BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Date of Decision: 30.04.2019
Appeal No. 88 of 2019
Cella Space Limited
(formerly known as
Sree Sakthi Paper Mills Limited)
57/2993/94, Sree Kailas, Paliam Road,
Ernakulum, Cochin- 682 016
…Appellant
Versus
1. BSE Limited
Floor 25, P. J. Towers, Dalal Street,
Mumbai- 400 001
2. Securities and Exchange Board of India,
SEBI Bhavan, Plot No. C-4A, G-Block,
Bandra-Kurla Complex, Bandra (East),
Mumbai – 400 051
…Respondents
Mr. Ankit Lohia, Advocate with Mr. Ajai Achuthan and
Mr. Mehul Jain, Advocates i/b Bharucha & Partners for the
Appellant.
Mr. Sagar Divekar, Advocate with Mr. Abhimanyu Mhapankar,
Advocate for Respondent No. 1
Mr. Mihir Mody, Advocate with Mr. Sushant Yadav, Advocate
i/b K. Ashar & Co. for Respondent No. 2
CORAM: Justice Tarun Agarwala, Presiding Officer
Dr. C.K.G. Nair, Member
Justice M. T. Joshi, Judicial Member
Per: Justice Tarun Agarwala (Oral)
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1.

A reply has been filed by Respondent No. 1 which is taken
on record.
2.

We have heard the learned counsel for the parties. The
appellant had filed an application for listing of 9,05,000 equity
shares on the exchange platform of the Respondent No. 1 which
was received by the Respondent No. 1 on August 20, 2018.
Regulation 108(2) of Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations,
2009 (“ICDR Regulations” for convenience) provides that the
application for listing should be filed within 20 days from the
date of allotment. Since there was a delay of more than 49 days,
the Respondent No. 1 passed the impugned order dated August
21, 2018 imposing a fine of ` 9,80,000/- (Rupees Nine Lakh
Eighty Thousand Only) and an additional fine of `17,296.217/(Rupees Seventeen Thousand Two Hundred and Ninety Six and
Paise Twenty One Only). The appellant being aggrieved by the
aforesaid imposition of fine has filed the present appeal
contending that they were prevented for reasons which were
beyond their control namely; there was flood situation in Kerala
on account of which they could not comply with the
Regulations.

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3.

Respondent No. 1 in their reply have contended that since
the Regulation 108 of ICDR Regulations was violated by the
appellant the penalty became leviable under Regulation 111A
and 111B of the ICDR Regulations in terms of the Circular
issued by Securities and Exchange Board of India (“SEBI” for
convenience) from time to time.

It was contended that
Respondent No. 1 has no flexibility to relax the violation and
imposition of fine.
4.

Respondent No. 2 SEBI has filed a reply contending that
SEBI has the power to relax the strict enforcement of any
requirement of the ICDR Regulations. For facility Regulation
113 of ICDR Regulations is extracted hereunder:
“[113] [(1)] The Board may, in the interest of
Investors or for the development of the
securities market, relax the strict enforcement
of any requirement of these regulations, if the
Board is satisfied that:
(a)
the requirement is procedural in nature;
or
(b)
any
disclosure
requirement
is
not
relevant for a particular class of industry
or issuer; or
(c)
the non-compliance was caused due to
factors beyond the control of the issuer.”
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A perusal of Clause (c) of Regulation 113 of the ICDR
Regulations indicates that the Board has power to relax the strict
enforcement of the Regulation if the non-compliance was
caused due to factors beyond the control of the issuer.
5.

In the light of the aforesaid Regulation and without going
into the veracity of the statement made by the appellant we
dispose off the appeal at the present stage directing the appellant
to move an appropriate application before SEBI under
Regulation 113 of the ICDR Regulations indicating the reasons
for non-compliance of Regulation 108 of the ICDR Regulations.
If such an application has filed, the Board will decide an
application expeditiously after giving an opportunity of hearing
to the appellant. Till the disposal of the application of the
appellant the impugned order passed by the Respondent No. 1
shall remain in abeyance.
6.

Appeal is accordingly disposed off.
Sd/Justice Tarun Agarwala
Presiding Officer
Sd/Dr. C.K.G. Nair
Member
Sd/Justice M. T. Joshi
Judicial Member
30.04.2019
Prepared & Compared By: PK