Appeal No.132 of 2010
Date of Decision : 27.05.2011
Mr. Manmohan Shetty
21, Golden Beach, Ruia Park,
Juhu, Mumbai. …..Appellant
Versus
The Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A,
G Block, Bandra Kurla Complex, Mumbai. ……Respondent
Mr. Janak Dwarkadas, Senior Advocate with Mr. Somasekhar Sundaresan,
Mr. Ravichandra Hedge and Ms. Farah Karachiwala, Advocates for the Appellant.
Mr. Darius Khambatta, Additional Solic itor General with Mr. Shiraz Rustomjee,
Mr. Mihir Mody and Mr. Karan Vyas, Advocates for the Respondent.
CORAM : Justice N. K. Sodhi, Presiding Officer
P.K. Malhotra, Member
S. S. N. Moorthy, Member
Per : P.K. Malhotra, Member
This appeal has been filed by the appellant against the order dated June 9, 2010 passed by the adjudicating officer of the Securities and Exchange Board of India (for short the Board) holding the appellant guilty of violating the provisions of the code of conduct prescribed under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 (for short the Regulations) and imposing a monetary penalty of `1,00,00,000 (Rupees one crore only) under section 15H B of the Securities and Exchange Board of India Act, 1992 (for short the Act).
2.The facts of the case, in brief, are that the Board conducted investigations into the alleged irregularities in the trading in the shares of Adlabs Films Limited (for short the company) and the possible violation of the provisions of the Act and the Regulations made thereunder. The appellant is a shareholder and director of the company. He was holding 82,91,234 shares and was also classified as ‘designated employee’ under the Regulations. On April 23, 2006 the company held its board meeting to approve the audited accounts for the financial year ending March 31, 2006; to recommend dividend and to consider proposal for demerger of the company’s FM radio business. The Board of Directors of the company approved the proposal for demerger of the FM radio business to a wholly owned subsidiary company (SPV) and also issuance of pro rata shares by SPV to the existing shareholders of the company in the ratio of two shares of the SPV for every one share of the company. The comp any also recommended a dividend of 45 per cent for the year ending March 31, 2006.
3.The company sent the information about the decision of the Board of Directors recommending dividend to the National St ock Exchange (NSE) on April 24, 2006 at 09.21 hours and the NSE disseminated the information on its website on the same day at 09:40:44 hours. The required in formation was also sent by the company to the Bombay tock Exchange (BSE) on April 23, 2006 (Sunday) at 10:47 hours and the BSE disseminated the said information on its we bsite on April 24, 2006 at 09:53:25 hours. The decision regarding demerger of FM radio business was also sent by the company to NSE on April 24, 2006 at 09.21 hours which was disseminated by NSE on its website at 09:40:44 hours. The same information was sent by the company to BSE on April 23, 2006 at 10:46 hours which was disseminated by BSE on its website at 09:56:35 hours on April 24, 2006. It was noted by the Board from the trade logs and order logs of April 24, 2006 that the appellant had sold 10,00,000 shares of the company. 7,50,000 shares were sold between 10:11:30 hours to 10:12:34 hours and 2,50,000 shares were sold at 15:16:44 hours. The sale of 10,00,000 shares was reported to BSE under bulk deal. The Board observed that the appellant had sold these shares of the company before the expiry of 24 hours of the outcome of the Board being made public and thus violated Regulation 12(1) read with clauses 3.2-3 and 3.2-5 of the code of conduct prescribed under Part A of Schedule I of the Regulations. Adjudication proceedings were initiated and a show cause notice was issued to the appellant on February 21, 2008. The appellant responded to the same by his letter dated April 10, 2008 denying the allegation and stating that the sale of shares was a normal market transaction. The outcome of the Board meeting held on April 23, 2006 had no impact on the stock price of th e company and by selling the shares on April 24, 2006 he had not made any financial gain. It was submitted by him that the sale was not based on any insider information since the decision of the Board had already been sent to the stock exchanges and was disseminated on the website of the stock exchanges. It was further submitted that the sale of shares before expiry of 24 hours of the outcome of the Board meeting being made public was purely an inadvertent and technical error and there was no malafide intention. The appellant also desired to avail the facility of consent order in the proceedin gs. It seems that the consent proceedings 3 failed. The adjudicating officer, by his impugned order, found the appellant guilty of violating Regulation 12(1) read with Clause 3.2-3 and 3.2-5 of the code of conduct specified under Part A of Schedule I of the Regulations and imposed a penalty of Rs.1 crore under section 15HB of the Act. Hence this appeal.
- For the purposes of model code of c onduct for prevention of Insider Trading for
listed companies, under Part A of Schedule I, the term ‘designated employee’ is defined to
include:-
“(1) officers comprising of the top three tiers of company management;
(2) the employees designated by the company to whom these trading
restrictions shall be applicable keep ing in mind the objective of the Code
of conduct.”
Admittedly, the appellant is a shareholder and director of the company and classified as
designated employee under the Regulations. Pa ra 3.2-5 of Part A in Schedule I under the
Regulations provide that all directors/officers/designated employees of the company shall
conduct their dealings in the securities of the company only in a valid trading window and
shall not deal in any transaction involving pu rchase or sale of the company’s securities
during the period when trading window is closed. It also provides that the trading window
shall inter alia be closed at the time of d eclaration of financial results, declaration of
dividend etc. The trading window shall be opened 24 hours after the information regarding
the Board decisions is made public. The company can penalize and take appropriate action
against an employee for contravention of the code of conduct. Such an action by the
company does not preclude the Board from ta king any action in case of violation of the
Regulations. It may also be relevant to state that Regulation 12 of the Regulations
mandates all listed companies to frame a code of conduct of internal proceedings and
conduct as near thereto the model code specif ied in Schedule I of the Regulations. The
company, in compliance with the revised corporate governance norms advised by the
Board, laid down a code of conduct for all Bo ard members and senior management of the
company. The said code of conduct mandated its employees to comply with the company’s
insider trading rules and follow the pre-cl earance procedure for trading and trade only
when the trading window is open. - Mr. Janak Dwarkadas, learned senior coun sel for the appellant argued that the
Regulations essentially prohibit dealing in s ecurities by any person when in possession of 4
unpublished price sensitive information and that the information ceases to be price
sensitive when it reaches the public domain. It was also argued that the rationale of closing
trading window, as contained in clause 3.2-3 of the model code of conduct, is to prevent
insiders from trading in securities while in possession of information which they alone
possess. Referring to the provisions of the model code, it was submitted that the length of
time for which the trading window should be shut is left to the disc retion of the listing
company. The fact that the information on th e outcome of the meeting was communicated
to the exchanges on April 23, 2006 in comp liance with the listing agreement was
demonstrated by the fact of issuance of pre ss release immediately after the meeting on
April 23, 2006. It was also argued that the show cause notice proceeds on the incorrect
presumption that the information is deemed to have been made public only when the
exchange uploads the same on its website. According to him, Regulation 12 of the
Regulations casts a duty upon listed companies to formul ate the code of conduct as
specified therein and it is for the listed comp any concerned to take action for violation of
the code, if any. It was further submitted th at the appellant cannot be proceeded against
under section 15HB of the Act as it cannot be alleged that the appellant had violated any
provisions of the Act or Regulations made thereunder which is a pre-requisite for invoking
the said section. The appellant has neither vi olated any provisions of the Act nor of the
Regulations and hence no penalty can be im posed under section 15HB of the Act.
