9911796707
TMI Blog2012 (12) TMI 1144X X X X Extracts X X X X X X X X Extracts X X X X ..... ulations, 2003 (FUTP Regulations) and imposing a monetary penalty of ₹ 18 lacs under Section 15HA of the Securities and Exchange Board of India Act, 1992 (the Act). The facts giving arise to this appeal, in brief, are as under: The appellant is a stock broker registered with the Board and the Calcutta Stock Exchange. It entered into certain proprietary trades through other brokers in the scrip of Bhansali Engineering Polymers Limited (the Company) during the period May 20, 2003 to August 20, 2003. 3. The Board carried out investigations into buying, selling and dealings in the scrip of the company for the period from May 12, 2003 to October 8, 2003 and noted continuous rise in the price of the scrip from ₹ 9 to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012 was issued to the appellant to show cause as to why enquiry be not held against the appellant and penalty imposed in accordance with the laid down procedure. The appellant replied to the show cause notice after which a personal hearing was granted. The appellant also filed its written submissions denying the charges. After consideration of the material on record, the adjudicating officer passed the impugned order holding the appellant guilty of violating regulation 4(2) (b) of the FUTP Regulations and imposed a penalty of `18 lacs under Section 15HA of the Act. Hence this appeal. 5. We have heard Shri Vinay Chauhan, learned counsel for the appellant and Shri Shiraz Rustomjee, learned senior counsel for the respondent Board and are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l arrangement with the counter party clients and had taken loans for trading heavily in the scrip resulting in price rise without any other fundamental being on record, cannot be said to be genuine transactions. Therefore, we cannot find any fault with the findings of the adjudicating officer that the appellant, while trading heavily in the scrip with connected parties with the loan provided by them and with insufficient net position, has breached the provisions of regulations 4(2) (b) of the FUTP Regulations. 7. It was also argued by the leaned counsel for the appellant that the Board has initiated action against the appellant but no action has been initiated by the Board against the counter parties who had provided finance for its trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spectively has been imposed. The appellant had no financial dealings with them. The adjudicating officer himself has recorded that the Board has not quantified disproportionate gain or unfair advantage which the appellant might have drawn as a result of its default. Therefore, the penalty of ₹ 18 lacs imposed of the appellant is excessive. Learned senior counsel for the Board justified the quantum saying that the same falls within the parameters as laid down under Section 15J of the Act. Admittedly, no action has been initiated by the Board against the counter parties of the appellant who provided finance to the appellant for entering into the trades in question. In a way culpability of the counter parties of the appellant who provide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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