IN THE SECURITIES APPELLATE TRIBUNAL

MUMBAI

 

Appeal No: 121 of 2004

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Date of Hearing	06/12/2004
Date of Decision	06/12/2004

 

In the matter of

	Appellant � Represented by:
Dinesh D. Doshi	Mr. Ajay Khandhar with Mr. Jayant Gaikwad, Advocates
Versus
Securities and Exchange Board of India		Respondent- Represented by
	Mr. Dipan Merchant, Advocate

 

CORAM

 

��������� Justice Kumar Rajaratnam, Presiding Officer

��������� Dr. B. Samal, Member

��������� N.L. Lakhanpal, Member

 

 

Per:��� Justice Kumar Rajaratnam, Presiding Officer

 

 

1.                  The appeal is taken up with the consent of parties.

2.                  The appellant challenges the order dated 15/04/2004 passed by the Adjudicating Officer, SEBI the operative portion of which reads as under:

�I hereby, therefore, impose a penalty of Rs. 2,00,000/- (Rupees two lakhs only) on Shri Doshi, for violation of Section 11C(2) of the said Act, under Clause (a) of Section 15 A of the said Act. Shri Doshi shall pay this amount of penalty of Rs. 2,00,000/- by way of Demand Draft drawn in favour of Securities and Exchange Board of India, Mumbai immediately on receipt of this order.�

3.                  The appellant was a Director of CDP Fincap Private Limited, Rijuta Fincap Private Limited and M/s. Damayanti Fincap Private Limited. The summons was issued to the appellant as a Director of the company as certain information with regard to CDP Fincap Private Limited, Rijuta Fincap Private Limited and M/s. Damayanti Fincap Private Limited.� First time the summons was not served on the appellant and the second time the summons were served on the appellant and the appellant submitted that he had already resigned from the company. On the basis of this reply the adjudicating officer imposed a penalty of Rs. 2 lakhs for violation of 11C(2) of the Act under Clause (9) of Section 15A of the Act.

4.                  The learned counsel for the appellant submitted that the summons was not issued to the Director in his capacity as a Director and the summons was issued to the Company. The address of the company is 1208 Maker Chamber V. It is further submitted that no summons was issued against the appellant asking him to produce any information, notwithstanding that the appellant had resigned from the Board of Directors w.e.f. 4^th December, 1988. The show cause notice is dated 28/11/2003.� Not withstanding the fact that the notice was not served on the company the stand of the appellant was that he had resigned from the company and he had absolutely no information about the company after so many years.� The learned Counsel for the respondent submitted that the Form 32 was not produced before the adjudicating officer and if the form was produced the adjudicating officer would have been in a better position to dispose of the matter. The Form 32 has been produced before us which clearly indicates that the appellant had resigned from the Board of Directors of CDP Fincap and Leasing Private Limited, Rijuta Fincap Private Limited and M/s. Damayanti Fincap Private Limited on 04/12/1998. The proper cause action would have been to remand this matter to the adjudicating officer for the appellant to furnish the details before him.� However, on a broad consonance these documents have been produced before us would lead us to dispose of the matter without the matter being remanded. The appellant having not produced the Form 32 before the adjudicating officer is undoubtedly liable for some token penalty.� In that view of the matter the penalty is reduced from Rs. 2 lakhs to Rs. 10,000/-. The amount has to be deposited with the respondent within 4 weeks from the receipt of this order.

5.                  It is also made clear that if the respondent seeks any further information about the company the appellant shall faithfully answer the enquiry so made about.

6.                  No order as to costs.

(Pronounced in Court)

 

(Justice Kumar Rajaratnam) Presiding Officer
(Dr. B. Samal) Member	(N.L. Lakhanpal) Member

 

Place: Mumbai

Date: 06/12/2004

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