BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

(ADJUDICATION ORDER NO: SEBI / SBMAO/ 18021 / 2015)
____________________________________________________________________
UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT,
1992 READ WITH RULE 5 OF SECURITIES AND EXCHANGE BOARD OF INDIA
(PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY
ADJUDICATING OFFICER) RULES, 1995
In respect of:
M/s Revathi Equipment Limited
Malumichampatti Post,Pollachi Road
Coimbatore - Pin 641 050
( PAN AABCR0624D)
______________________________________________________________________
Background:

1. Securities and Exchange Board of India (SEBI ) received two complaints from Ms.
Mugdha Agrawal, Lucknow regarding non receipt of demand draft in respect of
dividend declared by M/s. Revathi Equipment Limited (hereinafter referred to as
Noticee/ Company) for the year 2007-2008. As per the data available in the SEBI
Complaints Redress System (SCORES), the said complaint was shown as pending
against the Noticee. SEBI had vide letters dated April 20, 2012 and June 12, 2012
forwarded the complaint to the Noticee with instructions to redress the pending
grievances received against it within the time specified. However, the Noticee failed
to redress the grievance and submit an action taken report in this regard, which was
required in terms of the procedure laid down in the SCORES system. The investor
grievance was therefore pending to be resolved against the Noticee in the SCORES.

Appointment of Adjudicating Officer:

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2. The undersigned was appointed as the Adjudicating Officer vide an Order dated
August 28, 2012 under the provisions of Section 15-I of the Securities and Exchange
Board of India Act, 1992 ( hereinafter known as SEBI Act ) read with Rule 3 of the
SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer)
Rules, 1995 ( hereinafter referred to as Adjudication Rules ) to inquire into and
adjudge under the provisions of Section 15 C of the SEBI Act, the alleged non
redressal of the above mentioned investor grievance by the Noticee.

Show Cause Notice, Reply of the Noticee and Personal Hearing:

3. A Show Cause Notice ref No AO/SCN/SBM/EIL/ 23859/2012 dated October 29,

2012 (hereinafter referred to as SCN) was issued to the Noticee under the
provisions of Rule 4 of the Adjudication Rules, to show cause as to why an inquiry
should not be held against the Noticee and penalty should not be imposed under
Section 15 C of the SEBI Act, for not taking appropriate steps to redress the investor
grievance pending against the Noticee. It was alleged in the SCN that the Noticee
had failed to redress the pending investor grievance against it in the SCORES within
the time specified and thereby violated the provisions of Section 15 C of the SEBI
Act, 1992. The copies of the documents relied upon in the SCN were also provided
to the Noticee along with the SCN.

4. The SCN was sent to the Noticees address as mentioned above by Speed Post with
Acknowledgement due, which was also duly delivered on 1st November 2012 and
the proof of the service of the SCN is available on record. The Noticee vide e-mail
dated November 6, 2012 submitted their reply to the SCN and confirmed that they
have received the SCN on November 1, 2012 and also mentioned that they have
submitted the physical copy of their reply along with supporting enclosures by post
separately. The Noticee attached a pdf file of their reply to the SCN along with their
e-mail dated November 6, 2012. The reply submitted by the Noticee to the SCN
(vide letter dated November 6, 2012) was received by SEBI on November 12, 2012.
The following are the excerpts from the reply furnished by the Noticee :
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The Noticee mentioned that the pending grievance for which they received the
SCN pertains to two complaints received from Ms. Mugdha Agrawal residing at
Vishnu Sadan, 360, Rajendra

Nagar , Sixth Street, Lucknow 226 004 and

these complaints were relating to non receipt of demand draft in the matter of
dividend declared by the Noticee for the year 2007-08. The Noticee mentioned
in their reply that based on a complaint received from Ms. Mugdha Agrawal on
August 10, 2011, they had

taken necessary steps to resolve the issue by

dispatching a duplicate dividend warrant in the name of the complainant (vide

DD bearing No 024355 dated 24.4.2012 for Rs 100/-). The Noticee in their reply
to the SCN also enclosed a copy of the Demand Draft No 024355 dated
24.4.2012 that was issued and dispatched to Ms. Mugdha Agrawal's address. It
was further mentioned by the Noticee that the DD was also received by Ms.
Mugdha Agrawal and in this regard the Noticee enclosed an e-mail confirmation
dated 4th May 2012 received from her.