Assuming that there was any violation of the code of conduct framed by the company, as
mandated by Regulation 12, it was for the company to take action against the appellant and
not for the Board. Learned senior counsel al so pointed out that a show cause notice was
issued to the company also in this case and the request for consent proceedings in respect
of the company was accepted by the Board and the company was let off on payment of a
sum of15 lacs. The appellant also requested fo r consent proceedings but the Board has not agreed to the same and has imposed a penalty of1 crore which is the maximum
penalty prescribed under the Act which, in th e facts and circumstances of the case, is
excessive and uncalled for. Learned senior counsel reiterated that the model code of
conduct prescribed in Schedule I of the Regulations is for the company to be adopted and
hence not a part of the Regulations. Learned senior counsel has also drawn our attention to
some other Regulations framed by the Board under the Act where, according to him code
of conduct is an integral pa rt of the Regulations but in the case in hand, Regulations 5
mandate the company to formulate a code of conduct for its employees based on the model
code of conduct as prescribed in Schedule I of the Regulations. He emphasized that when
the language of a statute is precise and cl ear it cannot be ignored. In support of his
contention, he relied on the decision of the Supreme Court in case of Aphali
Pharmaceuticals Ltd. vs. State of Maharashtra 1989(4) SCC 378 where the Supreme Court
has observed that “expression in the Schedule cannot control or prevail against the express
enactment and in case of any inconsistency between the Schedule and the enactment, the
enactment is to prevail and if any part of the Schedule cannot be made to correspond, it
must yield to the act.” He also made refere nce to the Supreme Court judgment in the case
of R. Kalyani vs. Janak C, Mehta & Ors. 2009 (1) SCC 516 where the Supreme Court has
quoted with approval a passage from Maxwell on interpretation of statutes:-
“The strict construction of penal statut es seems to manifest itself in four
ways: in the requirement of expre ss language for the creation of an
offence; in interpreting strictly wo rds setting out the elements of an
offence; in requiring the fulfillment to the letter of statutory conditions
precedent to the infliction of punishme nt; and in insisting on the strict
observance of technical provisions c oncerning criminal procedure and
jurisdiction.”
According to the counsel, it is not the appellan t’s case that a breach of the code of conduct
is not at all actionable. According to him, su ch action has to be taken by the company and
not by the Board. The appellant had request ed for permission to sell his shares in
accordance with the provisions of the code of conduct. His trades were pre-cleared by the
company. If at all there was any violation, it was on the part of the company and the matter
was settled by the Board with the company on payment of an amount of15 lacs. On the other hand, the appellant has been severely pe nalized by imposing maximum penalty of1,00,00,000 for violation of the code of conduct. - Shri Darius Khambatta, learned Additional Solicitor General who appeared on
behalf of the Board submitted that the undisput ed fact is that the appellant sold 10,00,000
shares of the company on April 24, 2006 before the expiry of 24 hour s of the outcome of
the Board meeting of the company was ma de public. The Regulation mandates the
company to formulate a code of conduct as near thereto the model code of conduct
specified in Schedule I of the Regulations. Su ch a code was in existence which has been
violated by the appellant by trading in shares of the company when the trading window was
closed. The company had prepared its own in ternal code of conduct which prohibited the
designated employees from selling or purchas ing shares during trading period beginning 6
one exclusive day before and concluding on e exclusive day after certain enumerated
corporate actions. In his two letters dated July 22, 2008 and December 19, 2008 the
appellant himself had admitted his lapse statin g that it was an inadvertent and technical
error. The company did not take any action against the appellant because he had resigned
as managing director. If it is held that the Board also cannot take any action against the
appellant because he had violated only the code of conduct formulated by the company, the
appellant will go unpunished for a serious lapse on his part in selling his shares in violation
of the code of conduct. Learned Additiona l Solicitor General further submitted that
Regulations mandate the company to formulate a code of conduct for its employees which
should be in conformity with the model code of conduct as prescribed in Schedule I of the
Regulations. Such a code of conduct is as much a part of the statute as the provisions of
the Regulations itself. Accord ing to him, it is no longer nece ssary for a statute to contain
indulging words providing that the Schedule is to be construed and shall have effect as part
of the Act. In support of his proposition, he relied on the decision of the Supreme Court in
the case of Ujagar Prints vs. Union of India AIR 1989 SC 516, Aphali Pharmaceuticals Ltd.
vs. State of Maharashtra 1989(4) SCC 393 and Bennion on Statutory Interpretation (Fifth
Edition) page 721-723. According to him, th e crucial question is whether or not the
provisions in Schedule I of the Regulations form part of th e Regulations, notwithstanding
that there are no express words in the body of the Regulations providing that the Schedule
is to be construed to have effect as a part thereof. According to him, the question is
squarely answered in the affirmative by the ra tio of the Supreme Court at paragraph 24 in
the case of Ujagar prints. It was further submitted by him that the Board, as a regulator is
the primary enforcing agency in respect of the violations whether of the Regulations or of
any code of conduct framed in accordance with the Regulations. To leave it exclusively to
the companies to enforce individual code of conduct is something that Parliament could not
have intended while enacting the law. The language of the Regul ation 12 makes it clear
that once there is violation of the Regulations then noth ing precludes the Board from
initiating proceedings for such violation. It was, therefore, submitted by him that no
interference is called for in the order passed by the adjudicating officer. - We have considered the submissions made by learned senior counsel for the parties.
