9911796707
TMI Blog2023 (5) TMI 1419X X X X Extracts X X X X X X X X Extracts X X X X ..... trades - HELD THAT:- No arguments / submissions was made against the findings given by the AO with regard to the shares being received off- market by noticees no. 1, 2 and 3. No arguments was raised that the receipt of the shares was with consideration or that the finding of the AO that it was received without consideration is incorrect. The violation of spot delivery u/s 2(i) (a) of the SCRA was also not contested. Consequently, the finding of the AO that the shares of the Company Wisec Global Limited were received by noticees no. 1, 2 and 3 without any consideration from a director of the Company Kolluru Surya Prakash Venkata is affirmed. The violation of Section 2(i) read with Regulations 13, 16 and 18 of the SCRA is also affirmed. The f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ades does not suffer from any error of law. The trading pattern of noticees no. 1, 2 and 3 with noticees no. 9, 11 and 12, clearly indicates that these structured trades were done with the intent of creating artificial volumes and misleading appearance of trading with the intent of misleading the investors. Such structured trades were violative of Section 12A of the SEBI Act read with Regulations 3 and 4 of the PFUTP Regulations. The decisions cited by the learned counsel for the appellants are not applicable to the facts of the present case. For the reasons stated aforesaid, we do not find any error in the impugned order. All the appeals fail and are dismissed with no order as to costs. Misc. Application are disposed off accordingly. X X X X Extracts X X X X X X X X Extracts X X X X ..... isition of shares of Wisec Global Limited and that incorrect information in the Delivery Instruction Slip ('DIS') was made stating that off-market transaction was a loan. Noticees no. 1, 2 and 3 have been charged with off-market transaction without payment of consideration and that noticees no. 1 and 2 failed to comply with the summons during the investigation period. Further, noticees no. 1, 2 and 3 along with 9, 11 and 12 created artificial volume and misleading appearance of trading with resulted in the increase in the price during the period September 28, 2016 to June 12, 2017. The allegation was that noticees no. 1, 2 and 3 have violated Section 2(i) read with Section 13, 16 and 18 of the Securities Contract (Regulation) Act, 1956 ("SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spot delivery contract and that showing it as a loan was wholly illegal. The AO also found that the contention of noticee no. 1 that the shares were purchased on behalf of one Vishal Mahesh Waghela and sale proceed were also transferred to him was disbelieved. 5. The AO further found that noticee no. 1 inspite of the receipt of the summons failed to furnish information sought from the summons. Inspite of service, no reply was filed and, therefore, the AO rightly penalized them. 6. The AO further found that noticee no. 1, 2 and 3 were acting as sellers and noticees no. 9, 11 and 12 were buyers and had entered into a structured trade thereby creating artificial / fictitious volume of trading and giving false and misleading appearing of trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they were only sellers and there was no manipulation of the price of the scrip nor was there any structured trades. It was also alleged that there was no connection with the counterparties, namely, noticees no. 9, 11 and 12. Since there was no meeting of mind nor was there any collusion between them. It was also urged, that the penalty imposed was excessive and that lesser penalty has been imposed to similarly situated persons. 10. In support of their contentions, the learned counsels placed reliance in the case of Ketan Parekh vs. Securities and Exchange Board of India, Appeal No. 2 of 2004 decided on July 14, 2006, Nirmal Bang Securities (P.) Ltd. vs. SEBI decided on October 31, 2003, Securities and Exchange Board of India vs Abhijit Raj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch trades increased the price of scrip which was manipulative and violative of Regulations 3 and 4 of the PFUTP Regulations. 14. The contention that there was no manipulation or structured trade is patently erroneous in as much as we find that the trading pattern of the buyers and the sellers was that they traded in close proximity of time inter-se between them. The buy and sell orders were placed within a short time interval varying from 1 minute to 2,3 or 4 minutes. In our view, such trading pattern as found by the AO cannot occur by accident or by coincidence. The trading pattern leads to an inference that there was a meeting of minds with a pre-determined plan and, therefore, there was a collusion between the parties. Such trades execu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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