FINDINGS
3.1 In view of the submission that the noticee had already complied with the summons and submitted the necessary information to ERO and also produced a copy of the UCP as proof of dispatch and that he had not traded in the scrip of Superstar Leafin Ltd., the AO vide letter dated 12.11.03 sought the views of ERO in this regard. However, no reply has been received.
3.2 The letter dated 21.2.03 of the noticee is perused. It clearly states that the noticee had not trade din the scrip of Superstar Leafin Ltd. There is no material to suggest that the noticee had deliberately withheld information from the Investigating Authority. On the contrary, he has submitted that the requisite information has already been sent to SEBI, ERO vide his letter dated 21.2.03 wherein he has stated that he has not at all traded in the scrip of Superstar Leafin Ltd. It is evident from the IT returns submitted by the noticee that he is a man of small means having a low income of Rs.24,000/- per annum. Hence a lenient view is taken.
4.0 ORDER
4.1 Taking into account the submission that the noticee had responded to the summons and submitted the requisite information vide his letter dated 21.02.03 and production of UCP thereto as proof of dispatch, and the submission that he did not trade at all in the scrip of Superstar Leafin Ltd. and that he is a man of small means with an income of Rs.24,000/- per annum, it would not be fair, just and proper to impose a penalty on the noticee under Section 15A(a).
Accordingly, no penalty is levied.
Date: June 18, 2005 S V KRISHNA MOHAN
Place : Mumbai ADJUDICATING & ENQUIRY OFFICER