We have also perused the documents available on record. It needs to be noted that the
charge against the appellant in the show cause notice is of violating Regulation 12(1) read 7
with clause 3.2-3 and 3.2-5 of the code of cond uct specified under Part A of Schedule I of
the Regulations. In the impugned order, the appellant has been held to be guilty of
violating the provisions of code of conduct only. There is no allegation of insider trading
against the appellant. It is not in dispute that the appellant had sold shares within the period
when trading window was closed and thus viol ated the code of conduc t prescribed by the
company in terms of the obligations imposed upon it under the Regulations. The case of
the appellant is that such vi olation of code of conduct does not amount to violation of the
provisions of the Act or the Regulations framed thereunder and hence not punishable by the
Board. It is for the company alone to take ac tion against the appellants. The question that
needs to be answered, therefore, is whether violation of the code of conduct formulated by
the company in compliance with the requireme nts of Regulations amounts to violation of
Regulations. Let us have a look at the relevant provisio ns of the Regulations. The
Regulations were framed by the Board in exercise of the powers conferred by section 30 of
the Act and with the previous approval of th e Central Government. Regulation 3 thereof
deals with prohibition of dealing, communica ting or counseling in matters relating to
insider trading and inter alia provides that no insider shall either on his own behalf or on
behalf of any other person, deal in securities of a compa ny listed on any stock exchange
when in possession of any unpublished pric e sensitive information. Regulation 12
prescribes code of internal procedures a nd conduct for listed companies and other entities
and reads as under:-
“Code of internal procedures and conduct for listed companies and other
entities. - (1) All listed companies and organisations associated with securities markets
including :
(a) the intermediaries as mentioned in section 12 of the Act, asset
management company and trustees of mutual funds ;
(b) the self-regulatory organisations recognised or authorised by the Board;
(c) the recognised stock exchanges and clearing house or corporations;
(d) the public financial institutions as defined in section 4A of the
Companies Act, 1956; and
(e) the professional firms such as audito rs, accountancy firms, law firms,
analysts, consultants, etc., assisting or advising listed companies,
shall frame a code of internal proce dures and conduct as near thereto the
Model Code specified in Schedule I of these Regulations without diluting it in
any manner and ensure compliance of the same.
(2) The entities mentioned in sub-regulat ion (1), shall abide by the code of
Corporate Disclosure Practices as specified in Schedule II of these
Regulations.
8
(3) All entities mentione d in sub-regulation (1), shall adopt appropriate
mechanisms and procedures to en force the codes specified under sub-
regulations (1) and (2).
(4) Action taken by the entities mentione d in sub-regulation (1) against any
person for violation of the code under sub-regulation (3) shall not preclude the
Board from initiating proceedings for violation of these Regulations.”
Para 3 of the model code of conduct for preven tion of insider trading for listed companies,
as prescribed in Schedule I of the Regulations, makes provisions for prevention and misuse
of price sensitive information and relevant portion thereof reads as under:-
“3.0 Prevention of misuse of “Price Sensitive Information”
3.1 All directors/officers and designate d employees of the company shall
be subject to trading restrictions as enumerated below.
3.2 Trading window
3.2.1 The company shall specify a trading period, to be called “trading
window”, for trading in the compa ny’s securities. The trading window
shall be closed during the time the in formation referred to in para 3.2.3 is
unpublished.
3.2.2 When the trading window is close d, the employees/directors shall
not trade in the company’s securities in such period.
3.2.3 The trading window shall be, inter alia, closed at the time :—
(a) Declaration of financial results (quarterly, half-yearly and annually).
(b) Declaration of dividends (interim and final).
(c) Issue of securities by way of public/rights/bonus etc.
(d) Any major expansion plans or execution of new projects.
(e) Amalgamation, mergers, takeovers and buy-back.
(f) Disposal of whole or substantially whole of the undertaking.
(g) Any changes in policies, plans or operations of the company.
3.2.3A The time for commencement of closing of trading window shall be
decided by the company.
3.2-4 The trading window shall be opened 24 hours after the information
referred to in para 3.2.3 is made public.
3.2-5 All directors/officers/designated employees of the company shall
conduct all their dealings in the securities of the Company only in a valid
trading window and shall not deal in any transaction involving the
purchase or sale of the company’s securities during the periods when
trading window is closed, as referred to in para 3.2-3 or during any other
period as may be specified by the Company from time to time.”
Paragraph 5 of the code of conduct provide fo r reporting requirements for transactions in
securities by all directors/officers/designated employees and the compliance officer of the
company is required to maintain records of a ll such declaration in the appropriate form.
Paragraph 6 thereof makes provision for penalt y for contravention of code of conduct and
reads as under:-
9
“6.0 Penalty for contravention of code of conduct
6.1 Any employee/officer/director w ho trades in securities or
communicates any information for trading in securities in contravention of
the code of conduct may be penalised and appropriate action may be taken
by the company.
6.2 Employees/officers/directors of the company who violate the code of
conduct shall also be subject to disciplinary action by the company, which
may include wage freeze, suspension, in eligible for future participation in
employee stock option plans, etc.
6.3 The action by the company shall not preclude SEBI from taking any
action in case of violation of SEBI (Prohibition of Insider Trading)
Regulations, 1992.”
