Order against Smt. Pushpa Agarwal

1. Vide order dated July 15, 2004, issued by Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’), I was appointed as the Adjudicating Officer under Rule 3 of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 to enquire into and to adjudge under Sec.15-I of Securities and Exchange Board of India Act, 1992, the alleged violation of 11C of Securities and Exchange Board of India Act, 1992 against Smt. Pushpa Agarwal having its address at 5/2V, Panditya Road, Kolkata – 700 029. For the sake of convenience, the said Smt. Pushpa Agarwal will be referred hereinafter in this order as ‘the noticee’.
   
    
2. As per the information provided to me by SEBI, SEBI conducted investigation in to the alleged price manipulation in the scrip of Globe Stock & Securities Ltd., During the course of the said investigation, the investigating authority of SEBI issued summons dated May 05, 2003 and May 20, 2003 directing the noticee to furnish the information/ documents specified in the annexures to the said summonses.  Along with her reply, the noticee forwarded copies of certain documents and information which were demanded by the investigating authority vide its summonses. The investigating authority advised M/s. Ballabh Dass Daga, Member, Calcutta Stock Exchange to deliver the summonses to the noticee. Vide letter dated September 17, 2003, the said member confirmed that the aforesaid summonses were served on the noticee.
   
    
3. It was alleged that there was no compliance of the aforesaid summonses by the noticee. 
   
    
4. In view of the above, I issued a notice dated December 15, 2004 to the noticee under Rule 4(1) of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 calling upon the noticee to show cause as to why an inquiry should not be held against it and penalty be not imposed under Sec. 15A (a) of Securities and Exchange Board of India Act, 1992. The said notice dated December 15, 2004 was sent to the noticee by registered post acknowledgment due which was duly acknowledged by the noticee. The noticee vide its letter dated nil received by my office on December 28, 2004 submitted interalia that the non compliance of summonses took place due to non receipt of the summonses by her. Hence, the noticee requested that no penalty should be imposed on her. The noticee also submitted address for further correspondence viz., Pushpa Agarwal, 5/2V, Panditiya Road, Kolkata – 700 029. Along with her reply, the noticee forwarded copies of certain documents and information which were demanded to the investigating authority vide its summonses.
   
    
5. On receipt of reply from the noticee, vide letter dated January 5, 2005, my office advised M/s. Ballabh Dass Daga to furnish documentary evidence in support of their claim that the summonses were served on the noticee. In reply, M/s. Ballabh Dass Daga, vide letter dated Janary 12, 2005 submtited to that effect that the acknowledged copies of summonses were furnished to the Eastern Regional Office of SEBI at Kolkata. In terms of Rule 4(3) of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995, a notice of inquiry dated February 25, 2005 was issued to the noticee, fixing March 18, 2005 as the date of inquiry. The said notice was sent by Speed Post with acknowledgement due which was duly acknowledged by the noticee.

6. On March 18, 2005, Shri Avinash Kumar Jha, authorised representative of the noticee appeared before me for inquiry and made his submissions. The authorized representative in his submissions reiterated the contentions of the noticee raised through her letter issued in response to the show cause notice issued by me. The authorised representative further submitted that the noticee never received the summons issued by the investigating authority of SEBI and therefore the question of compliance did not arise. On being shown a copy of letter dated January 12, 2005 received from M/s Ballabh Dass Daga, Member, Calcutta Stock Exchange, the authorized representative maintained that no summonses issued by the investigating authority were received by the noticee. The undersigned issued a notice under Rule 4(6) of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalty by Adjudicating Officer) Rules, 1995 dated May 19, 2005 to the Eastern Regional Office of SEBI at Kolkata, requesting it to furnish the copies of summonses containing the acknowledgment of the notice. In reply, the Eastern Regional Office of SEBI at Kolkata, vide letter dated May 20, 2005, informed that M/s. Ballabh Dass Daga, member, CSE did not submit acknowledged copies of the summonses issued to the noticee and however, the said member confirmed vide letter dated September 17, 2003 that the summonses to the noticee were delivered by him. A copy of the said letter dated September 17, 2003 has been forwarded along with the letter.

7. It was alleged by SEBI that the noticee failed to comply with the summonses dated May 05, 2003 and May 20, 2003 was issued by the investigating authority as mentioned above.   The noticee contended that the summonses dated May 05, 2003 and May 20, 2003 were not received by it.  From the letter dated May 20, 2005 issued by the Eastern Regional Office of SEBI, it is clear that there is no documentary evidence on record to prove that the summonses issued to the investigating authority were received by the noticee except the letter dated September 17, 2003 received from M/s. Ballabh Dass Daga. I have perused the said copy of letter dated September 17, 2003 issued by M/s. Ballabh Dass Daga which is a mere confirmation of delivering summons on various persons including the noticee. However, the said letter does not give any details like date of service, the person to whom it was served etc., In the absence of any acknowledgement of receipt of summonses by  the noticee or an adult member of her family it cannot be conclusively proved that  the summonses were served on the noticee. No reliance can be placed on the letter dated September 17, 2003 issued by M/s. Ballabh Dass Daga in view of the contention of the noticee that she never received the summonses issued by the Investigating Authority. Therefore, I conclude that SEBI does not have any unimpeachable documentary evidence to show that the summonses issued by the investigating authority were served on the noticee and therefore, I am inclined to give a benefit of doubt to the noticee.  Since, the service of summonses on the noticee is not established, no charge for non- compliance with the same is sustainable.

1. In view of the fact that sufficient documentary evidence is not available with SEBI to prove that the summonses dated May 05, 2003 and May 20, 2003 were served on the noticee, it cannot be held that the noticee committed any violation of law by not complying with the said summonses.

 ORDER

1. Since the failure of producing the documents before the Investigating Authority of SEBI by the noticee in response to the summonses is not established, the question of imposing any penalty on her does not arise. Therefore, no monitory penalty is imposed on the noticee, Smt. Pushpa Agarwal.

1.  In terms 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 the noticee and also to Securities and Exchange Board of India.

Date: May 20, 2005                                                                    A. Chandra Sekhar Rao

Place: Mumbai                                                                           Adjudicating Officer