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2015 (7) TMI 258 - SECURITIES APPELLATE TRIBUNAL MUMBAI

2015 (7) TMI 258 - SECURITIES APPELLATE TRIBUNAL MUMBAI - TMI - Penalty under Section 15A(b) of the SEBI Act - Violation of Regulation 8(3) of the SEBI(Substantial Acquisition of Shares and Takeovers) Regulations (SAST), 1997 - whether no trading in shares on stock exchange or filing of suo moto consent or no loss occured to any investor due to non disclosure have any impact on penalty amount - Held that:- In case of Comfort Fincap Ltd. vs. SEBI [2015 (6) TMI 791 - SECURITIES APPELLATE TRIBUNAL .....

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ncap Ltd. [2015 (6) TMI 791 - SECURITIES APPELLATE TRIBUNAL MUMBAI] , first contention of the appellants that the AO was not justified in imposing penalty for not making disclosure under Regulation 8(3) inspite of there being no trading on account of the Stock Exchanges being non functional, cannot be accepted.

Second contention of the appellants is that they had filed suo moto consent applications before SEBI. Filing of suo moto consent applications do not enhance their case, because .....

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ccurred to any investor due to non disclosure under Regulation 8(3). Very same argument was raised in case of Mrs. Komal Nahata [2015 (6) TMI 792 - SECURITIES APPELLATE TRIBUNAL MUMBAI] and the said argument was rejected by recording a finding that the mandatory disclosures under the respective regulations framed by the SEBI have to be complied with, irrespective of the fact that the investors have actually suffered on account of non disclosures or not. In view of the aforesaid decision of this .....

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₹ 7 lac on each appellant which cannot be said to be unreasonable or excessive. - Decided against the appellants. - Appeal No. 426 of 2014, Appeal No. 427 of 2014, Appeal No. 428 of 2014 - Dated:- 30-3-2015 - J. P. Devadhar, JJ. For The Appellant : Mr. Sunil Humbre, Advocate with Mr. Abhishek Bhadang, Advocate For The Respondent : Mr. Kumar Desai, Advocate with Mr. Tomu Francis, Advocate Per : Justice J. P. Devadhar (Oral) 1. Counsel on both sides state that since the issues raised in the .....

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(b) of the Securities and Exchange Board of India Act, 1992 ( SEBI Act for short), for violating Regulation 8(3) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ( SAST Regulations, 1997 for short) during the years 1998 to 2011. 3. Counsel for the appellants fairly states that each of the appellants had failed to make disclosures under regulation 8(3) of SAST Regulations, 1997 for the year 1998 to 2011. However, in view of the deci .....

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to make disclosure under regulation 8(3) being inconsequential, the AO was not justified in imposing penalty of ₹ 7 lac on the appellants. b. Suo moto consent applications were filed by each appellant before SEBI seeking settlement of the penalty imposable on account of non disclosure under Regulation 8(3) of SAST Regulations, 1997. Eventhough the said consent applications were rejected by SEBI the month of March 2012, in view of suo moto proposal put up by appellants, the AO is not justif .....

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her hand submitted that the impugned order passed by the AO in the respective appeals is based on Larger Bench decisions of this Tribunal in case of Mrs. Komal Nahata vs. SEBI (Appeal No. 5 of 2014 decided on January 27, 2014), Hybrid Financial Services Ltd. vs. SEBI (Appeal No. 119 of 2014 decided on June 12, 2014) and Gaylord Commercial Company Ltd. vs. SEBI (Appeal No. 62 of 2014 decided on April 10, 2014) and hence there is no merit in these appeals and the same are liable to be dismissed. 5 .....

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e relevant period there were no trading in the shares on the stock exchange and hence imposition of penalty for not making disclosure under Regulation 8(3) is unjustified. Rejecting that contention it was held that making disclosure under Regulation 8(3) is mandatory and that obligation is not dependant on the actual trading on the stock exchange. In view of the aforesaid Larger Bench decision of this Tribunal in case of Comfort Fincap Ltd. (Supra), first contention of the appellants that the AO .....

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r not once it is accepted that there is violation of Regulation of 8(3), then the appellants cannot escape penal liability. 6. Reliance placed by counsel for appellants on the decision of this Tribunal in case of Gulab Impex Enterprises Ltd. (supra) is also misplaced, because, in para 6 of that decision it is specifically recorded that the appellant therein had made disclosures in the past, whereas in these three cases, it is admitted that no disclosures were made. Hence decision of this Tribuna .....

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nt applications after a decade. Having failed to make yearly disclosures year after year from 1998, appellants cannot escape penal liability merely because in the year 2011 they had filed suo moto consent applications seeking consent order. Admittedly, the said consent applications have been rejected by SEBI. 8. Third contention of the appellants is that no loss has occurred to any investor due to non disclosure under Regulation 8(3). Very same argument was raised in case of Mrs. Komal Nahata (s .....

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