- The company, vide letter dated February 25, 2003, had circulated a copy of the code
of conduct to its officers including the appellant with a request to adhere to the provisions
of the code and provide timely disclosures as st ated therein. The main objective of the said
circular was stated to be to prohibit the use of inside information and other price sensitive
information to gain an advantage therefrom as compared to general investors while dealing
in shares and securities of listed companies. The said circular makes a specific provision
that any sale/purchase or acquisiti on of shares and securities by all
directors/officers/designated employees shal l not be allowed durin g a period of one
exclusive day before and conclude one exclus ive day after the specified corporate actions
which include declaration of financial result s and declaration of dividends etc. The
company had also issued another circular on April 1, 2006 in compliance with the revised
corporate governance norms advised by the Board vide its circular dated October 29, 2004
laying down code of conduct for all board members and senior management of the
company. A copy of this letter is addressed to the appellant also. The said instructions
mandate that the designated persons should comply with the comp anies insider trading
rules, follow the pre-clearance procedure for trading and trade only during the trading
window. It also provides that any sale/purchas e or acquisition of shares and securities by
all directors/officers/designated employees sh all not be allowed during a period of one
exclusive day and conclude one exclusive day after the specified corporate action including
declaration of financial results and declaration of dividends. - Having considered the submissions made by learned counsel for the parties and
after going through the records and the provisions of the regulations referred to above, we
are of the considered view that the only possible conclusion that can be arrived at is that 10
the code of conduct prescribed by the comp any for prevention of insider trading as
mandated by the Regulations for all practical pur poses is to be treated as a part of the
Regulations and any violation of the code of conduct can be dealt with by the Board as
violation of the Regulations framed by it. It needs to be appreciated that each company
may like to add certain activities regulation of which may be necessary for preservation of
price sensitive information. The Board, ca nnot foresee all such contingencies and,
therefore, it has laid down model code of conduct prescribing bare minimum conduct
expected from the directors/designated employees of the companies. The framing of code
of conduct as near to the model code of conduct specified in the Schedule to the
Regulations is mandatory for each company. The use of the word “shall” makes it
abundantly clear that this is a bare minimu m conduct expected from the employees of the
company. Paragraph 6 of the model code of conduct also makes it clear that the action by
the company shall not preclude the Board from taking any action in case of violation of the
Regulations. - Mr. Dwarkadas, learned senior counsel for the appellant, tried to distinguish the
model code of conduct as pres cribed in the Regulations fr om the code of conduct as
prescribed in other Regulations framed by the Board and contended that it is only where the
code of conduct forms part of the Regulation, the violation of the code of conduct, will
become punishable for violation of Regulations but if the code of conduct is prescribed by
the company on the basis of model code of con duct given in the Regulations, such code of
conduct will not be punishable with violati on of the code of conduct framed under the
Regulations. We do not agree with him. As st ated above, the different nomenclature given
to the code of conduct as a model code of c onduct is to provide sufficient leverage to the
company to make additions to the bare minimum code as prescribed in the Schedule to the
Regulations. - The provisions of the Regulations have to be interpreted keeping in view the aims
and objectives of the Act. The main object of th e Act is to protect the interest of investors
in securities and to promote the development of and to regulate the securities market. In
case the interpretation given by learned senior counsel for the appellant is accepted, it may
lead to a situation where a person is not punish ed by the company for violating the code of
conduct based on the model code of conduct pres cribed in the Regulations and the Board
finds itself unable to take action because the code of conduct is framed by the company. In 11
fact this is what has precisely happened in this case. The company vide its letter dated
February 11, 2008 has informed the Board that the appellant resigned from the office of the
Managing Director and it was not possible to persue any action against him and the
company decided to close the matter. We ha ve given our thoughtful consideration to the
judgments cited by learned senior counsel for the appellant and we are of the considered
view that the ratio of those judgments is not applicable to the case in hand. The purpose of
the insider trading regulations is to prohibit trading by which an insider gains advantages
by virtue of his access to price sensitive information. The evil of insider trading is well
recognized. A construction should be adopted that advance rather than suppress this object.
To adopt the construction as suggested by lear ned senior counsel for the appellant would
result in allowing insider trading within a period set by the Board or by the company during
which no trading is permissible. In the case of L.I.C. vs . Escorts Ltd. 1986 (1) SCC 264,
relied upon by the learned counsel for the appell ant, the Supreme Court merely held that
the provision of the Forei gn Exchange Manual under cons ideration was by way of a
suggestion rather than a mandate and that a form could not control the provisions of the
Act. This is not the case here. In Pepsico India Holdin g P. Ltd. vs. Food Inspector,
decided by the Supreme Court on November 18, 2010, the Act did not contain any
prescribed and validated method of analysis and hence it was held that there had been no
violation by not sending a sample to Forensic Laboratory for testing with regard to any
different tolerance limit as to the presence of pesticides. This case has no application to the
facts of the present case sinc e Schedule I is a part of th e Regulations and mandates the
company to formulate a code of conduct as prescribed therein. - We are, therefore, of the considered view that violation of the code of conduct, as
framed by the company in accordance with the mandates prescribed in the Regulations, is
nothing but part of the Regula tions and any violation thereo f is punishable by the Board
also as violation of the Regulations in addi tion to such action that may be taken by the
company. Any other view taken in the facts an d circumstances of the case will defeat the
very purpose of the Regulations in question. - We would now like to deal with the i ssue of penalty imposed on the appellant by
the Board. The learned counsel for the appell ant has placed on record a copy of the order
showing that adjudication proceedings were in itiated against the company also for alleged
opening of the trading window before the expi ry of 24 hours thereby violating Regulation 12
12(1) read with clause 3.2-3 and 3.2-4 of the code of c onduct specified under Part A of
Schedule I to the Regulations. The company had settled the dispute with the Board by
payment of a settlement amount of15 lacs but the appellant has been severely punished. Learned senior counsel for the appellant submitted that if a breach by the listed company in administering the code of conduct in a manner th at fell short of compliance is treated as a technical violation, it is not open to the Board to treat the appe llant’s sale of shares as a substantive violation warranting the maximum penalty that can be imposed for violation of the insider trading regulations. We find merit in this argument of learned senior counsel for the appellant. The charge is not of violation of insider tr ading regulations but only of violation of the code of c onduct by selling shares during th e period when trading window was closed and after the decision of the Bo ard was communicated to the stock exchanges and disseminated on their websites. The comp any has also settled the dispute with the Board on payment of settlement amount of15 lacs. In the facts and circumstances of the
case, we are of the considered view that the ends of justice would be met if the penalty
under section 15HB of the Act is reduced to25 lacs. We order accordingly. In the result, we uphold the finding of the adjudicating officer that the appellant had violated the provisions of the code of conduct framed under the Regulations and is liable to penalty under section 15HB of the Act. However, th e amount of penalty is reduced to25 lacs. There will be no order as to costs.
Sd/-
P.K. Malhotra
Member
I have gone through the order prepared by the learned Member and I agree that
the appellant is guilty of violating the code of conduct as alleged and that the penalty be
reduced to ` 25 lacs.
Sd/-
Justice N.K.Sodhi
Presiding Officer
I also agree.
Sd/-
S.S.N. Moorthy
Member
27.05.2011
Prepared & Compared by:
RHN/PMB
BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Appeal No.132 of 2010
Date of Decision : 27.05.2011
Mr. Manmohan Shetty
21, Golden Beach, Ruia Park,
Juhu, Mumbai.
