w w w . L a w y e r S e r v i c e s . i n



CG-Vak Software and Exports Limited v/s Securities and Exchange Board of India, SEBI Bhavan


Company & Directors' Information:- R S SOFTWARE (INDIA) LTD. [Active] CIN = L72200WB1987PLC043375

Company & Directors' Information:- C K SOFTWARE PRIVATE LIMITED [Active] CIN = U72501DL2000PTC106184

Company & Directors' Information:- CG VAK SOFTWARE AND EXPORTS LIMITED [Active] CIN = L30009TZ1994PLC005568

Company & Directors' Information:- K K SOFTWARE PRIVATE LIMITED [Active] CIN = U72900DL2009PTC193030

Company & Directors' Information:- A K C SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2004PTC128462

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- P AND P SOFTWARE PRIVATE LIMITED [Active] CIN = U74899DL1994PTC057212

Company & Directors' Information:- SOFTWARE INDIA PRIVATE LIMITED [Active] CIN = U72200GJ1995PTC025791

Company & Directors' Information:- N. D. SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TG1998PTC029778

Company & Directors' Information:- T AND H SOFTWARE PRIVATE LIMITED [Active] CIN = U72200UP2000PTC025638

Company & Directors' Information:- M S SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC133997

Company & Directors' Information:- G A S SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2004PTC127546

Company & Directors' Information:- B B SOFTWARE LTD [Strike Off] CIN = L30009WB1995PLC072361

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- SOFTWARE EXPORTS (INDIA) P LTD [Active] CIN = U72200MH1994PTC077895

Company & Directors' Information:- CG INDIA PRIVATE LIMITED [Strike Off] CIN = U74900PN2011PTC140651

Company & Directors' Information:- H K SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200WB2001PTC093967

Company & Directors' Information:- J SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TZ2000PTC009229

Company & Directors' Information:- K S M SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2004PTC128463

Company & Directors' Information:- R B SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC140322

Company & Directors' Information:- SOFTWARE INDIA PRIVATE LIMITED [Active] CIN = U72200RJ1995PTC010577

Company & Directors' Information:- R J SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC133815

Company & Directors' Information:- BOARD SOFTWARE (INDIA) PRIVATE LIMITED [Active] CIN = U72200MH2007PTC176146

Company & Directors' Information:- I & I SOFTWARE INDIA PRIVATE LIMITED [Strike Off] CIN = U72200TN2005PTC056262

Company & Directors' Information:- D F SOFTWARE INDIA PRIVATE LIMITED [Strike Off] CIN = U72200TZ2003PTC010629

Company & Directors' Information:- E. C. SOFTWARE INDIA PRIVATE LIMITED [Active] CIN = U72900TN2007PTC063486

Company & Directors' Information:- Q 3 INDIA SOFTWARE PRIVATE LIMITED [Active] CIN = U72900TN2007PTC065786

Company & Directors' Information:- K Y SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200DL2005PTC136072

Company & Directors' Information:- T M I SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200KA2005PTC036299

Company & Directors' Information:- B C L SOFTWARE (INDIA) PRIVATE LIMITED [Strike Off] CIN = U30007MH1999PTC117922

Company & Directors' Information:- VAK & VAK COMPANY PRIVATE LIMITED [Strike Off] CIN = U99999TN1956PTC003525

Company & Directors' Information:- VAK EXPORTS PVT LTD [Strike Off] CIN = U51901TN1974PTC006587

Company & Directors' Information:- M I S SOFTWARE PRIVATE LIMITED [Active] CIN = U72200TN2008PTC068694

Company & Directors' Information:- A. T. SOFTWARE PRIVATE LIMITED [Active] CIN = U72200TG1996PTC023841

Company & Directors' Information:- J A K SOFTWARE PVT LTD [Active] CIN = U72200DL2001PTC111929

Company & Directors' Information:- R R SOFTWARE PVT LTD [Under Process of Striking Off] CIN = U72200KL1991PTC006051

Company & Directors' Information:- A M H SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200DL2005PTC132410

Company & Directors' Information:- P D A SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72900DL2003PTC123465

Company & Directors' Information:- K C SOFTWARE PRIVATE LIMITED [Active] CIN = U74899DL1989PTC036923

Company & Directors' Information:- I SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72300MH2012PTC225903

Company & Directors' Information:- J P SOFTWARE AND EXPORTS PRIVATE LIMITED [Active] CIN = U92110MH1999PTC121388

Company & Directors' Information:- V M SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72900PN2010PTC136847

Company & Directors' Information:- H M SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200HP2011PTC031756

Company & Directors' Information:- S N R SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72900DL2012PTC243073

Company & Directors' Information:- C M S SOFTWARE PRIVATE LIMITED [Active] CIN = U74899DL2005PTC142352

Company & Directors' Information:- S M I T SOFTWARE COMPANY PRIVATE LIMITED [Strike Off] CIN = U74899DL2006PTC144816

Company & Directors' Information:- A D SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200KA2002PTC030722

