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"A. Misrepresentation including of financials and misuse of funds/books of accounts in violation of LODR Regulations, 2015;

B. Non furnishing of information/Noncooperation by the Company with the forensic auditor; C. Violation of PFUTP Regulations, 2003."

7. The WTM after considering the replies of the appellants and the material evidence on record concluded that the appellant Company misrepresented its financials and violated the accounting standards. The WTM found that various provisions of LODR Regulations were not complied with during the three financial years and there were lapses on the part of the Company in not making the disclosures within the stipulated period. The WTM further found that non-furnishing of information to the forensic auditor was violative of Section 11(2)(i) of the SEBI Act. The WTM further found that there was no violation of Section 12A of the SEBI Act and Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003 (hereinafter referred to as "PFUTP Regulations") as there was no misappropriation of the funds nor the Company nor its Directors had played a fraud upon the investors nor was there any disproportionate gain or unfair advantage nor any specific loss was incurred by any investor. The WTM accordingly for the above violations debarred the appellant from accessing the securities market for specified periods and imposed different amounts of penalties on the appellants.

10. The WTM has gone into detail and came to the conclusion that there has been misrepresentation including of financials and, consequently, violation of the LODR Regulations. In this regard the WTM found discrepancies in the expenses incurred by related parties of the appellant company incurring expenses on behalf of the Company, misrepresentation with regard to Foreign Currency Convertible Bonds, misrepresentation with regard to litigation expenses, misrepresentation of foreign exchange fluctuation loss etc. The WTM found that the findings given in the forensic audit report were correct and the Company had disclosed incorrect transactions in the books of accounts and thereby violated Regulation 48 of the LODR Regulations, 2015.

11. We thus find that the Company had made certain lapses and failed to comply with the LODR Regulations.

12. We also find that the entire enquiry was initiated with regard to the allegation that the Company was a shell Company which fact was found to be false. Further, the WTM has given a clear finding that there was no violation of the PUTP Regulations and there was no diversion of funds nor there was any manipulation in the price of the scrip and, consequently, no fraud or unfair advantage was caused to any shareholder or investor. In the absence of any specific loss being caused to anyone it was contended that the penalty imposed in the given circumstances was totally disproportionate to the alleged violation apart from being harsh and excessive.

15. In the instant case, we find that the violation of the LODR Regulations gave no disproportionate gain to anyone nor created any unfair advantage to the appellant nor any specific loss was caused to any investors and, therefore, in our opinion the direction of debarment and penalty imposed for violation of the LODR Regulations appears to be harsh and excessive.

16. We find that the Appellants no. 3,4,5,6 and 7 were non- executive directors and Appellants no. 8 and 9 were chief financial officers. They were not involved in the day to day affairs and management of the Company and are therefore not concerned with the alleged misrepresentations of the financials. Merely because Appellants no. 3 to 7 were part of the audit committee does not mean that the said appellants were aware of the misrepresentations made by the Company. The imposition of penalty upon them is, thus, wholly erroneous in view of various decisions passed by this Tribunal from time to time. Similarly, we find that Noticee no. 13 worked as CFO w.e.f. 22nd May, 2017 and was not involved in the preparation of the books of account nor involved in the misrepresentation of the financials of the Company for the FY 2016-17. The Annual Report is approved by the Board of Directors and the Noticee no. 13 was only a signatory to the Annual Report. He, thus, cannot be found guilty of the charges. However, Noticee no. 12 was the CFO of the Company for FY 2015-16 and 2016-17 and gave annual certificate in terms of Part B and Schedule II of LODR Regulations, 2015. Such certification was, however, given pursuant to the direction of the Board of Directors. In our view, Noticee no. 12 has violated Regulation 17(8) of LODR Regulations, 2015 but the penalty imposed is excessive. We, however, find that Appellant no. 2 being a director was responsible for the affairs of the Company and was in-charge of the day to day running of the Company.