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TMI Blog2021 (5) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5 lakh was imposed upon the appellant nos. 1 and 2 under Section 15HB of the Securities and Exchange Board of Act, 1992 ('SEBI Act' for short). 2. The facts leading to the filing of the present appeal is, that the appellant is a Company and provides end solutions in wind energy generation. The said Company has a presence in various countries. The Company from time to time receives orders for manufacture and installation of wind turbines which are normally disclosed to the stock exchange under Clause 36 of the Listing Agreement. 3. On October 12, 2015 a show cause notice was issued in respect of certain orders which were cancelled in the year 2007-08, the valuation of the contract was worth Rs. 1506 crore. The show cause notice alleged that corporate announcement of the cancellation / truncation of the orders was not made known to the stock exchange and that in respect of certain orders so received no announcement whatsoever was made to the stock exchange. The show cause notice, therefore, alleged violation of Clause 36 of the Listing Agreement read with Section 21 of the SCRA and Clause 2.1 and 3.2 of Schedule II read with Regulation 12(2) of the SEBI (Prohibition of Insider Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion both at the time of occurrence of the event and subsequently after the cessation of the event in order to enable the security holders and the public to appraise the position of the Issuer and to avoid the establishment of a false market in its securities. In addition, the Issuer will furnish to stock exchange(s) on request such information concerning the Issuer as the stock exchange(s) may reasonably require. The material events may be events such as:- (a) Change in the general character or nature of business. (b) Disruption of operations due to natural calamity. (c) Commencement of Commercial Production / Commercial Operations. (d) Developments with respect to pricing / realisation arising out of change in the regulatory framework. (e) Litigation / dispute with a material impact The Company will promptly after the event inform the Exchange of the developments with respect to any dispute in conciliation proceedings, litigation, assessment, adjudication or arbitration to which it is a party or the outcome of which can reasonably be expected to have a material impact on its present or future operations or its profitability or financials. (f) Revision in Ratings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead with the Guidance Note make it apparently clear that the company is required to intimate the Stock Exchange with regard to the material events immediately, which information is required to be made to the public immediately. The word "immediately" has to be construed accordingly. It was urged that the word "immediately" should be construed liberally and not literally and, thus, contended that a reasonable time has to be given to make appropriate disclosure under Clause 36 of the Listing Agreement. In support of the submissions, the learned counsel has placed reliance upon a decision in Rosali V. vs. Taico Bank and Ors. (2009) 17 SCC 690 where the Supreme Court held that the word immediately should mean within a reasonable time and further held that is a well-settled principle of interpretation of a statute that where literal meaning leads to anomaly and absurdity, it should be avoided. 21. As per Black's Law Dictionary-eighth edition, the word "immediate" means occurring without delay, instant. As per Black's Law Dictionary-sixth edition, the term "immediately" means without interval of time, without delay, straightaway, or without any delay or lapse of time. The words 'forth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of time and without any other intervening recurrence. The meaning of the word 'forthwith' is synonymous with the word 'immediately' which means with all reasonable quickness and within a reasonably prompt time." 26. In the light of the aforesaid and considering the importance of disclosure under Clause 36 of the Listing Agreement, in our opinion, information was required to be given to the Stock Exchange at the earliest without any undue delay." 11. In ICICI Bank Limited vs Securities and Exchange Board of India (Appeal No. 583 of 2019 decided on July 8, 2020) this Tribunal while considering Clause 36 of the Listing Agreement held:- "18...................... Clause 36 is sweeping in nature as it mandates all disclosures to enable the shareholders and the public to appraise the position of the Company and to avoid the establishment of a false market in its securities. It also mandates that the Company will also immediately inform the Exchange of all the events, which will have bearing on the performance/operations of the company as well as price sensitive information. Sub clause 7 further mandates disclosure of any other information having bearing on the operation/performan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SEBI Act for violation of Clause 3.2 of the Code of Conduct under the PIT Regulations of 1992. For facility, Clause 3.2 of the Code of Conduct is extracted here under:- "3.2 This official shall be responsible for ensuring that the company complies with continuous disclosure requirements. Overseeing and co-ordinating disclosure of price sensitive information to stock exchanges, analysts, shareholders and media and educating staff on disclosure policies and procedure." 15. A perusal of the aforesaid indicates that it is duty of the Compliance Officer to ensure that the Company complies with all the legal obligations. In the instant case as we have held the cancellation / truncation of the orders had a material impact and was price sensitive information which could have an impact on the financials of the Company. Thus, Clause 3.2 of the Code of Conduct was violated. Since there is no separate provision for imposition of penalty the provisions of Section 15HB of the SEBI Act was invoked and the penalty was rightly imposed. We do not find any error on this aspect. 16. A sum of Rs. 1 crore has been imposed for violation of Section 23E of the SCRA. For facility, Section 23E is extra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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