Company & Directors' Information:- SOFTWARE EXPORTS PRIVATE LIMITED [Strike Off] CIN = U72200GJ1994PTC023316

Company & Directors' Information:- H. A. N. R. E. J SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TG2008PTC062044

    Appeal No. 38 of 2014

    Decided On, 23 April 2014

    At, SEBI Securities Exchange Board of India Securities Appellate Tribunal

    By, THE HONOURABLE MR. JUSTICE J.P. DEVADHAR
    By, PRESIDING OFFICER
    By, THE HONOURABLE MR. JOG SINGH
    By, MEMBER & THE HONOURABLE MR. A.S. LAMBA
    By, MEMBER

    For the Appellant: S.K. Jain, Practicing Company Secretary. For the Respondent: Kumar Desai with Ms. Harshada Nagare, Advocates.



Judgment Text

J.P. Devadhar, Presiding Officer

1. Whether the Adjudicating Officer ('AO' for short) of Securities and Exchange Board of India ('SEBI' for short), by impugned order dated December 17, 2013 was justified in imposing penalty of ` 3 lac on appellant under Section 15A(b) of Securities and Exchange Board of India Act, 1992 ('SEBI Act' for short) is the question raised in this appeal.

2. Penalty is imposed on the appellant for allegedly violating regulation 13(6) of the SEBI (Prohibition of Insider Trading) Regulations, 1992 ('PIT Regulations' for short).

3. Under regulation 13(6) of PIT Regulations, every listed company is required to disclose to all Stock Exchanges on which the company is listed, within two working days of receiving information specified under sub-regulations (1),(2),(2A),(3),(4) and (4A) of regulation 13 of PIT Regulations.

4. In the preset case, it is not in dispute that there is 14 days and 31 days delay in making disclosures on receiving information relating to acquisition of shares of the appellant company by its Managing Director Shri G. Suresh. Only dispute is, whether AO is justified in imposing penalty of ` 3 lac on appellant for above delay in making disclosures.

5. Basic argument of appellant is that the delay in making disclosure was unintentional and was on account of its Managing Director, travelling abroad at the relevant time. That argument has been considered by AO and only thereupon penalty of ` 3 lac has been imposed as against penalty of ` 45 lac imposable under Section 15A(b) of SEBI Act, at the rate of `1 lac per day for the delay of 45 days (14 days+31days). In such a case discretion exercised by AO cannot be said to be unreasonable or harsh.

6. Reliance was placed by appellant on the order of Whole Time Member ('WTM' for short) of SEBI dated February 20, 2014 in the appellants own case wherein it is held that for violating regulation 10/11 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ('SAST Regulations, 1997' for short) the WTM of SEBI does not consider it to be a fit case to insist on public announcements under regulation 14(1) of SAST Regulations, 1997. That order has no bearing on the facts of present case, because firstly, in that case the dispute related to compliance of regulation 10/11 of SAST Regulations, 1997 which required making public announcement for acquisition of shares of a company, whereas, in the present case we are concerned with compliance of PIT Regulations, wherein penalty is imposable for non-compliance of PIT Regulations. Secondly, in the very same order relied upon by appellant, WTM of SEBI has held that not insisting on public announcement would not preclude SEBI from taking any other appropriate action at appropriate stage. Therefore, indulgence shown by WTM of SEBI in the aforesaid case has no relevance to the facts of present case where the appellant is seeking further reduction in the penalty imposed by AO for violating PIT Regulations.

7. Reliance placed by appellant on a decision of this Tribunal in Appeal No. 118 of 2013 dated 04.09.2013 (Vitro Commodities Private Limited Vs SEBI) is also misplaced. That case related to violations committed by appellant therein under regulation 13(1) of PIT Regulations which relates to disclosures to be made by a person acquiring shares or voting rights of any listed company in excess of the limits prescribed therein whereas in the present case, we are concerned with violation of regulation 13(6) of PIT Regulations which relate to the disclosures to be made by a listed company to the Stock Exchanges in which the company is listed. Thus the two provisions operate in different fields. Moreover, in that case penalty was reduced by this Tribunal because the appellant therein had not bought any shares of the company and increase in the shareholding of the shares of the company was on account of shares allotted to the appellant therein by way of bonus shares and amalgamation of the company with other companies, due to Court Orders and that the appellant therein believed 'bonafide' that no disclosure was required to be made due to such acquisition of shares. In those circumstances, this Tribunal deemed it fit to reduce the penalty from `10 lac to 1 lac. No such facts exist in the present case. Fact that, Managing Director of the company was travelling abroad at the relevant time cannot be a ground to escape penalty for not making disclosures within the time stipulated unde

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r regulation 13(6) of PIT Regulations. In any event, since AO after considering above facts to be a mitigating factor has taken a lenient view and imposed penalty of ` 3 lac as against penalty of ` 45 lac imposable under Section 15A(b) of SEBI Act, it cannot be said that the impugned order suffers from any infirmity. 8. For all the aforesaid reasons, we see no reason to interfere with the order impugned in this appeal. 9. Accordingly, appeal is dismissed with no order as to costs.
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