ORDER OF THE ADJUDICATING OFFICER UNDER SECTION 15- I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995 IN THE MATTER OF SHRI CHANDRAVADAN J. DALAL.
ADJ.ORDER No: ACR/91 OF 2005
1. Vide order dated December 28, 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 read with Sec. 15HA and Sec. 15HB of Securities and Exchange Board of India Act, 1992 for the alleged violation of Reg.4(1), (2) (a), (b), (e) and (n) of SEBI(Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 and for the alleged violation of Clauses A(1), (2), (3), (4) and (5) of the Code of Conduct prescribed under Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992, against Shri Chandravadan J. Dalal, a member of the Stock Exchange, Mumbai who was registered with SEBI under Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992. Initially, Shri K.R.C.V. Seshachalam, Deputy Legal Adviser, SEBI was appointed as the Adjudicating Officer in the instant matter by SEBI and vide proceedings dated August 11, 2004, the said appointment was communicated to Shri K.R.C.V. Seshachalam. Subsequently, vide the aforesaid order dated December 28, 2004, I was appointed as the Adjudicating Officer in the instant matter in place of Shri K.R.C.V. Seshachalam.
2. Vide order dated December 28, 2004, I was also appointed by SEBI as the Enquiry Officer to hold an enquiry against Shri
Chandravadan J. Dalal under Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 for the same violations as detailed above that were allegedly committed by Shri Chandravadan J. Dalal. In the said enquiry proceedings, a show cause notice dated August 25, 2004 under Regulation 6 of SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 was issued to Shri Chandravadan J. Dalal by Shri Avarjeet Singh, Assistant General Manager, Investigations Department, SEBI. Vide letter dated September 17, 2004, Shri Chandravadan J. Dalal filed his written statement to the aforesaid show cause notice denying the allegations leveled against him vide the said show cause notice. In the said written statement, Shri Chandravadan J. Dalal requested the Enquiry Officer to grant a personal hearing. Accordingly, a notice of hearing dated August 25, 2005 in terms of Reg. 9 of Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 was issued to Shri Chandravadan J. Dalal informing him that he may appear for a personal hearing on September 8, 2005 before me. On September 8, 2005 Shri Deepak C. Dalal, son of Shri Chandravadan J. Dalal appeared before me and submitted that his father Shri Chandravadan J. Dalal died on November 29, 2004 and since Shri Chandravadan J. Dalal was the sole proprietor of the broking business, the proceedings may be dropped in the instant matter. I advised Shri Deepak C. Dalal to file documentary evidence in support of his submission that his father was no more alive. Vide letter dated September 12, 2005, Shri Deepak C. Dalal forwarded a certified true copy of the death certificate dated December 6, 2004 issued by the Municipal Corporation of Greater Mumbai. Shri Deepak C. Dalal also filed a copy of the order passed by the Hon’ble Securities Appellate Tribunal on June 15, 2005 in appeal No. 35/2004. I perused the above documents filed by Shri Deepak C. Dalal. As per the death certificate issued by the Municipal Corporation of Greater Mumbai, Shri Chandravadan J. Dalal died on November 29, 2004 at Mumbai. As per the aforesaid order passed by the Hon’ble Securities Appellate Tribunal, the appeal preferred by Shri Chandravadan J. Dalal against the directions of SEBI debarring him from accessing the capital market for a period of two years was abated due to his death.
3. In view of the fact that Shri Chandravadan J. Dalal against whom the instant adjudication proceedings were ordered by SEBI died on November 29, 2004, which was brought to my notice during the enquiry proceedings, I am of the view that no show cause notice in terms of Rule 4(1) of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules 1995 can be issued in the instant matter nor adjudication can be conducted.
ORDER
4. Accordingly, the instant adjudication proceedings against the late Shri Chandravadan J. Dalal are terminated without any decision on the merits since the said proceedings are penal and are personal in nature.
5. In terms of Rule 6 of the SEBI (Procedure for holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995, a copy of this order is sent to the to SEBI. A copy of the order is also sent to Shri Deepak C. Dalal, son of the late Shri Chandravadan J. Dalal for information.
Place: Mumbai A. Chandra Sekhar Rao
Date: September 15, 2005 Adjudicating Officer