BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI

Appeal No. 223 of 2012

Date of Decision : 21.02.2013

Dilip S. Mehta
(Prop. Dilip S. Mehta & Co)
101/102, Chartered House,
293/297, Dr. C.H. Street,
Near Marine Lines,
Mumbai – 400002.

…App ellant

Versus

Securities and Exchange Board of India,
SEBI Bhavan, Plot No. C-4A, G-Block,
Bandra-Kurla Complex, Bandra (East),
Mumbai – 400 051.

…Respondent

Dr. S.K. Jain, Practicing Company Secretary for the Appellant.

Mr. Mihir Mody, Advocate for the Respondent.

CORAM : P.K. Malhotra, Member & Presiding Officer ( Offg.)
Jog Singh, Member

Per : P.K. Malhotra (Oral)

The appellant is aggrieved by the order dated September 24, 2012 passed by

the adjudicating officer of the Securities and Exchange Board of India (for short

Board) imposing a penalty of ` 6 lakhs under section 15A(a) of the Securities and

Exchange Board of India Act, 1992 ( the Act) for violating the provisions of Sections

11C(2), 11C(3) and 11C(5) of the Act.

2. The appellant was issued two summons, one on February 23, 2011 and second

on May 9, 2011 asking the appellant to furnish certain information with reference to

the investigation initiated by the Board in the scrip of Bank of Rajasthan Limited.

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Admittedly, the appellant has not responded to the summons. The appellant is

disputing receipt of the second summons, although the acknowledgement has been

produced by the respondent Board. It is the case of the appellant that the signature on

this acknowledgement is not of any one of the employees of his company. With

regard to the first summons, which was admittedly received by the appellant, it is

submitted that the appellant was under the impression that the summons were

wrongly addressed to him. It was further contended that the appellant was not

connected with the Bank of Rajasthan Ltd. at all and had never purchased any share

of that bank. The appellant received the summons as one Ms. Sangeeta Sawant who

was said to be director of a large number of companies was connected with the

promoters of the Bank of Rajasthan Ltd. and she was working with the appellant. In

his reply before the Board, the appellant had apologized for not appearing and

clearing his position and requested that he may be pardoned. However, the Board has

imposed a penalty of ` 6 lakhs based on the ground that the appellant has not

responded to two summons whereas, the appellant had received only one summons.

Therefore, according to the appellant, the penalty imposed by the adjudicating officer

based on the alleged non-compliance of two summons by the appellant is excessive

and exorbitant.

3. We have heard the learned counsel for the parties and have perused the

records. Even if we accept the argument of the learned counsel for the appellant that

the second summons was not received, the fact remains that the appellant has not

responded to the first summons issued on February 23, 2011. The only defence

offered by him is that he was under the impression that summons has been wrongly

addressed to him. This reason cannot be accepted. If the appellant was of the view

that the summons was wrongly addressed to him he should have replied to the Board

accordingly. Non-compliance to summons is violation of the provisions of law and

entails penalty. Even if the appellant had no information to furnish, he should have

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said so and responded to the summons. However, in the peculiar facts and

circumstances of the case, we are of the view that ends of justice would be met by

reducing the penalty to ` 3 lakhs. We order accordingly.

The appeal stands disposed of with no order as to costs.

       Sd/-  

P.K. Malhotra
Member &
Presiding Officer ( Off g.)

                     Sd/-  
                           Jog Singh   
                       Member  

21.02.2013
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