BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Appeal No.128 of 2011
Date of Decision:10.10.2011 Indu Nissan Oxo Chemical Industries Ltd.
Bhajwa Chhani Road,
Behind GSFC Complex,
Vadodara – 391 310
Gujarat.
…..Appellant Versus
Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A,
“G” Block, Bandra Kurla Complex,
Bandra (East), Mumbai – 400 051.
..…Respondent Mr. Ankit Lohia, Advocate with Ms. Shradha Vyas, Advocate for the Appellant.
Dr. Poornima Advani, Advocate with Mr. Ajay Khaire, Advocate for the Respondent.
CORAM : Justice N. K. Sodhi, Presiding Officer
P.K. Malhotra, Member
Per : Justice N. K. Sodhi, Presiding Officer (Oral)
Challenge in this appeal is to the order dated April 7, 2011 passed by the
adjudicating officer imposing a monetary penalty of 10 lacs on the appellant for violating section 15C of the Securities and Exchange Board of India Act, 1992 (for short the Act) and another sum of 3 lacs for violating sectio n 15A(a) of the Act. The
gravamen of the charge levelled against the appellant is that it failed to redress the
grievances of its investors. There were as many as 56 complaints received from investors
which the appellant company had not redressed. Proceedings were also initiated by the
whole time member of the respondent Board fo r issuing appropriate directions to the
appellant under sectio n 11B of the Act for non-redressa l of the grievances of the
investors. During the pendency of the proc eedings before the whole time member the
appellant was directed to issue a public notice calling upon the investors to state whether
their grievances had been redressed or not. This course of action became necessary
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because the appellant contended before the whole time member that the grievances of the
investors had since then been redressed. Admittedly, in response to the public notice
issued by the appellant company, no investor came forward to pursue his complaint. In
this view of the matter, the whole tim e member by his order dated July 8, 2011
exonerated the appellant and disposed of the proceedings without issuing any directions.
When the whole time member passed his orde r, the impugned order of the adjudicating
officer was also there on the record imposi ng the aforesaid monetary penalty on the
appellant. In view of the subsequent orde r passed by the whole time member, we would
have set aside the order of the adjudicating officer and closed the proceedings. However,
we are not adopting that course because the learned counsel appearing for the respondent
Board informs us that subsequent to the order passed by the whole time member three
complainants have come forward informing the respondent that th eir grievances still
remain and that the appellant company has failed to redress them. The primary grievance
of these complainants is that they have not been issued duplicate share certificates despite
a request having been made for the same. Mr. Ankit Lohia learned counsel for the
appellant informs us that these investors had been informed through letters that they were
required to execute certain documents including an indemnity bond as per the
requirement of law before the duplicate share certificates could be issued to them and
since the complainants did not come forward to comply with the requirements of law, the
share transfer agent refused to issue the duplicate share certificates. If this is so, the share
transfer agent was justified in not issuing the duplicate share certificates. Be that as it
may, now that the complainants have come fo rward let their grievanc es be redressed.
There are only three complainants. Let the appellant issue letters to them to come
forward to execute documents as per the requirement of law so that duplicate shares
could be issued to them. In case they res pond within two weeks from the date of receipt
of the letter, duplicate shares would be issued to them within four weeks thereafter. We
make it clear that in case they fail to execu te the necessary documents, their complaints
shall be rejected. Let this exercise be undertaken by the appellant company forthwith.
Before concluding, we may mention that the appellant shall keep the respondent Board
informed of all the actions taken by it in this regard.
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In the result, the appeal is allowed and the impugned order set aside subject to the
aforesaid directions. In case the appellant fails to comply with our directions, the
impugned order shall then stand revived and the appellant w ould be liable to pay the
monetary penalty as imposed by the adjudicating officer. No costs.
Sd/-
Justice N.K.Sodhi
Presiding Officer
Sd/-
P.K. Malhotra
Member
10.10.2011
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