…..Appellant Versus
The Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A,
G Block, Bandra Kurla Complex, Mumbai.
…...Respondent Mr. Janak Dwarkadas, Senior Advocate with Mr. Somasekhar S undaresan,
Mr. Ravichandra Hedge and Ms. Farah Karachiwala, Advocates for the Appellant.
Mr. Darius Khambatta, Additional Solic itor General with Mr. Shiraz Rustomjee,
Mr. Mihir Mody and Mr. Karan Vyas, Advocates for the Respondent.
CORAM : Justice N. K. Sodhi, Presiding Officer
P.K. Malhotra, Member
S. S. N. Moorthy, Member
Per : P.K. Malhotra, Member
This appeal has been filed by the appe llant against the order dated June 9, 2010
passed by the adjudicating officer of the Secu rities and Exchange Board of India (for
short the Board) holding the appellant guilty of violating the provisions of the code of
conduct prescribed under the Securities and Exchange Board of India (Prohibition of
Insider Trading) Regulations, 1992 (for short the Regulations) and imposing a monetary
penalty of `1,00,00,000 (Rupees one crore only) under section 15H B of the Securities
and Exchange Board of India Act, 1992 (for short the Act).
- The facts of the case, in brief, are that the Board conducted investigations into the
alleged irregularities in the trading in the shares of Adlabs Films Limited (for short the
company) and the possible violation of the provisions of the Act and the Regulations
made thereunder. The appellant is a shareh older and director of the company. He was
holding 82,91,234 shares and was also classifi ed as ‘designated employee’ under the
Regulations. On April 23, 2006 the company held its board meeting to approve the
audited accounts for the financial year ending March 31, 2006; to recommend dividend
and to consider proposal for demerger of the company’s FM radio business. The Board of
Directors of the company approved the proposal for demerger of the FM radio business to
a wholly owned subsidiary company (SPV) and also issuance of pro rata shares by SPV 2
to the existing shareholders of the company in the ratio of two shares of the SPV for
every one share of the company. The comp any also recommended a dividend of 45 per
cent for the year ending March 31, 2006. - The company sent the information about the decision of the Board of Directors
recommending dividend to the National St ock Exchange (NSE) on April 24, 2006 at
09.21 hours and the NSE disseminated the information on its website on the same day at
09:40:44 hours. The required in formation was also sent by the company to the Bombay
Stock Exchange (BSE) on April 23, 2006 (Sunday) at 10:47 hours and the BSE
disseminated the said information on its we bsite on April 24, 2006 at 09:53:25 hours.
The decision regarding demerger of FM radi o business was also sent by the company to
NSE on April 24, 2006 at 09.21 hours which was disseminated by NSE on its website at
09:40:44 hours. The same information wa s sent by the company to BSE on April 23,
2006 at 10:46 hours which was disseminated by BSE on its website at 09:56:35 hours on
April 24, 2006. It was noted by the Board from the trade logs and order logs of April 24,
2006 that the appellant had sold 10,00,000 shares of the company. 7,50,000 shares were
sold between 10:11:30 hours to 10:12:34 hours and 2,50,000 shares were sold at 15:16:44
hours. The sale of 10,00,000 shares was repor ted to BSE under bulk deal. The Board
observed that the appellant had sold these shar es of the company before the expiry of 24
hours of the outcome of the Board being made public and thus violated Regulation 12(1)
read with clauses 3.2-3 and 3.2-5 of the code of conduct prescribed under Part A of
Schedule I of the Regulations. Adjudication proceedings were initiated and a show cause
notice was issued to the appellant on Febr uary 21, 2008. The appellant responded to the
same by his letter dated April 10, 2008 denying th e allegation and stating that the sale of
shares was a normal market transaction. The outcome of the Board meeting held on April
23, 2006 had no impact on the stock price of th e company and by selling the shares on
April 24, 2006 he had not made any financial gain. It was submitted by him that the sale
was not based on any insider information si nce the decision of th e Board had already
been sent to the stock exchanges and was disseminated on the website of the stock
exchanges. It was further submitted that the sale of shares before expiry of 24 hours of
the outcome of the Board meeting being made public was purely an inadvertent and
technical error and there was no malafide inte ntion. The appellant al so desired to avail
the facility of consent order in the proceedin gs. It seems that the consent proceedings 3
failed. The adjudicating officer, by his impug ned order, found the appellant guilty of
violating Regulation 12(1) read with Clau se 3.2-3 and 3.2-5 of the code of conduct
specified under Part A of Schedule I of th e Regulations and imposed a penalty of Rs.1
crore under section 15HB of the Act. Hence this appeal. - For the purposes of model code of c onduct for prevention of Insider Trading for
listed companies, under Part A of Schedule I, the term ‘designated employee’ is defined to
include:-
“(1) officers comprising of the top three tiers of company management;
(2) the employees designated by the company to whom these trading
restrictions shall be applicable keep ing in mind the objective of the Code
of conduct.”
Admittedly, the appellant is a shareholder and director of the company and classified as
designated employee under the Regulations. Pa ra 3.2-5 of Part A in Schedule I under the
Regulations provide that all directors/officers/designated employees of the company shall
conduct their dealings in the securities of the company only in a valid trading window and
shall not deal in any transaction involving pu rchase or sale of the company’s securities
during the period when trading window is closed. It also provides that the trading window
shall inter alia be closed at the time of d eclaration of financial results, declaration of
dividend etc. The trading window shall be opened 24 hours after the information regarding
the Board decisions is made public. The company can penalize and take appropriate action
against an employee for contravention of the code of conduct. Such an action by the
company does not preclude the Board from ta king any action in case of violation of the
Regulations. It may also be relevant to state that Regulation 12 of the Regulations
mandates all listed companies to frame a code of conduct of internal proceedings and
conduct as near thereto the model code specif ied in Schedule I of the Regulations. The
company, in compliance with the revised corporate governance norms advised by the
Board, laid down a code of conduct for all Bo ard members and senior management of the
company. The said code of conduct mandated its employees to comply with the company’s
insider trading rules and follow the pre-cl earance procedure for trading and trade only
when the trading window is open. - Mr. Janak Dwarkadas, learned senior coun sel for the appellant argued that the
Regulations essentially prohibit dealing in s ecurities by any person when in possession of 4
unpublished price sensitive information and that the information ceases to be price
sensitive when it reaches the public domain. It was also argued that the rationale of closing
trading window, as contained in clause 3.2-3 of the model code of conduct, is to prevent
insiders from trading in securities while in possession of information which they alone
possess. Referring to the provisions of the model code, it was submitted that the length of
time for which the trading window should be shut is left to the disc retion of the listing
company. The fact that the information on th e outcome of the meeting was communicated
to the exchanges on April 23, 2006 in comp liance with the listing agreement was
demonstrated by the fact of issuance of pre ss release immediately after the meeting on
April 23, 2006. It was also argued that the show cause notice proceeds on the incorrect
presumption that the information is deemed to have been made public only when the
exchange uploads the same on its website. According to him, Regulation 12 of the
Regulations casts a duty upon listed companies to formul ate the code of conduct as
specified therein and it is for the listed comp any concerned to take action for violation of
the code, if any. It was further submitted th at the appellant cannot be proceeded against
under section 15HB of the Act as it cannot be alleged that the appellant had violated any
provisions of the Act or Regulations made thereunder which is a pre-requisite for invoking
the said section. The appellant has neither vi olated any provisions of the Act nor of the
Regulations and hence no penalty can be im posed under section 15HB of the Act.
