9911796707
TMI Blog2004 (3) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Sree Krishna Data Centre for its takeover as a going concern from 1 April, 1998, or the date from which the permission of the Securities and Exchange Board of India (SEBI) was received. SEBI s case is that on 21/22 December, 1998, M/s Sree Krishna Data Centre contravened the provisions of rule 4(1)( b ) of the SEBI (Registrar to an Issue and Share Transfer Agents) Rules, 1993 (for short the rules of 1993 ) by acting as a registrar to an issue on behalf of corporate bodies without entering into a valid agreement and also acted as share transfer agents on behalf of few corporate bodies prior to entering into valid agreements with the said corporate bodies. The proceedings were initiated against the company by issuance of show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lleged violation relating to public issue of shares took place much before the company came into existence. In this fact situation, the finding of the Tribunal that the company cannot be held liable cannot be faulted. The Tribunal in the impugned order held thus : "In this context, it is to be noted that the appellant is a distinct legal personality from SKDC. The fact that the appellant had taken over the business of the said SKDC or that Mrs. Padma Sreedharan, the sole proprietor of the said SKDC, is one of the 7 subscribers to the memorandum of association and that she is one of the first directors out of the 4 directors of the appellant is not sufficient to hold that the said SKDC and the appellant are one and the same entity for all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y person to give evidence or to produce relevant or useful document for an inquiry and provides a sequence of the procedure to conduct the inquiry before imposing any penalty. Furthermore, it is also provided in section 15-J to consider various factors while adjudging the question of penalty under section 15-I, after taking into account the amount of disproportionate gain or unfair advantage, whenever quantifiable, loss caused to an investor or group of investors, the repetitive nature of default. These twin sections basically deal with the procedure of monetary penalty under the Act. All these sections 15A, 15B, 15C, 15D, 15E, 15F, 15G, 15H, 15HA and 15HB, provide monetary penalties for respective breaches or non-compliances of provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or punishment as contemplated under criminal proceedings. Therefore, there is no question of proof of any mens rea by the appellants and it is not an essential element for imposing penalty under SEBI Act and the regulations. The penalty imposable under the SEBI Act and the regulations under sections 15-I and 15J is deterrent in nature to see that the parties or person concerned complies with the regulations strictly. The imposition of the penalty under SEBI Act and regulations is civil in nature and cannot be equated with penal in character as referred to and submitted by the respondents and/or observed by the appellate authority. It is also clear that the word penalty has different colours and shades and facets and that has to be inter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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