BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Date of Decision : 24.12.2019
Misc. Application No. 567 of 2019
And
Appeal No. 531 of 2019
Advance Lifestyles Ltd.
2nd Floor, West Wing,
Electric Mansion
Appasaheb Marathe Road,
Worli, Mumbai – 400025.

….. Appellant
Versus
BSE Ltd.
25th Floor, P J Towers,
Dalal Street, Fort,
Mumbai – 400 001.

…… Respondent
Mr. Rakesh Puri, Advocate i/b Lexvox Chambers for the Appellant.
Mr. Sagar Divekar, Advocate with Mr. Abhimanyu Mhapankar,
Advocate for the Respondent.

CORAM : Justice Tarun Agarwala, Presiding Officer
Dr. C.K.G. Nair, Member
Per : Justice Tarun Agarwala, Presiding Officer (Oral)
Misc. Application No. 567 of 2019 :
1.

For the reasons stated in the application, the delay in filing the
appeal is condoned.

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Appeal No. 531 of 2019 :
1.

The present appeal has been filed against the order of
Bombay Stock Exchange Ltd. (hereinafter referred to as, ‘BSE’)
dated August 19, 2019 and October 7, 2019 whereby a total penalty
of Rs. 20,40,000/- has been imposed for non compliance of various
provisions of Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015
(hereinafter referred to as, ‘Listing Regulations’).

2.

The facts leading to the filing of the present appeal is, that the
appellant is a public listed company and have more than 6800
shareholders.

Under the Listing Regulations, the appellant was
required to comply with various provisions and upon failure penalties
could be imposed for non-compliance. In this regard, SEBI issued a
circular dated May 3, 2018 known as “Standard Operating
Procedure” which streamlined the process and adopted an uniform
approach in the matter of levy of fines for non-compliance of certain
provisions of the Listing Regulations.

The said circular also
provided a discretion to the stock exchange to deviate from the
circular dated May 3, 2018 under exceptional circumstances only
after recording reasons in writing. Thus, flexibility and discretion
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was provided to the stock exchange for levying penalties for noncompliance of the Listing Regulations.

3.

The exceptional circumstances indicated a list of events which
could be considered by the stock exchange for waiving or reducing
the quantum of penalty.

The exceptional events were natural
calamity, seizure of books / computers by regulatory / statutory
authorities, the compliances not approved by the Board, directions
issued by the Court / regulator which prevented from making the
requisite disclosure and accidental damage.

4.

The appellants made the following violations of the Listing
Regulations :-
Regulation
Details
Fine
31
33
27(2)
27(2)
34
13(3)
44
Shareholding Pattern
Financial results
Corporate Governance Report
Corporate Governance Report
Annual Report
Adequate steps for investor complaints
Voting rights
Composition of BOD including
appointment of woman Director
Composition of BOD including
appointment of woman Director
Constitution of Audit Committee
Constitution of Audit Committee
Constitution of nomination and
remuneration Committee
Constitution of Stakeholder relationship
Committee
Constitution of Stakeholder relationship
1000
35000
1000
22000
10000
29000
10000
17(1)
17(1)
18(1)
18(1)
19(1)/19(2)
20(2)
20(2)
460000
460000
184000
184000
184000
184000
184000
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6(1)
5.

Committee
Appointment of qualified CS as
Compliance Officer
Total Basic Fine
92000
20,40,000
The first seven violations as indicated aforesaid were
complied by the appellant but the remaining violations have not been
complied till date and the violation is continuing till date. In this
regard, the appellant made a representation to the authorities
requesting for waiver / reduction of the penalty contending that for
not appointing the Company Secretary and two independent directors
on the Board / audit committee, the penalty may be waived under the
exceptional circumstances as carved out in the circular dated May 3,
2018. The representation was rejected and the appellant was directed
to deposit a penalty of Rs. 20,40,000/-.

6.

Having heard the learned counsel for the parties, we find that
admittedly, the appellant has violated various provisions of the
Listing Regulations. The limited prayer made before us was that due
to unforeseen events, the stock exchange should have taken the
events as a mitigating factor to waive or reduce the quantum of
penalty. In this regard, we find that the exceptions carved out in the
circular dated May 3, 2018 relates to certain events which in the
instant case was not existing.

Further, we find that there no
justification or any reason has been given as to why a Company
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Secretary and the two independent directors could not be appointed.
In the absence of any cogent reasons, we do not find any justification
to reduce the quantum of penalty.

7.

For the reasons stated aforesaid, we do not find any merit in
the appeal. Dismissed.

Sd/Justice Tarun Agarwala
Presiding Officer
Sd/Dr. C. K. G. Nair
Member
24.12.2019
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