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2021 (8) TMI 1397 - SECURITIES APPELLATE TRIBUNAL, MUMBAIViolations of disclosure requirements in terms of SAST Regulations and SEBI ‘PIT Regulations 1992’ read with SEBI ‘PIT Regulations 2015’ - SEBI found irregularities in the scrip of the Company - off market transactions - Manner of creating pledge or hypothecation - appellant submitted that the transfer of the shares to the appellant later on would not amount to purchase of shares - HELD THAT:- As per Section 10 of the Depositories Act, 1996 a person in whose name the shares are recorded with the depository is deemed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner. Tribunal considered the provisions of Section 150 of the Companies Act which requires every company to keep a register of its members and enter therein their particulars of shares held by them, as referred to in the section. Further survey of various relevant provisions was taken. Ultimately, it was held that the submissions that retransfer of the shares by the Bank to the appellant therein would not amount to acquisition of the shares cannot be accepted. It was held that such arguments would mean circumventing Takeover Code and Regulation 58 of the Depository Regulations, which cannot be permitted. It was further found that when the law prescribes course for creation of a pledge of shares, the parties cannot agree to create a pledge contrary to the SAST Regulations. Considering all these facts the contention of the appellants was negativated and the appeal against the order of the respondent SEBI was dismissed. Taking into consideration all these factors and the law as crystallized, in our view, the submissions of the appellants cannot be accepted. It is an admitted fact that the shares were transferred to the concerned noticees. Thereafter the shares were again transferred in the demat accounts of the appellants in the similar fashion. Appellants have thus violated the provisions of the regulations detailed above. The order of the AO, therefore cannot be faulted. As regards the issue of delay in launching the proceedings, we find that no plea is taken that the delay has caused any prejudice. Delay simpliciter, if any would not lead us to quash the proceedings initiated by SEBI. As regards the quantum of penalty, the learned AO has imposed the penalty against the Appellants of Rs. 10 lakh under Section 15H of SEBI Act jointly and severally, under Section 23H of SCRA of Rs. 10 lakh each and Rs. 10 lakh only on the Appellant no. 1 under Section 15A(b) of the SEBI Act. Considering the fact that the violations were made on several occasions as detailed in the impugned order, we do not find any reason to interfere in the impugned order in this regard also. The appeal is therefore dismissed.
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