Professional Documents
Culture Documents
Page 1 of 10
2. In order to further remind the Noticee about the compliance with the
requirements as laid down in the SEBI Circulars, letters dated April 29, 2014 and
dated July 23, 2014 were sent to the Noticee informing about the commencement
of processing of investor complaints in a centralized web based complaints redress
system SCORES in terms of the Circulars and advising the Noticee to redress
the investor grievances pending against the Noticee and file the ATR in SCORES
within 7 days of receipt of the said letters, failing which appropriate legal action
including initiation of adjudication proceedings, debarment from accessing capital
markets, prosecution proceedings against the Noticee and its directors may be
initiated by SEBI.
3. As observed from the contents of the Circular, SCORES introduced electronic
dealing of the complaints of the investors, by the respective companies. Thus,
once a complaint against a company was uploaded in the SCORES marked against
the company, it amounted to calling upon by SEBI to such company to redress the
investor grievance. Accordingly, it was incumbent upon such company to redress
the investor complaint. It was observed that four investor complaints were
pending against the Noticee and it was alleged that the Noticee failed to redress
pending investor grievances in spite of being called upon by SEBI to do so thereby
violating the provisions of Section 15 A(a) and Section 15C of the SEBI Act, 1992.
APPOINTMENT OF ADJUDICATING OFFICER
4. The undersigned was appointed as Adjudicating Officer vide order dated
27.02.2015 under section 19 of SEBI Act read with section 15-I of SEBI Act read
with rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by
Adjudicating Officer) Rules, 1995 (hereinafter referred to as Rules) to inquire
into and adjudge under Section 15A(a) and 15 C of the SEBI Act, the alleged
Adjudication Order in respect of M/s. Suryaamba Spinning Mills Limited
Page 2 of 10
Page 3 of 10
8. Accordingly as per the request of the Noticee another opportunity of hearing was
provided to the Noticee on 23.07.2015 vide hearing notice dated 14.07.2015. The
Noticee vide e-mail dated July 22, 2015 sought extension of the date of hearing.
Does the violation, if any, attract monetary penalty under Section 15A(a)
If so, what would be the monetary penalty that can be imposed taking
Page 4 of 10
FINDINGS
11. Before moving forward, it is pertinent to refer to the provisions of Circulars,
which reads as under:
Page 5 of 10
Page 6 of 10
view the complaints pending against them and submit ATRs along with supporting
documents electronically in SCORES. Failure on the part of the listed company to
update the ATR in SCORES will be treated as non-redressal of investor
complaints by the listed company. Submission of physical ATR would not be
accepted for complaints lodged in SCORES. For complaints forwarded to
companies on or before 20/05/2011, physical ATRs should be submitted.
Further the listed company, against whom complaints are pending on SCORES,
shall take appropriate necessary steps within 7 days of receipt of complaint by the
concerned listed company through SCORES, so as to resolve the complaint within
30 days of receipt of complaint and also keep the complainant duly informed of
the action taken thereon. Thus the listed company shall resolve the investors'
complaints within thirty days from the receipt of the complaint in the SCORES
and submit ATRs along with supporting documents electronically in SCORES.
13. It has been alleged in the SCN that, in all there were total four investor complaints
made by the investors through SORES, The same were resolved after 30 days.
14. After considering all the contentions put forth by the Noticee, for the reasons
stated above, it is established without doubt that the Noticee has violated the
provisions of the Circulars by failing to redress the investor complaints within the
prescribed time.
15. Further, I note that the Honble Supreme Court of India in the matter of SEBI Vs.
Shri Ram Mutual Fund [2006] 68 SCL 216(SC) has also held that In our considered
opinion, penalty is attracted as soon as the contravention of the statutory obligation as
contemplated by the Act and the Regulations is established and hence the intention of the parties
committing such violation becomes wholly irrelevant.
16. In view of the foregoing, I am convinced that it is a fit case to impose monetary
penalty under Section 15A(a) and Section 15C of the SEBI Act, which reads as
under:
Adjudication Order in respect of M/s. Suryaamba Spinning Mills Limited
Page 7 of 10
Substituted for the words of one lakh rupees for each day during which such failure continues or one crore rupees,
whichever is less by the Securities Laws (Amendment) Act, 2014, w.e.f. 08-09-2014.
2
Substituted for the words of one lakh rupees for each day during which such failure continues or one crore rupees,
whichever is less by the Securities Laws (Amendment) Act, 2014, w.e.f. 08-09-2014.
Page 8 of 10
18. As per Section 15A(a) and 15(c) of the SEBI Act, the Noticee is liable to penalty,
not be less than one lakh rupees but which may extend to one lakh rupees for each
day during which such failure continues subject to a maximum of one crore
rupees. Further, under Section 15-I of the SEBI Act, the adjudicating officer has to
give due regard to certain factors which have been stated as above while adjudging
the quantum of penalty. It is noted that no quantifiable figures are available to
assess the disproportionate gain or unfair advantage made as a result of such
failure to redress the investor complaints in term of the circulars by the Noticee.
Further from the material available on record, it is not possible to ascertain the
exact monetary loss to the investors on account of such failure to redress the
investor complaints in term of the circulars by the Noticee.
19. In addition to the aforesaid, I am also inclined to consider the following mitigating
factor while adjudging the quantum of penalty:
I have noted that the replies have been sent to the complainants by the Noticee,
albeit with delay and the complaints have been resolved.
ORDER
20. After taking into consideration all the facts and circumstances of the case, I
impose a penalty of Rs 25,000/- (Rupees Twenty Five Thousand only) under
Section 15 A(a) and a penalty of Rs 25,000/- (Rupees Twenty Five Thousand
only) under Section 15C of the SEBI Act(Total :- Rupees Fifty Thousand
only) on the Noticee M/s Suryaamba Spinning Mills Limited, which in my
opinion, will be commensurate with the violations committed by the Noticee.
Page 9 of 10
21. The Noticee shall pay the said amount of penalty by way of demand draft in
favour of SEBI - Penalties Remittable to Government of India, payable at
Mumbai, within 45 days of receipt of this order. The said demand draft should be
forwarded to Regional Director, Securities and Exchange Board of India, Southern
Regional Office, Overseas Towers, 7th Floor, 756-L, Anna Salai, Chennai-600002.
22. In terms of rule 6 of the Rules, copies of this order are sent to the Noticee and
also to the Securities and Exchange Board of India.
Date: 30.09.2015
Place: Mumbai
Prasad P. Jagadale
Adjudicating Officer
Page 10 of 10