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15. Referring to the purchase of 6 lakh shares of the appellant by MALCO in June, 1998, Shri Sundaram submitted that provisions of regulation 4(a) and (d) are not attracted to the said purchase also as could be seen from the factual position being referred to later. The shares were purchased as requested by the BSE, to avert a payment crisis and save the market.

16. Shri Sundaram submitted that the respondent has wrongly concluded that the appellant and MALCO are one and the same entity. MALCO is a public limited company, run by its board of directors in management and that it is not even a subsidiary of the appellant, the fact that MALCO is an associate company of the appellant should not be construed to hold that MALCO is an agent of the appellant, that the relation is not that of principal and agent but that of business associates, that this aspect has been totally over looked by the respondent in its order. The appellant and MALCO are two distinct and separate legal entities and as such purchase of shares by MALCO cannot in any case be considered as purchase of shares by the appellant.

17. The learned senior counsel submitted that MALCO purchased 6 lakh shares of the appellant at the specific request of some senior members of the BSE Governing Board to avert a payment crisis in the exchange, He submitted that the sole intention of MALCO in buying the scrips was to help BASE to avert a major payment crisis which if allowed to happen would have affected innocent investors. The learned counsel stated that the material on record and the impugned order acknowledges that these transactions were put through at midnight on 12-6-1998 which would never have been possible without the BSE governing Board being involved, that this favour by MALCO has been twisted and classified as bail out of the Damayanti Group. He submitted neither MALCO nor the appellant knew the brokers of the Damayanti Group nor was there any means of knowing as to which brokers were selling those shares. Shri Sundaram stated that the impugned order has disregarded the fact that MALCO instructed El Dorado to first find a buyer (financial institution) for these 6 lakh shares and only if they could not find such a buyer, MALCO would purchase the shares, which MALCO did after one month of the original purchase by El Dorado. He further stated that it is an admitted fact that the shares were purchased to avoid a market crisis at the instance of BSE, and therefore the question of distorting the market did not arise at all; further the beneficial ownership of six lakh shares purchased was transferred to MALCO. He further stated that the fact that MALCO had instructed El Dorado to place the shares with financial institutions and in case it did not fructify, the shares would be purchased by MALCO, indicates the genuineness of the transaction, that if the intention was to manipulate the market, MALCO would have directed El Dorado to place the shares with the brokers. He further stated that the impugned order itself clearly states that the shares were purchased by MALCO and the purchase was also funded by MALCO and as such the appellant cannot be said to have violated regulation 4(d). He also pointed out that nowhere it has been stated in the order that there was any fund flow from the appellant for the purchase of the said 6 lakh shares. MALCO used its own funds. Shri Sundaram submitted that the factual position completely belies the contention that the appellant had any intention to manipulate the share price. He further submitted that the scope of the provisions of regulation 4(a) and (d) discussed in the context of the transaction relating to purchase of 3 lakh shares is in equal force applicable to the purchase of 6 lakh shares by MALCO and this transaction is also out of the scope of the said regulation.

28. The learned senior counsel stated that the inference drawn in para 6.8 and 6.9 of the order is not based on any reasonable information/evidence, that on the contrary the findings are contrary to the facts on record. Referring to para 7.1 of the order, Shri Sundaram submitted that the respondent itself has admitted that this deal (6 lakh shares) was actually for MALCO an associate company of Sterlite Industries Ltd. which was approached by the ESE to bail out brokers having payment difficulties, MALCO forwarded 11.75 crores to El Dorado for this deal. In fact the position that MALCO purchased shares has been re-iterated in para 7.2 also. By this statement the respondent itself has admitted that the purchase was made for MALCO and not for the appellant and the reason for such purchase was BSE's request to help to avoid a payment crisis. BSE is a public authority which has representatives of the respondent on its Governing Board and that MALCO purchased shares at the price fixed by the Governing Board officials of BSE and the quantum was also decided by them, MALCO had no choice, that the whole purpose was to go by BSE to avoid market crash and thereby protect the interests of all concerned, including the investors. Shri Sundaram submitted that such an action taken at the behest of BSE, to protect the interests of the capital market cannot be considered by any standard a market manipulation to attract the provisions of regulation 4(a) and (d).

29. The learned senior counsel submitted that 6 lakh shares were purchased by MALCO on the specific request of the authorities from Bombay Stock Exchange, neither MALCO nor the appellant knew the brokers of Damayanti Group allegedly involved in the transactions. He stated that the respondent had ignored the fact that MALCO had instructed El Dorado to find a buyer for the said 6 lakh shares and only if they could not find a buyer, MALCO would purchase such shares, which MALCO did after one month of the purchase by El Dorado. Shri Sundaram pointed out that the respondent has failed to recognise the fact that MALCO is a separate and independent legal entity and that it felt no need to issue any show-cause notice to MALCO, to ascertain the actual position in this regard. According to the learned senior counsel this is a serious omission having a direct bearing on the conclusion drawn by the adjudicating authority.