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3.2 The Broker submitted that the Enquiry Officer has failed to appreciate the facts and circumstances and the submission made by them during the hearing on January 02, 2006, leading to the admission of backdated of contract notes by its erstwhile director. In this regard, they submitted that Shri. Rajendraprasad Jhunjhunwala, its erstwhile director, was in charge of day to day affairs of the company and solely responsible for the day to day business decisions of the company at the relevant time. Since he was fully conversant with the facts of the case, they had vide letter dated December 20, 2005 inter alia requested him to attend the enquiry proceedings before the Enquiry Officer on January 02, 2006.

3.3 The Broker submitted that Shri. Rajendraprasad Jhunjhunwala for the first time after issuance of the Notice informed them vide letter dated December 23, 2005 that he had carried out the backdating of the contract notes on its behalf at the behest of Shri. Pendse and under pressure from him.

3.4 The Broker submitted that Shri. Rajendraprasad Jhunjhunwala had only admitted the back dating of contract notes and not the Broker. This aspect had escaped from the attention of the Enquiry Officer, and that this fatal omission has resulted in distortion of his findings. The Broker further stated that the above categorical admission of Shri. Rajendraprasad Jhunjhunwala referred to above cannot be considered as that of the Broker. The observation in the Enquiry Report that "JSBL had admitted the violation" is incorrect. It was Shri. Rajendraprasad Jhunjhunwala who admitted the violation, in his individual capacity.

3.5 The Broker submitted that the conclusion in the enquiry report that it had violated the provisions of Regulations 6(d)" of the FUTP Regulations and which is contrary to the facts on record and need to be discarded in as much as the Broker has not admitted any violation of Regulations 6(d) of the FUTP Regulations.

3.6 The Broker submitted that Shri. Rajendraprasad Jhunjhunwala had clearly acted beyond the authority granted by the Board of the Broker to him. The Board had never authorized him to back date the contract notes for the transactions as alleged in the Notice eventhough the Contract Notes were backdated and were shown as issued on behalf of the Company.

5.3 With regard to the other charge of backdating of contract notes for the purchase and sale of the shares of TFL, the Enquiry Officer found the Broker guilty and arrived at a conclusion that the Broker had violated Regulation 6(d) of PFUTP Regulations, SEBI Circular no. SMD(B)104/22775/93 dated October 29, 1993, SEBI Circulars No SMDRP/Policy/CIR-32/99 dated September 14, 1999 and Regulation 17(1)(j) of SEBI Stock Brokers Regulations.

5.4 The Enquiry Officer has relied on the admission of the Broker regarding the execution of contract notes. The Broker also admitted the same during the course of hearing before me. However, the Broker submitted that the reason for such admission by one of their erstwhile Director, Shri. Rajendra Prasad Jhunjhunwala was explained in its reply dated June 30, 2006 to the show cause notice. On a perusal of the said reply, I find that the Broker has reproduced the extract of the letter dated December 23, 2005 of Shri. Rajendra Prasad Jhunjhunwala which was issued to the Broker informing that he had carried out the backdating of contract notes on behalf of Broker at the behest of Shri. Dilip Pendse. In its reply, the Broker had taken a stand that Shri. Rajendra Prasad Jhunjhunwala had resigned from their Company and was the only person responsible for the violations and their Company is in no way involved in this matter. They have also stated that Shri. Rajendra Prasad Jhunjhunwala has no authority to execute such contract notes on their behalf.