Assuming that there was any violation of the code of conduct framed by the company, as
mandated by Regulation 12, it was for the company to take action against the appellant and
not for the Board. Learned senior counsel al so pointed out that a show cause notice was
issued to the company also in this case and the request for consent proceedings in respect
of the company was accepted by the Board and the company was let off on payment of a
sum of15 lacs. The appellant also requested fo r consent proceedings but the Board has not agreed to the same and has imposed a penalty of1 crore which is the maximum
penalty prescribed under the Act which, in th e facts and circumstances of the case, is
excessive and uncalled for. Learned senior counsel reiterated that the model code of
conduct prescribed in Schedule I of the Regulations is for the company to be adopted and
hence not a part of the Regulations. Learned senior counsel has also drawn our attention to
some other Regulations framed by the Board under the Act where, according to him code
of conduct is an integral pa rt of the Regulations but in the case in hand, Regulations 5
mandate the company to formulate a code of conduct for its employees based on the model
code of conduct as prescribed in Schedule I of the Regulations. He emphasized that when
the language of a statute is precise and cl ear it cannot be ignored. In support of his
contention, he relied on the decision of the Supreme Court in case of Aphali
Pharmaceuticals Ltd. vs. State of Maharashtra 1989(4) SCC 378 where the Supreme Court
has observed that “expression in the Schedule cannot control or prevail against the express
enactment and in case of any inconsistency between the Schedule and the enactment, the
enactment is to prevail and if any part of the Schedule cannot be made to correspond, it
must yield to the act.” He also made refere nce to the Supreme Court judgment in the case
of R. Kalyani vs. Janak C, Mehta & Ors. 2009 (1) SCC 516 where the Supreme Court has
quoted with approval a passage from Maxwell on interpretation of statutes:-
“The strict construction of penal statut es seems to manifest itself in four
ways: in the requirement of expre ss language for the creation of an
offence; in interpreting strictly wo rds setting out the elements of an
offence; in requiring the fulfillment to the letter of statutory conditions
precedent to the infliction of punishme nt; and in insisting on the strict
observance of technical provisions c oncerning criminal procedure and
jurisdiction.”
According to the counsel, it is not the appellan t’s case that a breach of the code of conduct
is not at all actionable. According to him, su ch action has to be taken by the company and
not by the Board. The appellant had request ed for permission to sell his shares in
accordance with the provisions of the code of conduct. His trades were pre-cleared by the
company. If at all there was any violation, it was on the part of the company and the matter
was settled by the Board with the company on payment of an amount of15 lacs. On the other hand, the appellant has been severely pe nalized by imposing maximum penalty of1,00,00,000 for violation of the code of conduct. - Shri Darius Khambatta, learned Additional Solicitor General who appeared on
behalf of the Board submitted that the undisput ed fact is that the appellant sold 10,00,000
shares of the company on April 24, 2006 before the expiry of 24 hour s of the outcome of
the Board meeting of the company was ma de public. The Regulation mandates the
company to formulate a code of conduct as near thereto the model code of conduct
specified in Schedule I of the Regulations. Su ch a code was in existence which has been
violated by the appellant by trading in shares of the company when the trading window was
closed. The company had prepared its own in ternal code of conduct which prohibited the
designated employees from selling or purchas ing shares during trading period beginning 6
one exclusive day before and concluding on e exclusive day after certain enumerated
corporate actions. In his two letters dated July 22, 2008 and December 19, 2008 the
appellant himself had admitted his lapse statin g that it was an inadvertent and technical
error. The company did not take any action against the appellant because he had resigned
as managing director. If it is held that the Board also cannot take any action against the
appellant because he had violated only the code of conduct formulated by the company, the
appellant will go unpunished for a serious lapse on his part in selling his shares in violation
of the code of conduct. Learned Additiona l Solicitor General further submitted that
Regulations mandate the company to formulate a code of conduct for its employees which
should be in conformity with the model code of conduct as prescribed in Schedule I of the
Regulations. Such a code of conduct is as much a part of the statute as the provisions of
the Regulations itself. Accord ing to him, it is no longer nece ssary for a statute to contain
indulging words providing that the Schedule is to be construed and shall have effect as part
of the Act. In support of his proposition, he relied on the decision of the Supreme Court in
the case of Ujagar Prints vs. Union of India AIR 1989 SC 516, Aphali Pharmaceuticals Ltd.
vs. State of Maharashtra 1989(4) SCC 393 and Bennion on Statutory Interpretation (Fifth
Edition) page 721-723. According to him, th e crucial question is whether or not the
provisions in Schedule I of the Regulations form part of th e Regulations, notwithstanding
that there are no express words in the body of the Regulations providing that the Schedule
is to be construed to have effect as a part thereof. According to him, the question is
squarely answered in the affirmative by the ra tio of the Supreme Court at paragraph 24 in
the case of Ujagar prints. It was further submitted by him that the Board, as a regulator is
the primary enforcing agency in respect of the violations whether of the Regulations or of
any code of conduct framed in accordance with the Regulations. To leave it exclusively to
the companies to enforce individual code of conduct is something that Parliament could not
have intended while enacting the law. The language of the Regul ation 12 makes it clear
that once there is violation of the Regulations then noth ing precludes the Board from
initiating proceedings for such violation. It was, therefore, submitted by him that no
interference is called for in the order passed by the adjudicating officer. - We have considered the submissions made by learned senior counsel for the parties.
