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
For the Appellants: Vijay Tiwari, Practicing Company Secretary. For the Respondent: Mihir Mody, Advocate with Pratham V. Masurekar, Advocate.
J.P. Devadhar, Presiding Officer (Oral)
1. This appeal is filed to challenge adjudication order passed by Adjudicating Officer ('AO' for short) of Securities and Exchange Board of India ('SEBI' for short) on April 23, 2014, whereby penalty of Rs.3 lac has been imposed upon appellants jointly and severally for violating regulation 30(1) and 30(2) read with regulation 30(3) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ('SAST Regulations, 2011' for short).
2. Authorized Representative of appellants has fairly stated before us that in the present case there is no dispute that the declaration filed under regulation 30(1) and 30(2) read with regulation 30(3) of SAST Regulations, 2011 is delayed by 15 days. However, he submitted that imposition of penalty of Rs.3 lac upon the appellants is unjustified for the following reasons:
a) Appellants who are current/ existing promoters have acquired the company in the year 2011-2012. Although all regulatory requirements were duly complied with declaration under regulation 30(1) and 30(2) read with regulation 30(3) of SAST Regulations, 2011 were delayed by 15 days due to lack of proper advise from professional consultants.
b) In all the subsequent years declarations have been made within the stipulated time and therefore inadvertent delay of 15 days in the initial year deserves to be condoned.
c) There was no fraudulent intention or improper motive behind the delay in making disclosures.
d) There are no complaints from any investors claiming loss as a result of delayed disclosure.
e) Disclosures made in compliance with the provisions contained in the listing agreement contained all particulars that are required to be made under regulation 30(1) and 30(2) read with regulation 30(3) of SAST Regulations, 2011 and therefore delay of 15 days being only a technical delay, lenient view ought to have been taken by the AO.
3. We see no merit in the above contentions. Obligation to make disclosures under regulation 30(1) and 30(2) read with regulation 30(3) of SAST Regulations, 2011 is mandatory and is independent of the obligation to make disclosures under the listing agreement. Similarly, fact that proper advise was not there or that the delay was unintentional/without any fraudulent intention or there is no complaint from the investors, does not absolve appellants from their obligation to make disclosures under SAST Regulations, 2011.
4. Penalty imposable under Section 15A(b) of SEBI Act, 1992 for violations of SAST Regulations, 2011 is Rs.1 lac for each days delay. In the present case, since there is 15 days delay, penalty imposable under Section 15A(b) of SEBI Act, 1992 would come to Rs.15 lacs. However, the AO of SEBI after taking into consideration
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all mitigating factors has imposed penalty of Rs.3 lac on appellants jointly and severally which cannot be said to be unreasonably or excessively high. 5. In view of the matter, we see no reason to interfere with the order passed by the AO. Accordingly, appeal is dismissed with no order as to costs.