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TMI Blog2015 (4) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Admittedly, disclosures made to the Stock Exchange under regulation 29(1) and regulation 29(2) of SAST Regulations, 2011 were delayed by 120 and 128 days respectively. As noted earlier, penalty for violating regulation 29(1) at the rate of ₹ 1 lac per day would be more than ₹ 1 crore. Similarly, penalty for violating regulation 29(2) at the rate of ₹ 1 lac per day would be more than ₹ 1 crore. As against the above, after considering all mitigating factors, AO has imposed composite penalty of ₹ 4.5 lac which cannot be said to be excessive or unreasonable. Argument of appellant that the delay was unintentional and that the appellant has not gained from such delay and therefore penalty ought not to have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and regulation 29(2) read with regulation 29(3) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011( SAST Regulations, 2011 for short) and regulation 13(1) and regulation 13(3) read with regulation 13(5) of the Securities and Exchange Board of India (Prevention of Insider Trading) Regulations, 1992 ( PIT Regulations, 1992 for short). 2. Facts relevant to this appeal are that prior to February 14, 2013 appellant held 94,71,709 shares of SRS Real Infrastructure Limited ( SRS for short) representing 4.71% shares of the total equity shares issued by SRS. Pursuant to a scheme of amalgamation approved by the Delhi High Court the shareholders of SRS including appellant became enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er regulation 29(1) of SAST Regulations, 2011, however, it was delayed by 120 days. Similarly, disclosures made under regulation 29(2), was delayed by 128 days. No disclosure was made to the company as provided under regulation 29(1),(2) and (3) of SAST Regulations, 2011. Similarly, there is no evidence on record to show that disclosures were made under regulation 13(1) and regulation 13(3) read with regulation 13(5) of PIT Regulations, 1992. 7. On a show cause notice issued by SEBI, appellant filed its reply denying the allegations made in the show cause notice. Thereafter, opportunity of personal hearing was granted to the appellant, but inspite of repeated opportunities appellant failed to appear and therefore, by impugned order the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of SEBI Act. In respect of delay in making disclosures penalty imposable at the rate of ₹ 1 lac per day under Section 15A(b) of SEBI Act would be ₹ 1 crore. However, after considering all mitigating factors AO has imposed penalty of ₹ 4.5 lac which cannot be said to be excessive, harsh or unreasonable. 10. We have carefully considered rival submissions. 11. Obligation to make disclosures under the provisions contained in SAST Regulations, 2011 as also under PIT Regulations, 1992 would arise as soon as there is acquisition of shares by a person in excess of the limits prescribed under the respective regulations and it is immaterial as to how the shares are acquired. Therefore, irrespective of the fact as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the regulations are violated and that penal liability is neither dependent upon intention of parties nor gains accrued from such delay. Secondly, taking above factors as mitigating factors, AO has imposed penalty of ₹ 4.5 lac as against the liability of ₹ 1 crore each imposable for violations committed under regulation 29(1) and 29(2) of SAST Regulations 2011. Similarly, fact that additional shares were not received on account of any positive act on part of appellant is also untenable, because, liability to make disclosure arises once the shareholding of a person exceeds the limits prescribed under SAST Regulations, 2011 and PIT Regulations, 1992, irrespective of the mode and the manner of acquiring those shares. 14. Decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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