We have also perused the documents available on record. It needs to be noted that the
charge against the appellant in the show cause notice is of violating Regulation 12(1) read 7
with clause 3.2-3 and 3.2-5 of the code of cond uct specified under Part A of Schedule I of
the Regulations. In the impugned order, the appellant has been held to be guilty of
violating the provisions of code of conduct only. There is no allegation of insider trading
against the appellant. It is not in dispute that the appellant had sold shares within the period
when trading window was closed and thus viol ated the code of conduc t prescribed by the
company in terms of the obligations imposed upon it under the Regulations. The case of
the appellant is that such vi olation of code of conduct does not amount to violation of the
provisions of the Act or the Regulations framed thereunder and hence not punishable by the
Board. It is for the company alone to take ac tion against the appellants. The question that
needs to be answered, therefore, is whether violation of the code of conduct formulated by
the company in compliance with the requireme nts of Regulations amounts to violation of
Regulations. Let us have a look at the relevant provisio ns of the Regulations. The
Regulations were framed by the Board in exercise of the powers conferred by section 30 of
the Act and with the previous approval of th e Central Government. Regulation 3 thereof
deals with prohibition of dealing, communica ting or counseling in matters relating to
insider trading and inter alia provides that no insider shall either on his own behalf or on
behalf of any other person, deal in securities of a compa ny listed on any stock exchange
when in possession of any unpublished pric e sensitive information. Regulation 12
prescribes code of internal procedures a nd conduct for listed companies and other entities
and reads as under:-
“Code of internal procedures and conduct for listed companies and other
entities. - (1) All listed companies and organisations associated with securities markets
including :
(a) the intermediaries as mentioned in section 12 of the Act, asset
management company and trustees of mutual funds ;
(b) the self-regulatory organisations recognised or authorised by the Board;
(c) the recognised stock exchanges and clearing house or corporations;
(d) the public financial institutions as defined in section 4A of the
Companies Act, 1956; and
(e) the professional firms such as audito rs, accountancy firms, law firms,
analysts, consultants, etc., assisting or advising listed companies,
shall frame a code of internal proce dures and conduct as near thereto the
Model Code specified in Schedule I of these Regulations without diluting it in
any manner and ensure compliance of the same.
(2) The entities mentioned in sub-regulat ion (1), shall abide by the code of
Corporate Disclosure Practices as specified in Schedule II of these
Regulations.
8
(3) All entities mentione d in sub-regulation (1), shall adopt appropriate
mechanisms and procedures to en force the codes specified under sub-
regulations (1) and (2).
(4) Action taken by the entities mentione d in sub-regulation (1) against any
person for violation of the code under sub-regulation (3) shall not preclude the
Board from initiating proceedings for violation of these Regulations.”
Para 3 of the model code of conduct for preven tion of insider trading for listed companies,
as prescribed in Schedule I of the Regulations, makes provisions for prevention and misuse
of price sensitive information and relevant portion thereof reads as under:-
“3.0 Prevention of misuse of “Price Sensitive Information”
3.1 All directors/officers and designate d employees of the company shall
be subject to trading restrictions as enumerated below.
3.2 Trading window
3.2.1 The company shall specify a trading period, to be called “trading
window”, for trading in the compa ny’s securities. The trading window
shall be closed during the time the in formation referred to in para 3.2.3 is
unpublished.
3.2.2 When the trading window is close d, the employees/directors shall
not trade in the company’s securities in such period.
3.2.3 The trading window shall be, inter alia, closed at the time :—
(a) Declaration of financial results (quarterly, half-yearly and annually).
(b) Declaration of dividends (interim and final).
(c) Issue of securities by way of public/rights/bonus etc.
(d) Any major expansion plans or execution of new projects.
(e) Amalgamation, mergers, takeovers and buy-back.
(f) Disposal of whole or substantially whole of the undertaking.
(g) Any changes in policies, plans or operations of the company.
3.2.3A The time for commencement of closing of trading window shall be
decided by the company.
3.2-4 The trading window shall be opened 24 hours after the information
referred to in para 3.2.3 is made public.
3.2-5 All directors/officers/designated employees of the company shall
conduct all their dealings in the securities of the Company only in a valid
trading window and shall not deal in any transaction involving the
purchase or sale of the company’s securities during the periods when
trading window is closed, as referred to in para 3.2-3 or during any other
period as may be specified by the Company from time to time.”
Paragraph 5 of the code of conduct provide fo r reporting requirements for transactions in
securities by all directors/officers/designated employees and the compliance officer of the
company is required to maintain records of a ll such declaration in the appropriate form.
Paragraph 6 thereof makes provision for penalt y for contravention of code of conduct and
reads as under:-
9
“6.0 Penalty for contravention of code of conduct
6.1 Any employee/officer/director w ho trades in securities or
communicates any information for trading in securities in contravention of
the code of conduct may be penalised and appropriate action may be taken
by the company.
6.2 Employees/officers/directors of the company who violate the code of
conduct shall also be subject to disciplinary action by the company, which
may include wage freeze, suspension, in eligible for future participation in
employee stock option plans, etc.
6.3 The action by the company shall not preclude SEBI from taking any
action in case of violation of SEBI (Prohibition of Insider Trading)
Regulations, 1992.”
