BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI

Appeal No. 202 of 2011  

Date of Decision: 5.1.2012 

Mahesh H. Bissa
D1, Dhiraj Apartment,
Poddar Road, Malad (E),
Mumbai – 400 097.

            …… Appellant 

Versus

Securities and Exchange Board of India
SEBI Bhavan, C-4A, G Block,
Bandra Kurla Complex, Mumbai – 400 051.

            …… Respondent 

Mr. Prakash Shah, Advocate for the Appellant.
Mr. Kumar Desai, Advocate with Mr. Mobin Shaikh and Mr. Rushin Kapadia, Advocates
for the Respondent.
CORAM : P. K. Malhotra, Member
S.S.N. Moorthy, Member
Per : S.S.N. Moorthy, Member
The present appeal has been filed agains t the adjudication order of the Securities
and Exchange Board of India (for s hort the Board) by which a penalty of 5 lacs was imposed on the appellant. The appellant is an individual engaged in the business of trading in shares. The Board conducted investigations in the buying, selling and dealing in the shares of M/s. Adani Exports Ltd. (AEL) for the periods July 09, 2004 to January 14, 2005 and August 01, 2005 to September 5, 2005. During both the periods the price of the scrip registered wide fluctuations. During invest igation it was noticed that the appellant had traded substantially in the scrip of AEL th rough M/s. Shrihari Hira Stock Broking P. Ltd. and entered into synchronized trades with other entities on the Bomb ay Stock Exchange. The synchronized trades entered into by the appellant created artificial volumes in the scrip of AEL and the appellant was directed to show cause why penalty should not be levied for unlawful trading as found during investigation. The appellant did not file any reply to the show cause notice. However a statement wa s recorded from him during personal hearing of the case and the appellant adm itted to the trading as allege d in the show cause notice. His only plea was that he had no ulterior motive of manipulati ng the trades. The adjudicating officer, after considering the statement recorded from the appellant and nature of transactions, levied a penalty of 5 lacs under section 15HA of the Securities and
Exchange Board of India Act, 1992.

2  
 

2. We have heard the learned counsel for the parties. During the hearing of the appeal
   the appellant’s learned counsel would admit th at the appellant had entered into certain
   manipulative trades as alleged in the show cause notice. His main argument was for
   reduction of the quantum of penalty in as much as several other entities including counter
   parties with whom the appellant had transa ctions were foisted with a penalty of 1 lac only and there is no justification for a penalty of 5 lacs in the appellant’s case.
3. We have considered the arguments adva nced by the learned counsel on both the
   sides. There is no denying the fact that the appellant had entered into manipulative trades
   in his dealings in the scrip of AEL. This is evidenced from the appellant’s own admission
   before the adjudicating officer. However we find considerable force in the argument of the
   appellant’s counsel that in the case of entities similarly placed the quantum of penalty has
   been only a sum of 1 lac. It is to be noticed that the appellant has stopped trading in the market for the past two and half years. This fact also remains undisputed. The appellant’s learned counsel has submitted copies of the ad judication orders passed in respect of Shri Sunil Kuril, Shri Sunil Purohit, Shri Ankit Vairana, Ms. Rina Shah, Shri Santosh Gade, Shri Haresh Posnak and Shri Mahesh Kumar A. Panchal who had traded in the same scrip and during the same period. It is noticed that the penalty imposed has been only 1 lac in
   each case. All the above persons are said to be counter parties in th e transactions carried
   on by the appellant. There could be some variat ions in the trade practices as followed by
   the appellant as an individual and that followed by the counter parties. However, the facts
   of the case as evidenced in the adjudication or ders in respect of th e counter parties filed
   before us do have a bearing on the appellant’s case as well. Taking into consideration the
   above mentioned facts we are of the view that ends of justice would be met in the present
   case by reducing the penalty to ` 2.5 lacs. We order accordingly. The appeal is disposed
   of as above with no order as to costs.
   Sd/-
       P.K. Malhotra
   Member Sd/- S.S.N. Moorthy
   Member
   5.1.2012
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