Securities Appellate Tribunal
Thyrocare Diagnostics Private Limited vs Sebi on 28 January, 2016
Author: J.P. Devadhar
Bench: J.P. Devadhar
BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Date of Decision : 28.01.2016
Appeal No. 304 of 2014
Thyrocare Diagnostics Private Limited
D/37-1, TTC Industrial Area,
MIDC, Turbhe,
Navi Mumbai - 400 703. ...Appellant
Versus
Securities and Exchange Board of India,
SEBI Bhavan, Plot No. C-4A, G-Block,
Bandra-Kurla Complex, Bandra (East),
Mumbai - 400 051. ...Respondent
Mr. T.J. Pandian, Advocate for the Appellant.
Mr. Kumar Desai, Advocate with Mr. Saurabh Bachhawat and Ms. Shruti
Chiniwar, Advocates i/b K. Ashar & Co. for the Respondent.
CORAM : Justice J.P. Devadhar, Presiding Officer
Jog Singh, Member
Per : J.P. Devadhar (Oral)
1.This appeal is filed against the order passed by the Adjudicating Officer of Securities and Exchange Board of India ('SEBI' for short) on June 24, 2014. By the said order, penalty of Rs. 10 lakh is imposed against the appellant under Section 15A(b) of SEBI Act for violating regulations 7(1) and 7(1A) read with regulation 7(2) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ('SAST Regulations, 1997' for short) read with Regulation 35 of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ('SAST Regulations, 2011' for short). 2
2. In the impugned order it is held that the appellant has committed three violations relating to three transactions. Firstly, it is held that on March 31, 2005 the appellant sold 8,000 shares of Eins Edutech Limited ('EEL' for short) which triggered disclosure obligation under regulation 7(1A) of SAST Regulations, 1997 and the appellant complied with the said obligation after delay of 53 days. Secondly, it is held that on March 8, 2010, the appellant acquired 58,000 shares of EEL and complied with the disclosure obligation under regulation 7(1A) after a delay of one day. Thirdly, it is held that on September 18, 2010 the appellant sold 86,100 shares of EEL but failed to make disclosures as contemplated under regulation 7(1A) of the SAST Regulations, 1997.
3. As regards the first two violations are concerned counsel for SEBI fairly states that since the said two violations were covered under the consent order dated July 13, 2011, penalty imposed against the appellant in respect of those two violations would not be sustainable. This Tribunal has consistently held that where a violation under a particular provision is subjected to a consent order, then, it is not open to the Adjudicating Officer to impose penalty for the same violation under some other provision. In the present case, admittedly, in respect of the first two violations, proceedings were initiated against the appellant under regulation 3(3) and 3(4) of SAST Regulations, 1997 and on filing consent application the said violations have been settled on payment of settlement charges of Rs. 2,50,000 as per consent order dated July 31, 2011. Therefore, once the two violations are settled, the appellant cannot be penalised once again for the said two violations under regulation 7(1) & 7(1A) of the SAST Regulations, 1997. In other words, once the violations are settled, question of taking further action in respect of those violations under any other provision does not arise at all. Very object of consent proceedings is to avoid multiplicity of proceedings. 3 In these circumstances since the first two violations being settled Adjudicating Officer is not justified in imposing penalty against the appellant. As regards the third violation is concerned, counsel for SEBI fairly states that in view of the decision of this Tribunal in case of Mr. Ravi Mohan & Ors. vs SEBI (Appeal No. 97 of 2014 decided on December 16, 2015) although penalty imposed against the appellant cannot be sustained for the reasons stated in the said decision, the appellant be directed to make disclosure under regulation 7(1A) in respect of the third violation within such time as this Tribunal deems fit and proper.
4. Accordingly, while setting aside the penalty imposed against the appellant in the impugned order, we direct the appellant to make requisite disclosure under regulation 7(1A) in respect of the transaction covered under the third violation within a period of two weeks from today.
5. Appeal is disposed of in the above terms with no order as to costs.
Sd/-
Justice J.P. Devadhar Presiding Officer Sd/-
Jog Singh Member 28.01.2016 Prepared and compared by:
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