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TMI Blog2014 (1) TMI 1652X X X X Extracts X X X X X X X X Extracts X X X X ..... 190, 191, 192, 193 and 194 of 2013 have been filed on October 28, 2013 i.e. after expiry of the statutory period of 45 days. Accordingly, six miscellaneous applications no. 123, 124, 125, 126, 127 and 128 of 2013 have been moved by these six appellants for condonation of the delay in approaching this Tribunal. We have heard the learned counsel for the parties on the question of delay and gone through the grounds taken by the appellants in each miscellaneous application for condonation of delay. We are inclined to allow the miscellaneous applications and we order accordingly. 3. Briefly stated the facts of the case are that SEBI conducted an investigation into certain irregularities in the trading in the shares of Rich Universe Networking Ltd. ("RUNL") for possible violations of the provisions of SEBI Act, 1992 and FUTP Regulations, 2003 for the period from February 1, 2010 to September 24, 2010. It was noticed that during the investigation period the price of the scrip rose from Rs. 56.75 to Rs. 119.90 with high fluctuations in the volume. A group of 21 entities was found to be connected with each other and these entities entered into off-market transactions of the scrip of RUNL i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unity of personal hearing granted to them. On the basis of material brought on record during the enquiry by the parties and after analyzing the replies submitted by the Noticees, except noticee nos. 8 and 20, the learned AO came to the conclusion that the charges against the Noticees stood proved and imposed a monetary penalty of Rs. 25 lac on Noticee no. 1 because of its lead role in the entire scheme of manipulation and a penalty of Rs. 3 lac on each of the remaining 20 entities i.e. Noticees no. 2 to 21 for their supportive role under Sections 15-I and 15-HA read with Rule 5 of the Adjudication Rules, 1995. 6. The case of the appellant nos. 1 to 6 in appeal no. 189 to 194 of 2013, as projected by the learned counsel Shri Joby Mathew, is mainly that it had traded in the scrip of RUNL in the ordinary course of business and at the relevant time, it was in need of temporary funding so it had borrowed funds from various entities including noticee nos. 7 to 21. Entities/Noticees nos. 1 to 6 are, admittedly, connected/related but connection of Noticees 1 to 6 qua Noticees 7 to 21 is disputed. For the purpose of funding, it had to transfer shares of RUNL in off-market transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the pleadings and records annexed therewith. At the outset, it may be noted that appellant nos. 1 to 6 had initially denied that they were having any relation or connection among themselves or with other remaining 15 Noticees which formed a group of 21 entities but during the enquiry, it has been categorically found that appellant nos. 1 to 6 have a common address and two common directors. In this backdrop, Shri Joby Mathew, learned counsel for appellant nos. 1 to 6 has admitted the connection among appellant nos. 1 to 6 and, rightly so. As far as remaining appellants and / or Noticees are concerned, it is not disputed that a large quantity of shares of the same company i.e. RUNL was received by way of off-market transactions by them from appellant nos. 1 to 6. It is also borne out of the records that the remaining appellants and / or Noticees sold shares by way of synchronized trades to appellant nos. 1 to 6, mostly on the same day or immediately thereafter within a few days. Nobody has disputed these transactions either before us or before the learned AO. Such reversal of the off-market transactions in a quick succession through synchronized on-market transactions to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d judgment of the Supreme Court are relevant and reproduced hereinbelow for the sake of convenience :- "35. The second question, therefore, which falls for our determination is as to whether the contract in question is a spot delivery contract? This expression is defined under Section 2(i) of the SCRA. It reads as follows : "2. Definitions. - In this Act, unless the context otherwise requires - (i) 'spot delivery contract' means a contract which provides for - (a) actual delivery of securities and the payment of a price therefor either on the same day as the date of the contract or on the next day, the actual periods taken for the despatch of the securities or the remittance of money therefor through the post being excluded from the computation of the period aforesaid if the parties to the contract do not reside in the same town or locality; (b) transfer of the securities by the depository from the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository." "36. According to the definition, a contract providing for actual delivery of securities and the payment of price thereof either on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etion to take a subjective decision in respect of certain entities on the basis of availability of sufficient evidence against them. At the same time, SEBI is also empowered to take a subjective decision, in a given case, not to take or even drop action against certain other entities in the same case if it is satisfied, on the basis of material on record, that there is insufficient, weak or no evidence to finally bring such entities to the book. In such an eventuality, SEBI may decide not to take any action against such entities. This factor, in our considered opinion, would not itself vitiate the proceedings/action taken by SEBI as Regulator against those entities in whose case it found sufficient or strong evidence to punish them as per law after holding enquiry and affording them an opportunity as per law and after complying with natural justice. Similarly, reliance placed by the appellants on an order dated September 25, 2013 passed by the learned whole time member of SEBI in respect of M/s. Mavi Investment Fund Ltd. is pertaining to issuance of Global Depository Receipts (GDRs) as such it is distinguishable and does not help the appellant's case in as much as no GDR issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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