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2015 (6) TMI 792 - AT - Companies LawPenalty under Section 15A(b) of the SEBI Act, 1992 - Violation of regulation 7(1) & 7(2) of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 (SAST) and regulation 13(1) & 13(3) read with 13(5) of SEBI (Prohibition of Insider Trading) Regulations, 1992 (PIT) - Held that:- Argument that appellant being house wife, she was not aware of the consequences of erroneous transfer of shares cannot be accepted because admittedly appellant is a post graduate in commerce and apart from carrying on the profession of consultancy appellant has been advancing short term loans to various companies. It is only after appellant agreed to advance loan, ACL transferred shares to the demat account of appellant. Unless appellant had furnished her demat account number, ACL could not have transferred shares. Assuming that shares were erroneously transferred no explanation is given as to how the shares remained in the demat account of the appellant for 43 days. Argument that no investor has suffered on account of non disclosure and that the AO has not considered the mitigating factors set out under Section 15J of SEBI Act, 1992 is without any merit because firstly penalty for non compliance of SAST Regulations, 1997 and PIT Regulations, 1992 is not dependent upon the investors actually suffering on account of such non disclosure. Secondly, penalty under Section 15A(b) for non compliance of the regulation framed by SEBI is ₹ 1 lac for each day during which such failure continues or 1 crore rupees whichever is less. Argument that erroneous transfer was without consideration and did not constitute trade is also without any merit because, for purposes of SAST Regulations what is relevant is acquisition of shares and once acquisition of shares exceeds the limits prescribed therein, provisions of SAST Regulations are triggered. - Decided against the appellants.
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