Misc. Application No. 70 of 2014 and Appeal No. 175 of 2014. Case: Virat Sevantilal Shah Vs Securities and Exchange Board of India. Securities and Exchange Board of India
| Case Number | Misc. Application No. 70 of 2014 and Appeal No. 175 of 2014 |
| Counsel | For Appellant: Rajesh Khandelwal, Advocate and For Respondents: Kumar Desai, Advocate and Pratham V. Masurekar, Advocate |
| Judges | J.P. Devadhar, J. (Presiding Officer), Jog Singh and A.S. Lamba, Members |
| Issue | Securities And Exchange Board Of India Act, 1992 - Section 15A(b) |
| Judgement Date | July 15, 2014 |
| Court | Securities and Exchange Board of India |
Judgment:
J.P. Devadhar, J. (Presiding Officer)
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Three appellants namely, Virat Shah, Alok Shah and Rajan Shah, have filed this appeal to challenge adjudication order dated December 27, 2013 passed by Adjudicating Officer ("AO" for short) of Securities and Exchange Board of India ("SEBI" for short), whereby composite penalty of ` 5 lac has been imposed upon all three appellants for violating regulation 7(1) read with regulation 7(2) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997 ("SAST Regulations, 1997" for short) and regulation 29(2) read with regulation 29(3) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 2011 ("SAST Regulations, 2011" for short).
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Counsel for appellants fairly admitted that there is delay in making disclosures as contemplated under SAST Regulations, 1997 as also SAST Regulations, 2011. However, counsel for appellants submitted that since delay in making disclosures is only two days in one transaction and 6 days delay in another transaction AO ought to have taken a lenient view and ought not to have imposed heavy penalty of ` 5 lac, especially when delay was marginal and that there was no mala fide intention. Counsel for appellants further submitted that due to delay in making disclosures, neither the appellants have made any unfair gain nor any loss is caused to any investors due to non-disclosure. Moreover, shares of the company were suspended from trading during the period from January 6, 1997 to February 16, 2012 in the Stock Exchanges. Accordingly, counsel for appellants submitted that the penalty imposed upon appellants deserves to be deleted.
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We see not merit in the above contentions. It is not in dispute that making disclosures under SAST Regulations, 1997 and SAST Regulations, 2011 is mandatory. Penalty for making non disclosures under Section 15A(b) of Securities and Exchange Board of India Act, 1992 ("SEBI Act, 1992 for short) is at the rate of ` 1 lac per day.
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In the present case, in respect of first transaction dated February 28, 2011 involving acquisition of 4,78,200 shares of the company (9.54%), due date for compliance was March 2, 2011, but was complied on March 4, 2011 i.e., after delay of two days.
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Similarly, in respect of second transaction dated September 30, 2012...
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