TMI Blog2017 (2) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... person is inter-alia liable for monetary penalty as stipulated under SEBI Act. Argument of the appellant that inspite of the violations committed by the appellant, no penalty could be imposed on the appellant, because the proceedings have been initiated after several years from the date on which violations took place is without any merit. Neither the SEBI Act nor the Regulations framed thereunder stipulate that proceedings for imposing penalty must be initiated within a specified time from the date on which violations are committed. Argument advanced on behalf of the appellant that substantial shares of the Target Company were acquired by the appellant under a pledge and disclosure provisions would not apply to the pledged shares is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale, Advocate with Mr. Tomu Francis, Advocate Per: Justice J.P. Devadhar (Oral) 1. Appellant is aggrieved by the order passed by the Adjudicating Officer ( AO for short) of Securities and Exchange Board of India ( SEBI for short) on August 31, 2015. By the said order penalty of ₹ 13 lac is imposed on the appellant under Section 15A(b) of the Securities and Exchange Board of India Act, 1992 ( SEBI Act for short), out of which penalty of ₹ 6,50,000 is imposed for violating regulation 7(1) read with regulation 7(2) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ( SAST Regulations, 1997 for short) regulation 13(1) of the Securities and Exchange Board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the appellant as contemplated under regulation 13(3) read with regulation 13(5) of the PIT Regulations. 4. Inspite of the fact that there is violation of the provisions contained in the SAST Regulations, 1997 and PIT Regulations, counsel for the appellant submitted that the penalty imposed on the appellant by the impugned order cannot be sustained for the following reasons:- a) Impugned violation took place in the year 2008/2010 whereas show cause notice was issued belatedly on February 28, 2014 and the impugned order is passed belatedly on August 31, 2015 and hence, in view of inordinate delay in initiating proceedings against the appellant, the penalty imposed against the appellant deserves to be deleted. b) Substantial sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs for imposing penalty must be initiated within a specified time from the date on which violations are committed. It is not the case of the appellant that in the present case, SEBI was aware of the violations committed by the appellant long back and inspite of the knowledge above violations, SEBI initiated penalty proceedings belated on February 28, 2014. In these circumstances, argument of the appellant that the proceedings have been initiated belatedly and, therefore, penalty deserves to be deleted cannot be sustained. 8. Argument advanced on behalf of the appellant that substantial shares of the Target Company were acquired by the appellant under a pledge and disclosure provisions would not apply to the pledged shares is equally wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case, since the disclosures were not made the penalty imposable for violating regulation 7(1) read with 7(2) of the SAST Regulations, 1997/ regulation 13(1) of the PIT Regulations would be ₹ 1 crore and for violating regulation 13(3) read with regulation 13(5) of the PIT Regulations the penalty imposable would be ₹ 1 crore. Thus, as against the penalty of ₹ 2 crore imposable against the appellant, the AO of SEBI after taking into consideration all mitigating factors has imposed penalty of ₹ 13 lac which cannot be said to be excessively high or exorbitant. 10. For all the aforesaid reasons, we see no merit in the appeal and the same is hereby dismissed with no order as to costs. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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