BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Appeal No. 5 of 2011
Date of decision: 24.02.2011 Good Value Marketing Co. Ltd.
3rd Floor, Industrial Assurance Bldg.,
Churchgate,
Mumbai – 400 020.
…… Appellant
Versus
The Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G Block,
Bandra Kurla Complex, Bandra (East),
Mumbai – 400 051.
…… Respondent
Mr. Dilip Dahanukar, authorised representative of the Appellant.
Ms. Daya Gupta, Advocate with Ms. Harshada Nagare, Advocate for the Respondent.
Coram : Justice N.K. Sodhi, Presiding Officer
P. K. Malhotra, Member
S.S.N. Moorthy, Member
Per : Justice N.K. Sodhi, Presiding Officer (Oral)
This order will dispose of two App eals no. 5 and 6 of 2011 both of which are
directed against identical orders imposing monetary penalty on the appellants for not
complying with the requests of their shar eholders/investors for dematerializing their
shares within the time prescribed by law. A penalty of Rs.10 lacs has been imposed on
the appellant in Appeal no. 5 of 2011 whereas a penalty of Rs.5 lacs has been imposed
on the other appellant. The fact that there has been considerable delay in complying
with the requests of the investors is not in dispute before us. In large number of cases
the delay has been anywhere between 3-4 y ears. Mr. Dahanukar, the director in both
the companies, has submitted that the compan ies were in financial difficulties since
the year 2000 and that a reference had also been made to the Board for Industrial and
Financial Reconstruction for framing a scheme and it is on account of these difficulties
that the requests of the shareholders for th e dematerialization of their securities could
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not be dealt with expeditious ly. He further points out th at as on October, 2010 there
were no requests pending and all the shares had been dematerialized. When he
appeared before the adjudicating officer, he also gave an undertaking that no such
defaults shall be committed in future. We find from the record that the promoters of
the two companies are trying to take them out of the red. Having regard to the facts
and circumstances of this case and without making it a precedent for other cases, we
are of the view that the pena lty levied on both the appellant s deserves to be reduced.
In our view, the ends of justice would be adequa tely met if the penalty in
Appeal no. 5 of 2011 is reduced to Rs.5 lacs and to Rs.2.5 lacs in the other case.
We order accordingly.
The appeals stand disposed of as above. The appellants are allowed three
months time to deposit the amount. No costs.
Sd/-
Justice N. K. Sodhi
Presiding Officer
Sd/-
P. K. Malhotra
Member
Sd/-
S.S.N. Moorthy
Member
24.2.2011
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