ORDER UNDER RULE 5 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995 IN THE MATTER OF ADJUDICATION PROCEEDINGS AGAINST SHRI MANISH MARWAH .
1. Pursuant to the investigation conducted by the Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) into the dealings in the scrip of Sun Infoways Ltd., SEBI appointed Shri S.V. Krishnamohan as the Adjudicating Officer to inquire into and adjudge under Section 15I of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the ‘SEBI Act’), the violation alleged to have been committed by Shri Manish Marwah (hereinafter referred to as the noticee) on account of his failure to furnish to SEBI, information regarding his dealings in the scrip of Sun Infoways Limited (hereinafter referred to as SIL).
2. It is alleged that the investigating Authority of SEBI issued summons dated January 16, 2002 to the noticee requiring the noticee to appear before it and also to furnish details regarding his dealings in the shares of SIL. It is alleged that the noticee failed to comply with the said summons and also failed to submit information to the investigating authority. Subsequently, I have been appointed as the Adjudicating Officer in the place of Shri. S.V.Krishnamohan to conduct the inquiry in the matter.
NOTICE AND REPLY
3. A show cause notice A&E/BS/46417/2005 dated August 9, 2005 was issued to the noticee in terms of Rule 4 of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as the “Rules”) seeking reply of the noticee as to why an inquiry should not be held against him in respect of the violations alleged to have been committed by him.
4. It is noted that the said notice sent by registered post has been returned undelivered. In view of the same, substituted service of the show cause notice was effected on 17.9.2005 in terms of the provisions of Rule 7 of the Rules.
5. As the noticee failed to reply to the show cause notice despite being given sufficient time and opportunity, the inquiry is proceeded with taking into account the facts and material available on record.
CONSIDERATION OF EVIDENCE AND FINDINGS
6. The allegation against the noticee is that he failed to comply with the summons dated January 16, 2002 issued by investigating authority and in view of the same, he is liable to the penalty prescribed under Section 15 A (a) of the SEBI Act, 1992. In this regard it is pertinent to note that Section 11C (3) of the SEBI Act empowers the investigating authority of SEBI to require any person associated with the securities market to furnish such information or to produce such records as may be required by the investigating authority. Further, Section 11 C (5) empowers the investigating authority to examine such persons. Timely submission of information is very important for concluding investigation proceedings and non cooperation by an entity can be detrimental to the interests of investors and securities market on account of any delay in the investigation.
7. In this regard, the provisions of Section 15A(a) of SEBI Act provides the following:
Penalty for failure to furnish information, return, etc.: If any person, who is required under this Act or any rules or regulations made thereunder, to furnish any document, return or report to the Board, fails to furnish the same, he shall be liable to a penalty of one lakh rupees for each day during which such failure continues or one crore rupees, whichever is less.
8. It is noted that investigating authority issued summons dated January 16, 2002 to the noticee informing him that his attendance was required in connection with the investigation instituted by SEBI in the case of SIL. The noticee was advised to appear in person before the investigating authority on January 29, 2002.
9. It is pertinent to note in this regard that no proof of delivery of the said summons is available on record. Hence the same cannot be deemed to have been served on the noticee.
10. As no proof of service of summons is available on record, in the facts and circumstances of the case it cannot be construed that the noticee failed to comply with the summons issued by the investigating authority. In this regard, it is also pertinent to note that the show cause notice in the present adjudication proceedings also returned undelivered and subsequently substituted service of the notice was effected on the premises of the noticee as per the address available on record. As no reply has been received from the entity, and further, considering the fact that no proof of service of the summons on the noticee is available on record, on the basis of the facts and evidence available on record, it cannot be construed that the noticee failed to comply with the summons issued by the investigating authority. As the violation committed by Shri.Manish Marwah is not established, no penalty is imposed on Shri.Manish Marwah in terms of the provisions of Section 15 A(a) of the SEBI Act.
11. In terms of the provisions of Rule 6 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules 1995, copies of this order are sent to Shri Manish Marwah and to the Securities and Exchange Board of India.
| Place: Mumbai |
S. Biju
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| June 30, 2006 |
Adjudicating Officer
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