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2016 (10) TMI 1305 - AT - SEBIAcquisition of shares without making the required public announcement - new acquisition went beyond the creeping acquisition limit of 5% - violation of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (“SAST Regulations”) - HELD THAT:- It is an undisputed fact that in the year 2000-2001, the Appellants cumulatively acquired 5.0346% of the shareholding of APIL. This fact has indeed been admitted by the Appellants as far back as the personal hearing conducted before the Ld. Adjudicating Officer. At the personal hearing, the Appellants admitted that inadvertently they had not made a public announcement when their newly acquired shareholding went beyond the limit of 5% as prescribed in Regulation 11(1). Categorical admission by the Appellants it is evident that the Appellants understand the import and underlying philosophy of Regulation 11(1). Participants in the securities market are allowed to actively indulge in trading and other related activities because SEBI as the market regulator is given assurances by these market players that they understand the law and regulations as laid down by the Legislature and SEBI respectively. If the Legislature and SEBI, acting on such assurances, give companies and other market participants the right to execute their business decisions in the manner these entities deem fit, it goes without saying that there is a corresponding duty placed on the market participants to ensure that such mistakes as acquiring more than the creeping acquisition limit of 5% without making the necessary public announcement are not made. There is no provision in the SEBI Act, which may have the effect of prohibiting SEBI from taking action beyond a particular period of time in a given case. However, it goes without saying that the regulator should always make an endeavor to take prompt action against the defaulting companies to render speedy and timely justice. In the present case, however, action was taken immediately after SEBI came to know about the violations. Therefore, delay, in itself, cannot defeat the ends of justice in the facts and circumstances of the case in hand. Moreover, there is nothing on record to suggest that the admission made by the appellants before the A.O. that the acquisition made by them exceeded the prescribed limit was erroneous. In these circumstances, no fault can be found with decision of the A.O. in holding that the appellants are guilty of violating the Takeover Regulations and, accordingly, imposing penalty on the appellants. As rightly brought to our notice by the Appellants that at the time the misconduct was committed and the shares acquired by the Appellants, the maximum penalty for the default of acquiring more than the prescribed limit of shareholding without making the required public announcement was ₹ 5 lac. The penalty of ₹ 15 lac was introduced later when the Act was amended. SEBI cannot be allowed to retrospectively apply the law in this situation. In our considered opinion the penalty of ₹ 15 lac imposed by SEBI in one of the orders is more than what was applicable in 2000-2001 and is therefore reduced to ₹ 5 lac.
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