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TMI Blog2015 (10) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... drafted a compilation to show that the company has been making losses so the penalty should substantially be reduced. Held That:- There was seen no merit in the contentions of the Appellant - Disclosures have not at all been made, still the Adjudicating Officer has imposed a penalty of ₹ 5 lac and ₹ 2 lac under Section 15A(b) and Section 15HB instead of ₹ 1crore which cannot be said to be excessively harsh or unreasonable – Penalty is imposable irrespective of the fact that the company/promoter-director have been incurring losses or not - Omission on the part of the appellant was detrimental to the interest of the investors and hence no fault can be found with the decision of SEBI – Decided in favour of the Respondent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company and on the same day i.e. on 29th January, 2013 appellant had sold 45,032 shares of the company. Under Regulations 13(4) and 13(4A) read with Regulation 13(5) of the PIT Regulations it was obligatory on part of the appellant to make disclosure to the company and to the stock exchange in respect of the purchases made on 9th January, 2013 and 29th January, 2013 within two working days from the date of purchase. As the appellant failed to make above disclosures to the stock exchange in which the shares of the company were listed, there was violation of Regulation 13(4) and 13(4A) of the PIT Regulations. Similarly, having purchased shares of the company in January, 2014 entering into opposite transaction i.e. to sell the shares of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce loss caused to the investors due to the default could not be ascertained, the adjudicating officer is not justified in imposing the penalty of ₹ 5 lac under section 15A(b) of SEBI Act. 5. As regards the penalty of ₹ 2 lac imposed under section 15HB of SEBI Act for violating clause 4.2 of the Model Code of Conduct, Mr. Chaterji submitted that the opposite transaction, namely, sale of shares of the company were carried out by the broker of the appellant inadvertently and therefore the adjudicating officer was not justified in imposing penalty of ₹ 2 lac under section 15HB of the SEBI Act. 6. Relying upon the decisions of this Tribunal in case of National Securities Depositories Ltd. vs. SEBI (Appeal no.147 of 2006 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t canvassed before the Adjudicating Officer and it is only after recording those mitigating factors penalty of ₹ 5 lac is imposed as against the penalty of ₹ 1 crore imposable under section 15A(b) of the SEBI Act. The discretion exercised by the adjudicating officer being reasonable we see no reason to interfere with the order passed by the adjudicating officer. 9. Argument advanced by the counsel for the appellant that the opposite transactions i.e. sale transactions were inadvertently carried out by the broker of the appellant cannot be a ground to escape penalty for violating the provisions contained in the Model Code of Conduct. Penalty imposable for such violations under section 15HB of the SEBI Act is up to ₹ 1 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losses year after year and in support of that contentions he wanted to tender various documents in respect thereof. We have not permitted Mr. Chatterji to tender those documents because penalty under section 15A(b) of the SEBI Act for violating the PIT Regulations is imposable irrespective of the fact that the company/promoter-director have been incurring losses or not. Similarly fact that there is no investor losses on account of the violations committed by the appellant and that the violations are not repetitive in nature cannot be a ground to escape penalty imposable section 15A(b)/15HB of the SEBI Act. 12. As rightly pointed out by the adjudicating officer the entire securities market stands on disclosure based regime and accurate an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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