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TMI Blog2020 (3) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... thin two working days - HELD THAT:- Whenever a share which is pledge is invoked meaning thereby the shares are sold, the necessary consequence which follows is the reduction in the shareholding of that particular entity. In the instant case, whenever the pledged shares of a particular appellant was invoked, there was a change in the shareholding of that appellants and, consequently, the appellants under Regulation 29(2) read with 29(3) was required to disclose the change in the shareholding within two working days of the revocation of the shares to the stock exchange as well as to the target company. Admittedly, as per the chart indicated after paragraph 21 of the impugned order, no disclosures were made by the appellants. A perusal of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y imposed was justified. We also find that when the pledge was revoked, the said revocation also triggered the requirement to make the disclosures under Regulation 31(2) and 31(3) of the SAST Regulations which again was not made by the Appellant No. 1. Order of the AO is affirmed with the modification that the penalty of ₹ 15 lacs imposed upon the Appellant No. 1 for violation of Regulation 29(2) read with 29(3) is reduced to ₹ 10 lacs. All other imposition of penalties against the appellants are affirmed. The appeal is partly allowed to the extent stated aforesaid. - Appeal No. 173 Of 2018 - - - Dated:- 18-10-2019 - Justice Tarun Agarwala, Presiding Officer, Dr. C.K.G. Nair, Member And M.T. Joshi, Judicial Member So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn as S. Kumars Nationwide Ltd. Accordingly, a show cause notice was issued indicating that the appellants being promoters of the company had carried on pledge related transactions and off-market transfers in the scrip without making the necessary disclosures and consequently, violated Regulations 29 and 31 of the SAST Regulations and Regulation 13 of the PIT Regulations. 3. The appellants were accordingly, directed to show cause as to why enquiry should not be held and penalty should not be imposed under section 15A(b) of the SEBI Act. The AO after considering the replies of the appellants and after considering the submissions passed the impugned order imposing a cumulative penalty of ₹ 50 lacs on the appellants. The appellants be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be specified 29(3) The disclosures required under sub-regulation (1) and sub-regulation (2) shall be made within two working days of the receipt of intimation of allotment of shares, or the acquisition of shares or voting rights in the target company to,- (a) every stock exchange where the shares of the target company are listed; and (b) the target company at its registered office. 6. The penalty has been imposed for violation of Regulation 29(2) and 29(3) which provides that an acquirer who holds shares or voting rights entitling them to 5% or more of the shares or voting rights in the target company shall disclose every acquisition or disposal of shares representing 2% or more within two working days. The chart after para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant No. 1 Anjaneya Holdings Pvt. Ltd. that when their share pledges were invoked on August 28, 2012 and November 2, 2012, the percentage of the shareholding was less than 2% being 1.21% and 1.82% respectively. Thus, for the said two transactions penalty under section 29(2) and 29(3) could not be invoked to that extent. The said appellant Anjaneya Holdings Pvt. Ltd. is entitled for relief. Other transactions of all the appellants describing violation for non-disclosure under Regulation 29(2) and 29(3) does not suffer from any error and the order of the AO to that extent is maintained. 9. Penalty has also been imposed for violation of Regulation 13(4A) and 13(5) of the PIT Regulations. For facility, the provisions of Regulation 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agreement or under sub-regulation (2A) or under this sub-regulation, and the change exceeds ₹ 5 lakh in value or 25,000 shares or 1% of total shareholding or voting rights, whichever is lower. 13(5) The disclosure mentioned in sub-regulations (3), (4) and (4A) shall be made within two working days of : (a) the receipts of intimation of allotment of shares, or (b) the acquisition or sale of shares or voting rights, as the case may be. 10. The contention of the appellants that there was no requirement of a disclosure under the PIT Regulations as the said Regulations were not applicable to encumbrances made since there were no such provisions for disclosure of shares which were pledged. The contention of the appellants is p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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