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TMI Blog2013 (11) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the appellant cannot be held guilty of violating a substantive provision which came into force on September 9, 2002 for an alleged violation which took place on April 9, 2001 and May 8, 2001 - passing of the impugned order relying on a provision clearly inserted post the happening of the alleged violation exhibits a sort of pre-conceived inclination on the respondent's part to impose a penalty on the appellant without really considering whether or not such an act of the respondent might be sustained in law - Decided in favour of appellant. - Appeal No. 35 of 2013 - - - Dated:- 27-8-2013 - J.P. DEVADHAR, JOG SINGH AND A.S. LAMBA, JJ. For the Appellant : Gaurav Joshi, Ms. Neeta Jain and Manish Chhangani. For the Respondent : Dr. Mrs. Poornima Advani, Ajay Khaire and Ms. Virakthi Hegde. ORDER:- PER : Jog Singh By way of present appeal the appellant is challenging the impugned order dated December 19, 2012 passed by the respondent imposing a penalty of Rs. 2,50,000/- on the appellant under the provisions of Section 15A(b) of the SEBI Act, 1992 read with Regulation 7 of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 ('SAST Regulati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t not only did it duly inform the company, but by way of abundant precaution it also informed the ASE of the acquisition in question. 6. The respondent did not find this reply convincing and as such instituted and commenced adjudication proceedings against the appellant as per the procedure enshrined in the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995. After conducting and finalizing the proceedings in question, the learned Adjudicating Officer ('AO') by way of impugned order dated December 19, 2012 came to the conclusion that the appellant was guilty of violating Regulation 7 of the SAST Regulations, 1997 and imposed a penalty of Rs. 2,50,000/- for the said violation. 7. Before looking into the merit of the matter, we feel it appropriate to resolve the issue as to whether the acquisition of shares of PPL by the appellant on April 9, 2001 and May 8, 2001 would attract the provisions of the unamended Regulation 7 of the SAST Regulations, 1997 or the amended provisions brought into force w.e.f. September 9, 2002. For the sake of convenience the unamended and amended provisions of Regulation 7 of the SAST Regulations, 1997 are her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the unamended provisions of SAST Regulations, 1997 which were in vogue on the relevant dates i.e. April 9, 2001 and May 8, 2001 when the appellant admittedly acquired 2,50,000 shares and 3,50,000 shares, respectively of PPL. Undoubtedly, the amended Regulations which brought into existence the requirement of intimating to the stock exchange regarding the acquisition was also introduced in addition to the earlier requisite of making such disclosure to the concerned company whose shares were sought to be acquired by a person. It is, therefore, clear that the appellant cannot be held guilty of violating a substantive provision which came into force on September 9, 2002 for an alleged violation which took place on April 9, 2001 and May 8, 2001. No retrospective effect is given to the amended Regulation 7 of the SAST Regulations, 1997. In fact it appears that the passing of the impugned order relying on a provision clearly inserted post the happening of the alleged violation exhibits a sort of pre-conceived inclination on the respondent's part to impose a penalty on the appellant without really considering whether or not such an act of the respondent might be sustained in law. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds makes it abundantly clear that the appellant has duly informed the company as well as the ASE of this acquisition of 6 lakh shares which amounted to about 11.6% of the total paid-up capital of PPL. In this connection, letter dated May 8, 2001 addressed to ASE has been brought on record by way of Exhibit - 'B' annexed with the Misc. Application no. 83 of 2013. Similarly, the UCP receipt dated May 8, 2001 is also annexed by the appellant on page 9 of the said Misc. Application. These documents were also produced before the learned AO by the appellant during the adjudication proceedings but the same have been ignored and not taken into consideration while passing the impugned order against the appellant. Similarly, we note from the records that neither the company nor the stock exchange has disputed the receipt of such disclosure through postal services. Moreover, as discussed earlier it is evident that the mandatory requirement of disclosing relevant information at every single stage of the acquisition after the 5% benchmark is crossed, viz., ten percent or fourteen percent or fifty four or seventy four percent, was introduced only w.e.f. September 9, 2002. The respondent seems t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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