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2016 (7) TMI 1347 - AT - Indian LawsViolation of section 11C(3) and section 11C(5) of the SEBI Act - disclosure requirement - guilty of violating the 1997 Regulations and PIT Regulations - Held that:- Failure to make disclosure during the period from February 20, 2010 till May 2010 cannot be attributed to the appellant and, therefore, the appellant cannot be held guilty of violating the 1997 Regulations and PIT Regulations. Consequently, penalty imposed under section 15A(b) of SEBI Act on ground that the appellant has violated the 1997 Regulations and PIT Regulations cannot be sustained. As regards the penalty of ₹ 2,00,000 imposed for violating section 11C(3) and ₹ 2,00,000 for violating section 11C(5) of the SEBI Act it is not in dispute that the appellant had failed to furnish all particulars sought in the summons issued against the appellant and that the appellant had failed to appear inspite of receiving the summons. Counsel for the appellant, however, submitted that in the present case, inadvertently the date of summoning was mistaken to be the date before which the letters, documents were to be filed with SEBI and accordingly it is submitted that it is not a fit case for imposing penalty on the ground the appellant has violated section 11C(3) and section 11C(5) of the SEBI Act. Once it is established that there is failure to furnish requisite particulars called for and there is failure to appear before the concerned officer of SEBI as per the summons issued to the appellant, it obviously means that there is violation of section 11C(3) and section 11C(5) of SEBI Act. Penalty for such violations under section 15A(b) of the SEBI Act is ₹ 1 lakh per day subject to a maximum of ₹ 1 crore. Thus as against the penalty of ₹ 1 crore imposable for violating section 11C(3) and penalty of ₹ 1 crore imposable for violating section 11C(5), the AO of SEBI after considering all mitigating factors has imposed penalty of ₹ 2 lakh for violating section 11C(3) and ₹ 2 lakh for violating section 11C(5) of SEBI Act which cannot be said to be unreasonable and excessive. Accordingly, the penalty imposed for violating section 11C(3) and 11C(5) is upheld. All these appeals penalty imposed under section 15A(b) of SEBI Act for allegedly violating the 1997 Regulations and PIT Regulations is quashed and set aside. However, penalty under section 15A(a) of SEBI Act for violating section 11C(3) and section 11C(5) of SEBI Act respectively is upheld. Each appellant is directed to pay the penalty imposed by the AO of SEBI for violating section 11C(3) and penalty imposed for violating section 11C(5) of SEBI Act, within a period of six weeks from today. If the appellants pay the said amount within six weeks from today, then, SEBI shall accept the same in full and final settlement of the claim under the impugned order. If the appellants fail to pay the aforesaid penalty within six weeks from today, then, SEBI shall be entitled to recover that amount with interest @ 12% p.a. from the date of the order passed by the AO of SEBI till payment.
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