It was mentioned by the Noticee that they had received a letter from SEBI
(bearing ref no OW/14/2012 dated 20th April, 2012) asking them to redress the
grievance of Ms. Mugdha Agrawal within 15 days and submit an Action Taken
Report (ATR) in the SCORES in this regard.

The Noticee had replied to SEBI vide their letter dated 27th April 2012 informing
that the two pending grievances relating to the issue of duplicate dividend
warrant for Rs. 100/- to Ms. Mugdha Agrawal for the year 2007-08 has been
resolved as they have issued the Demand Draft for Rs 100/- in respect of the
dividend amount

to the complainant on 24th April, 2012 itself. The above said

letter addressed by the Noticee to SEBI was received by SEBI on 28th April 2012
and a copy of the acknowledgment of SEBI in this regard was also submitted by
the Noticee along with their reply to the SCN.

It was also mentioned by the Noticee in their reply that they were not in a position
to update and submit the ATR in SCORES in respect of the steps taken by them
to redress the grievance as they were not able to login due to the unavailability of
the login password. The Noticee mentioned in their reply that after they had
received an e-mail from SEBI furnishing the login password for updating the ATR
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in SCORES, they had taken necessary steps on November 1, 2012 to update the
ATR in the SCORES.

The Noticee also enclosed a copy of the printout in support of having updated
and closed the complaint of Ms. Mugdha Agrawal in the SCORES portal.

The Noticee also requested that the proceedings initiated against them may be
dropped in view of the fact that the investor grievance has been resolved
satisfactorily and the same has also been updated and closed in the SCORES
portal.

5. In the interest of natural justice and in order to conduct an inquiry in terms of Rule 4
(3) of the Adjudication Rules, the Noticee was granted an opportunity of a personal
hearing on May 6, 2013 (vide letter ref AO/SCN/SBM/EIL/8850/2013/5 dated April
12, 2013). However, the Noticee vide their letter dated April 17, 2013 requested for
postponement of the hearing due to the fact that their Authorised Representative
was travelling and was unavailable. The Noticee was given another opportunity of a
personal hearing on October 7, 2013. Mr M D Selvaraj, Authorised Representative
on behalf of the Noticee appeared on October 7, 2013 for the personal hearing.
During the course of the personal hearing, the Authorised Representative submitted
the following facts before me:

The two complaints shown as pending against the Noticee company may be
treated as a single complaint as the same has been lodged by a single
investor (Ms. Mugdha Agrawal) and with identical subject matter.

It was mentioned by the Authorised Representative that a Demand Draft

bearing No 384286 dated 10th October 2008

for Rs 100/- towards the

dividend payment for the year 2007-08 was originally issued and sent to Ms.
Mugdha Agrawals address as per the records maintained by the R & T agent
of the Noticee company. The said DD was sent to Ms Agrawals address by
ordinary post as the value of the dividend payment was less than Rs 10,000/-.

The complaint of Ms. Mugdha Agrawal regarding non receipt of the dividend
amount was received in SCORES on 13/5/2011 and 10/8/2011. It was
mentioned by the Authorised Representative that the Noticee had faced
technical difficulties relating to SCORES in so far as logging in the SCORES
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ID and other matters were concerned and therefore, they could not take steps
to resolve the grievance through SCORES by submitting the ATR.

The Authorised Representative further mentioned that based on the complaint

received from Ms. Mugdha Agrawal regarding non receipt of dividend warrant,
a demand draft ( bearing DD No 024355 dtd 24.4.2012) for Rs 100/- was
sent to her address on 24th April 2012 and the same was also received by
Ms. Mugdha Agrawal on 4th May 2012, evident from an e-mail confirmation
dated 4th May 2012 addressed by her to the Noticee company.

