TMI Blog2015 (7) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... es of money, in order to enable Appellant to make payment to its stock-broker, as per T+2 settlement mechanism. - Decided against the appellants. - APPEAL NO.93 OF 2014, APPEAL NO.104 of 2014, MISC. APPLICATION NO.73 OF 2014 AND APPEAL NO.180 OF 2014 - - - Dated:- 19-12-2014 - A. S. Lamba, J. For The Appellant : Ms. Poonam Gadkari, Advocate i/b Juris Matrix For The Respondent : Mr. Kumar Desai, Advocate with Mr. Rushin Kapadia, Advocate i/b K. Ashar Co. Per : A.S. Lamba Misc. Application No. 73 of 2014 in Appeal No.180 of 2014, And Misc. Application No. 74 of 2014 in Appeal No.181 of 2014 Misc. Applications for condonation of delay of 5 days have been filed in the aforesaid Appeals. For the reasons stated in the Misc. Applications, the delay is condoned. Misc. Applications stand disposed of accordingly. Appeal No.93 of 2014: 1. Facts in other three appeals, namely, Appeal No. 104 of 2014 in matter of Shreyanshnath Shares and Financial Services Private Ltd. Ors. Vs. SEBI, Appeal No.180 of 2014 in the matter of Shri Prakashbhai Ishwarbhai Rana Vs. SEBI, and in Appeal No.181 of 2014 in the matter of BMD Exports Pvt. Ltd. Ors. Vs. SEBI, ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... started falling. Appellant bought 61,000 shares of RDB at 13:14:43 for ₹ 81 per share and his total purchase and sale for that day was 1,46,000 shares, for which he suffered loss of ₹ 77,01,102/-. RDB transferred funds on 7/10/2011 to RDB Reality and Infrastructures Ltd., who transferred some of it to Namokar Duplicating Pvt. Ltd. who transferred some of it to Mercury Fund Management Co. Ltd., who transferred some of it to Deesha Tie Up Pvt. Ltd. and transferred some of it to Dharmnath Shares and Services Pvt. Ltd., who transferred some of it to Sardhav Investment and Finance Pvt. Ltd. and finally Sardhav transferred funds to four loss making trading clients, and one of these four clients was the Applicant. It is also seen that entities Dharamnath and Deesha are related as its Director of Dharamnath, Mr. Maheshbhai Patel and Director of Deesha, Mr. Mohanlal Patel have common address. Mohanlal Patel is also Director of Subodh Sagar and Subodh Sagar and Sardhav have common email id and that Namokar is a significant shareholder of RDB Insurance Brokers Services Pvt. Ltd., which is a group company of RDB. RDB had paid capital of ₹ 13.21 crore, before IPO an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Counsel for Respondent has submitted the following: Appellant did not have sufficient funds to meet pay-out obligations for his trading in RDB scrip on listing day of scrip. Web of transfer of funds to fund loss made by Appellant in respect of Appellant s trading in RDB scrip on listing day, is in impugned order and impugned order also contains interconnection between parties involved in fund flow from RDB to Appellant. Appellant dealt in scrip of RDB on listing day of the scrip, made losses in trading of RDB scrip. Appellant did not have funds to meet pay-out obligations on account of losses in trading of RDB scrip. Appellant claims to borrow funds to meet pay-out obligations from Sardhav, entered into agreement with Sardhav which lacks credence. Appellant repaid money borrowed money only partially with interest but no proof of interest paid supplied. Appellant made one large purchase transaction at 13:14:43, at about ₹ 81 per share and counter-party is Techno Broking Financial Services Pvt. Ltd. and no reply filed by Appellant to SCN, Appellant did not avail of opportunity of personal hearing granted to him on several occasions. In view of the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock-broker, as per T+2 settlement mechanism. 9. Ld. Counsel for Respondent has further submitted in view of the facts set out hereinbelow, charge of Respondent against each of the four Appellants, is proved: a. Each Appellant dealt in scrip of RDB Rasayan Ltd. (RDB) on 1st day of listing i.e. 7th October, 2011. b. Each Appellant suffered loss as a result of his trading in scrip of RDB. c. Each Appellant did not have money to meet his pay in obligations including in respect of trading done on the 1st day of trading i.e. 7th October, 2011 (pay in obligation on 11th October, 2011). d. Each Appellant claims to have borrowed/received money to meet his pay in obligations. e. Each Appellant claims to have borrowed/received money to meet their pay in obligations from Sardhav Investments Finance Pvt. Ltd. (Sardhav). f. Each Appellant had entered into identical loan agreements with Sardhav, which lacks credence. g. Each Appellant claimed to have repaid money borrowed/received (though not fully) with interest (no proof of interest having been paid). h. None of Appellants has filed appeal against ad-interim Order dated 28th December, 2011 and Confirmatory Order da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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