- The company, vide letter dated February 25, 2003, had circulated a copy of the code
of conduct to its officers including the appellant with a request to adhere to the provisions
of the code and provide timely disclosures as st ated therein. The main objective of the said
circular was stated to be to prohibit the use of inside information and other price sensitive
information to gain an advantage therefrom as compared to general investors while dealing
in shares and securities of listed companies. The said circular makes a specific provision
that any sale/purchase or acquisiti on of shares and securities by all
directors/officers/designated employees shal l not be allowed durin g a period of one
exclusive day before and conclude one exclus ive day after the specified corporate actions
which include declaration of financial result s and declaration of dividends etc. The
company had also issued another circular on April 1, 2006 in compliance with the revised
corporate governance norms advised by the Board vide its circular dated October 29, 2004
laying down code of conduct for all board members and senior management of the
company. A copy of this letter is addressed to the appellant also. The said instructions
mandate that the designated persons should comply with the comp anies insider trading
rules, follow the pre-clearance procedure for trading and trade only during the trading
window. It also provides that any sale/purchas e or acquisition of shares and securities by
all directors/officers/designated employees sh all not be allowed during a period of one
exclusive day and conclude one exclusive day after the specified corporate action including
declaration of financial results and declaration of dividends. - Having considered the submissions made by learned counsel for the parties and
after going through the records and the provisions of the regulations referred to above, we
are of the considered view that the only possible conclusion that can be arrived at is that 10
the code of conduct prescribed by the comp any for prevention of insider trading as
mandated by the Regulations for all practical pur poses is to be treated as a part of the
Regulations and any violation of the code of conduct can be dealt with by the Board as
violation of the Regulations framed by it. It needs to be appreciated that each company
may like to add certain activities regulation of which may be necessary for preservation of
price sensitive information. The Board, ca nnot foresee all such contingencies and,
therefore, it has laid down model code of conduct prescribing bare minimum conduct
expected from the directors/designated employees of the companies. The framing of code
of conduct as near to the model code of conduct specified in the Schedule to the
Regulations is mandatory for each company. The use of the word “shall” makes it
abundantly clear that this is a bare minimu m conduct expected from the employees of the
company. Paragraph 6 of the model code of conduct also makes it clear that the action by
the company shall not preclude the Board from taking any action in case of violation of the
Regulations. - Mr. Dwarkadas, learned senior counsel for the appellant, tried to distinguish the
model code of conduct as pres cribed in the Regulations fr om the code of conduct as
prescribed in other Regulations framed by the Board and contended that it is only where the
code of conduct forms part of the Regulation, the violation of the code of conduct, will
become punishable for violation of Regulations but if the code of conduct is prescribed by
the company on the basis of model code of con duct given in the Regulations, such code of
conduct will not be punishable with violati on of the code of conduct framed under the
Regulations. We do not agree with him. As st ated above, the different nomenclature given
to the code of conduct as a model code of c onduct is to provide sufficient leverage to the
company to make additions to the bare minimum code as prescribed in the Schedule to the
Regulations. - The provisions of the Regulations have to be interpreted keeping in view the aims
and objectives of the Act. The main object of th e Act is to protect the interest of investors
in securities and to promote the development of and to regulate the securities market. In
case the interpretation given by learned senior counsel for the appellant is accepted, it may
lead to a situation where a person is not punish ed by the company for violating the code of
conduct based on the model code of conduct pres cribed in the Regulations and the Board
finds itself unable to take action because the code of conduct is framed by the company. In 11
fact this is what has precisely happened in this case. The company vide its letter dated
February 11, 2008 has informed the Board that the appellant resigned from the office of the
Managing Director and it was not possible to persue any action against him and the
company decided to close the matter. We ha ve given our thoughtful consideration to the
judgments cited by learned senior counsel for the appellant and we are of the considered
view that the ratio of those judgments is not applicable to the case in hand. The purpose of
the insider trading regulations is to prohibit trading by which an insider gains advantages
by virtue of his access to price sensitive information. The evil of insider trading is well
recognized. A construction should be adopted that advance rather than suppress this object.
To adopt the construction as suggested by lear ned senior counsel for the appellant would
result in allowing insider trading within a period set by the Board or by the company during
which no trading is permissible. In the case of L.I.C. vs . Escorts Ltd. 1986 (1) SCC 264,
relied upon by the learned counsel for the appell ant, the Supreme Court merely held that
the provision of the Forei gn Exchange Manual under cons ideration was by way of a
suggestion rather than a mandate and that a form could not control the provisions of the
Act. This is not the case here. In Pepsico India Holdin g P. Ltd. vs. Food Inspector,
decided by the Supreme Court on November 18, 2010, the Act did not contain any
prescribed and validated method of analysis and hence it was held that there had been no
violation by not sending a sample to Forensic Laboratory for testing with regard to any
different tolerance limit as to the presence of pesticides. This case has no application to the
facts of the present case sinc e Schedule I is a part of th e Regulations and mandates the
company to formulate a code of conduct as prescribed therein. - We are, therefore, of the considered view that violation of the code of conduct, as
framed by the company in accordance with the mandates prescribed in the Regulations, is
nothing but part of the Regula tions and any violation thereo f is punishable by the Board
also as violation of the Regulations in addi tion to such action that may be taken by the
company. Any other view taken in the facts an d circumstances of the case will defeat the
very purpose of the Regulations in question. - We would now like to deal with the i ssue of penalty imposed on the appellant by
the Board. The learned counsel for the appell ant has placed on record a copy of the order
showing that adjudication proceedings were in itiated against the company also for alleged
opening of the trading window before the expi ry of 24 hours thereby violating Regulation 12
12(1) read with clause 3.2-3 and 3.2-4 of the code of c onduct specified under Part A of
Schedule I to the Regulations. The company had settled the dispute with the Board by
payment of a settlement amount of15 lacs but the appellant has been severely punished. Learned senior counsel for the appellant submitted that if a breach by the listed company in administering the code of conduct in a manner th at fell short of compliance is treated as a technical violation, it is not open to the Board to treat the appe llant’s sale of shares as a substantive violation warranting the maximum penalty that can be imposed for violation of the insider trading regulations. We find merit in this argument of learned senior counsel for the appellant. The charge is not of violation of insider tr ading regulations but only of violation of the code of c onduct by selling shares during th e period when trading window was closed and after the decision of the Bo ard was communicated to the stock exchanges and disseminated on their websites. The comp any has also settled the dispute with the Board on payment of settlement amount of15 lacs. In the facts and circumstances of the
case, we are of the considered view that the ends of justice would be met if the penalty
under section 15HB of the Act is reduced to25 lacs. We order accordingly. In the result, we uphold the finding of the adjudicating officer that the appellant had violated the provisions of the code of conduct framed under the Regulations and is liable to penalty under section 15HB of the Act. However, th e amount of penalty is reduced to25 lacs. There will be no order as to costs.
Sd/-
P.K. Malhotra
Member
I have gone through the order prepared by the learned Member and I agree that
the appellant is guilty of violating the code of conduct as alleged and that the penalty be
reduced to ` 25 lacs.
Sd/-
Justice N.K.Sodhi
Presiding Officer
I also agree.
Sd/-
S.S.N. Moorthy
Member
27.05.2011
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