9911796707
TMI Blog1999 (5) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... lid for three years, on its expiry in 1998 the appellant sought renewal of the same by submitting requisite application with details. However, from the particulars furnished, the respondent felt that the appellant had not fulfilled the requirements of the condition attached to the certificate mandating compliance of the statutory requirement of entering into an agreement with the issuer companies detailing specific particulars as provided for in the regulations. The matter was therefore referred for enquiry and adjudication. The Adjudicating Officer after enquiry adjudged the appellant guilty of the charge and imposed Rs. 25,000 as penalty. 3. Penalty amount of Rs. 25,000 has been deposited with the Tribunal as required under rule 9 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant had not fulfilled the condition subject to which the registration was granted. Compliance of the requirements of rule 4( a ) and regulation 14 is mandatory. Referring to the documentary evidence relied upon by the appellant, it was pointed out that the consent letters, instructions, etc. were not agreements and the instructions from the Issue Registrar to the appellant cannot be consid- ered as agreement between the appellant and the issuer company as Registrar is a third party. According to the respondent exchange of correspondence does not constitute any agreement. Since the appellant had failed to comply with the requirements of regulation 14, the Adjudi-cating Officer was justified in imposing penalty of Rs. 25,000. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f offence is the incidence for imposing penalty. Commission of offence, is relatable to each failure of the appellant to enter into requisite agreement with the issuer companies in respect of each public issue to which the appellant had acted as a Banker. But the notice is silent about the appellant's failure in respect of the specific public issues to which the appellant acted as Issue Banker. Show-cause notice should be self speaking and not an abstract one debilitating the person charged with the offence to properly meet the charge. It is understood that the appellant had acted as Banker to about 50 public issues during the period 1-4-1996 to 31-3-1997 and the list of those public issues was made available to the Adjudicating Officer. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations and application monies received from the investors investing in an issue of a body corporate will be forwarded to the registrar to an issue or the body corporate, as the case may be; ( c )that a daily statement will be sent by the designated controlling branch of the bankers to the issue to the registrar to an issue indicating the number of applications received on that date from the investors investing in the issue of a body corporate, and the amount of application money received. 8. Before going into the merits of the impugned order, I consider it necessary to briefly explain the legal position relating to the status of the statutory rules and regulations and the legality of agreements made through exchange of letters, raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letters no agreement can be brought into existence as putforth by the respondent is not correct. 10. Adjudicating Officer has dealt with public issues made by three companies and the non-compliance of the regulation by the appellant in those three cases. In the case of public issue made by the IDBI, to which the appellant was acting as Issue Banker, the Adjudicating Officer has observed that: "From the specimen copy of MOU between the bank and IDBI regarding the public issue of IDBI Bonds, it is seen that Clause 3 of Schedule I and Clause 5 of Schedule I, respectively, dealt with the requirement of daily reports by the Bank of collection figures to the Registrar and final certificate by the Bank of collections to the Registrar Schedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eement relating to collection centres. As mentioned during the hearing and at para 5.5( a ) the bank must have issued a letter (setting out the particulars of collection centres) to the issuer corporate body'. In para 5.5( a ) referred to herein it has been stated that 'from copy of the specimen to the bank's reply dated 10-6-1998 it is seen that the bank is communicating to all the issuer companies, the list of designated branches, i.e. collection centres. Exchange of letters constituting agreement on that basis between the banker and the issuer company complies with regulation 14(2)( a ) ibid. But the question is whether the bank in this case had actually issued a letter stating therein the collection centres and the issuer company ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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