Appeal No. 12 of 2005
Date of Decision
8.3.2006
Monica Electronics Ltd.
Versus
Securities & Exchange Board of India
Present : None for the appellant
Mr. Dipan Merchant & Mr. Ravi Hegde, Advocates 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)
This appeal under Section 15T of the Securities and Exchange Board of India Act, 1992 (for short “the Act”) arises out of an order dated 16.10.2004 passed by the adjudicating officer imposing a penalty of Rs. 15,000/- on the appellant for failure to redress the grievances of its investors.
2. The appellant is a company incorporated under the provisions of the Companies Act, 1956 and has been carrying on its business of manufacturing and selling of electronic goods like televisions, video recorders etc. The Securities and Exchange Board of India (for short “the Board”) received a large number of complaints from the investors of the appellant company. The company was informed by the Board as per letter dated April 29, 2003 to redress the grievances of its investors within a time frame specified therein. A list of 220 complaints was furnished along with this letter. Despite having received the letter the company did not take steps to redress the grievances and therefore action was initiated against it under Section 15C of the Act. An adjudicating officer was appointed who issued notice to the appellant calling upon it to show cause why action should not be taken under Section 15C of the Act. A reply was filed in which the circumstances due to which the grievances of the investors could not be redressed within a specific time frame were mentioned. On a consideration of the entire material and affording an opportunity of hearing to the appellant, the adjudicating officer found that the appellant had redressed the grievances but not within the time allowed by the Board and that there were some mitigating circumstances as a result of which the appellant could not comply with the directions. The adjudicating officer found that there was labour unrest in the factory premises and the plant had closed and the officers of the company had no access to the office because the labour had gheraoed them. Taking note of these mitigating circumstances and in view of the request made by the appellant that a lenient view may be taken, the adjudicating officer levied a penalty of Rs. 15,000/-. It is against this order that the present appeal has been filed.
3. There is no representation on behalf of the appellant. We have heard Mr. Dipan Merchant, Advocate appearing for the Board. Having gone through the impugned order we find no ground to interfere with the same. There is no gainsaying the fact that large number of complaints had been made by the investors of the company to the Board and that most of those complaints were in regard to non-receipt of interest on debentures and non-receipt of redemption amount on their maturity. It is, thus, clear that the company had withheld the amounts which were due to the investors. It is true that the company was making losses but then the amount that became due to the debenture holders had to be paid and it was paid only after the Board initiated action. As found by the adjudicating officer there was labour unrest in the factory premises and the officers of the company had been gheraoed as a result of which they could not have access to the records. This was one of the reasons for the delay in redressing the grievances of the investors. It is undoubtedly a mitigating factor and therefore the adjudicating officer was justified in imposing a paltry sum of Rs. 15,000/- by way of penalty. In this view of the matter, no fault can be found with the impugned order.
4. In the result, the appeal fails and the same stands dismissed with no order as to costs.
Member
R.N. Bhardwaj