BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Appeal No. 197 of 2010
Date of decision: 4.2.2011 Sharp Industries Limited
Plot No.6, Survey No. 70,
Village – Waliv, Vasai (East),
Thane – 401208.
… Appellant
Versus
Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G Block,
Bandra Kurla Complex, Bandra (East),
Mumbai 400 051.
… RespondentMr. Ashok Mehta, Authorised Representative for 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 appeal is directed against the order dated October 28, 2010 passed by
the adjudicating officer imposing a monetary penalty of ` 8 lacs on the appellant
for delaying the demat requests received fr om its shareholders. According to the
adjudicating officer, there is a delay of almost 2000 days whereas the appellant
contends that the delay is only of about 1270 days. Be that as it may, all the
requests for dematerialisation of the shar es held in physical form have been
executed and all the shares in the physical form have been dematerialized. The
appellant admits that there has been a delay in dematerializing the shares and it
has furnished some reasons which appear to us to be genuine. The appellant
became a sick company and was before th e Board for Industrial and Financial
Reconstruction (BIFR) for quite sometime . We are informed that the promoters
of the appellant company had taken adequate steps to comply with the conditions
laid down by BIFR and that the scheme framed by BIFR has since been
2
implemented. The appellant is no longer a sick company. It is also on record that
the company had approached the Hon’ble High Court for a scheme under Sections
391 to 394 of the Companies Act for reconstruction and also under Section 100 of
the same Act for the reduction of its sh are capital. The proceedings remained
pending in the High Court for sometime and the schemes have since been
approved. It is on account of the pendenc y of the aforesaid proceedings that the
requests from the shareholders for the dematerialisation of their shares got
delayed. Now that the shares have b een dematerialized, the wrong committed by
the appellant is no longer continuing. In these circumstances, we are of the
considered view that the amount of pena lty levied on the appellant needs to be
reduced considerably. Having regard to the peculiar facts and circumstances of
this case and while upholding the impugned order, we reduce the penalty to
` 2 lacs. The impugned order stands modified accordingly.
The appeal stands disposed of as above. No costs.
Sd/-
Justice N. K. Sodhi
Presiding Officer
Sd/-
P. K. Malhotra
Member
Sd/-
S. S. N. Moorthy
Member
4.2.2011
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