The Authorised Representative stated that since the Noticee had experienced
technical difficulties to log in the SCORES portal, they have after contacting
the SEBI officials uploaded the ATR in the SCORES on November 1, 2012.
The Authorised Representative further stated that since they have already
resolved the grievance on 24th April 2012 when they issued a demand draft
for Rs 100/- to Ms Mugdha Agrawal and only due to the technical reasons
they could not update the ATR in the SCORES on time, a lenient view may be
taken in the matter

Consideration of the Issues and Findings:

6. I have taken into consideration the facts and circumstances of the case, the material
available on record and also the submissions made by the Authorised
Representative of the Noticee during the course of personal hearing before me. It
was alleged in the SCN that the Noticee has failed to redress the pending investor
grievances (two investor grievances) against it in the SCORES within the time
specified. I observe from the information downloaded from the SCORES portal that
the two pending grievances were apparently made by the same complainant viz. Ms.
Mugdha Agrawal from Lucknow and the subject matter of the complaint was also
identical. However, in the SCORES portal they were inadvertently entered and
shown as two separate pending complaints against the Noticee Company. Hence, I
note that it is a case where only a single complaint is pending against the Noticee in

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the SCORES database and not two complaints, as alleged in the SCN that was
issued to them.

7. I also observe from the information submitted by the Noticee that they have taken
necessary steps to dispatch the DD for Rs 100/- to the address of Ms. Mugdha
Agrawal

in the year 2008 itself when a DD bearing No 384286 dated 10th October

2008 was issued in her name against the dividend declared by the Noticee for the
year 2007-08. As already brought out by the Noticee in their submissions, the said
DD was sent to Ms. Mugdha Agrawals address available with their R & T agent by
ordinary post as the value of the dividend payment was below Rs 10,000/.
Subsequently, in view of complaints received from Ms. Mugdha Agrawal that she
had not received the Dividend amount for the year 2007-08, the Noticee took
necessary steps to issue another demand draft for Rs 100/- on 24.4.2012 (vide DD
No 024355 dated 24.4.2012) and the same was received by Ms. Mugdha Agrawal,
which is evident from her e-mail confirmation dated 4th May 2012 addressed to the
Noticee.
8. I further observe that the Noticee in their separate communication dated 27th April
2012 addressed to SEBI, which was also acknowledged by SEBI - SRO on 30th April
2012, had appropriately informed SEBI about the fact that they have already
dispatched the dividend warrant to Ms Mugdha Agarwal on 24.4.2012. Thus, I note
that SEBI SRO (OIAE) was informed as on April 30, 2012 about the steps taken by
the Noticee to redress the grievance of Ms. Mugdha Agrawal. Furthermore, I
observe that the grievance of Ms Mugdha Agarwal was redressed by the Noticee on
a date much before the initiation of Adjudication proceedings against them. I have
also taken note of the documentary proof submitted by the Noticee in support of
having issued the duplicate DD to Ms. Mugdha Agrawal on 24th April 2012.

9. It is evident from the submissions made by the Noticee that they have taken
necessary steps to bring to the attention of SEBI (OIAE) about the technical issues
that they were facing regarding their inability to login the SCORES portal.. I note
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from the submissions made by the Noticee that they were not in a position to access
the SCORES portal as they were yet to receive the password in this regard. In view
of the same, the Noticee mentioned that they were not in a position to update the
redressed status of the grievance of Ms Mugdha Agrawal in the SCORES portal and
also submit the Action Taken Report in this regard.

10. I further observe that the complaint of Ms Mugdha Agrawal was finally closed in the
SCORES portal after the Noticee received the login password from SEBI for
updating the ATR in the SCORES. Subsequently, the Noticee has on 1.11.2012
updated the ATR in SCORES and a printout of the same was also submitted by
them to SEBI in this regard as proof.

11. Thus, in light of the above observations, the allegation of non- redressal of investor
grievance leveled against the Noticee is not tenable. I am therefore of the opinion
that it would be inappropriate to impose any penalty on the Noticee.

Order

12. In view of the foregoing, considering the facts and circumstances of the case and
material available on record, the alleged violation of the provisions of Section 15 C of
the SEBI Act by the Noticee do not stand established and the matter is accordingly
disposed of.

13. In terms of Rule 6 of the Adjudication Rules, copies of this order are sent to the
Noticee and also to the Securities and Exchange Board of India.

Date: June 30, 2015

Place: Chennai

Suresh B Menon
Adjudicating Officer

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