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2018 (1) TMI 1095 - HC - Companies LawOffences by companies - applicants are arraigned as accused in Securities and Exchange Board of India (SEBI) - Held that:- The documents, record and averments in the complaint, justify the rejection of the application of discharge of applicants. In the present case, it is noted that the words “in charge of” are missing in the complaint, however, reading the existing averments in the complaint read with adjudication order, prima facie makes out a case against the applicants and they are not entitled for the discharge. It is also pertinent to note that in paragraph 13 of the complaint it is submitted that the accused are intentionally avoiding payment of penalty amount. The said allegation is attributed to all the accused including the applicants. The offence under Section 24(2) of SEBI Act stipulates that if any person fails to pay the penalty amount imposed by the adjudicating officer or fails to comply with any of the directions or orders, he shall be punishable with imprisonment. Thus, find that there is no substance in the submissions advanced by the applicants. The obligations of the directors in listed companies are particularly onerous especially when the Board of Directors makes itself accountable for the performance of the company to shareholders and also for the production of its accounts and financial statements especially when the company is a listed company. The directors of the company or the person incharge directly or indirectly use or employ in connection with the issue, purchase or sale of any securities listed in stock exchange, any manipulative or deceptive device or contrivance in contravention of SEBI Act or the Regulations made thereunder, have necessarily to be dealt with in accordance with the provisions of SEBI Act and the Regulations which is absolutely necessary for the investors' protection and to avoid market abuse. In paragraph 33 of the said decision, it is observed that the company, though a legal entity, cannot act by itself, it can act only through its directors. The directors are expected to exercise their power on behalf of the company with utmost care, skill and diligence. For the reasons stated hereinabove, find that there is no merit in the contentions of the applicants and, therefore, the applications are required to be rejected.
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