BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

[ADJUDICATION ORDER NO. AO/VKV-DL/196/2016]
UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992
READ WITH RULE 5 OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING
PENALTIES BY ADJUDICATING OFFICER) RULES, 1995
In respect of:
M/s. Healthcaps India Ltd
(PAN: Not Available)
H-2,3RD FLOOR, C-BLOCK,
COMMUNITY CENTRE NARAINA VIHAR
NEW DELHI - 110 028
In the matter of Non-redressal of investor grievance(s)
BACKGROUND
1. Securities and Exchange Board of India (hereinafter referred to as "SEBI") came out with
a Circular dated June 03, 2011 dealing with the processing of investor complaints against
listed companies through SEBI Complaints Redress System (hereinafter referred to as
"SCORES"). In terms of said Circular, all listed companies were inter alia required to view
the complaints pending against them, redress them and submit Action Taken Reports
(hereinafter referred to as "ATRs") electronically in SCORES. As the SCORES is online
electronic system, therefore, for the purposes of accessing the complaints of the investors
against them, as uploaded in the SCORES, listed companies were required to login to
SCORES system electronically through a company specific user id and password, to be
provided by SEBI. For the purpose of generating said user id and password, listed
companies which were yet to obtain SCORES user id and password, were required to
submit the details for authentication to SEBI, in the format annexed to the said Circular.
It was observed that M/s Healthcaps India Ltd. (hereinafter referred to as ("Noticee/
the Company") did not submit the details to SEBI which were required to be furnished
in terms of the said Circular.
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2.

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 by SEBI in the SCORES, 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 six (06)
investor complaint was pending against the Noticee as on July 22, 2012.

3.

It was alleged that by not submitting the details for authentication as required by the
Circular and further required by the two letters, Noticee did not obtain the user id and
password which was essential for accessing the complaints pertaining to it, as uploaded
on the SCORES for redressing the investors grievances and subsequent redressal
thereof, within specified time. Thus, it was alleged that Noticee had failed to redress the
investor grievances which renders the Noticee liable for imposition of penalty under
Section 15C of the Securities and Exchange Board of India Act, 1992 (hereinafter
referred to as 'SEBI Act, 1992').
APPOINTMENT OF ADJUDICATING OFFICER

4.

Shri Ram Mohan Rao was appointed as the Adjudicating Officer vide order dated August
22, 2012 under section 15-I of SEBI Act and Rule 3 of SEBI (Procedure for Holding
Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter
referred to as Adjudication Rules) to inquire and adjudge under Section 15C of the
SEBI Act, 1992, the alleged violations committed by the Noticee. Subsequent to the
transfer of Shri Ram Mohan Rao, the undersigned was appointed as Adjudicating Officer
vide order dated June 25, 2013.
SHOW CAUSE NOTICE, REPLY AND HEARING

5.

A Show Cause Notice (hereinafter referred to as SCN) was issued to the Noticee under
rule 4 of SEBI (Procedure for Holding Inquiry and imposing penalties by Adjudicating
Officer) Rules, 1995 (hereinafter referred to as Adjudicating Rules) to show cause as

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to why an inquiry be not held against it in terms of rule 4 of the Rules read with section
15I of SEBI Act, 1992 and penalty be not imposed under section 15C of SEBI Act, 1992
for the violations alleged to have been committed by the Noticee.
6.

The said SCN bearing No. SEBI-NRO/AO/VKV/DL/246/2016 dated February 02, 2016
was sent at the last known office address(s) at H-2, 3RD FLOOR, C-BLOCK, COMMUNITY
CENTRE NARAINA VIHAR NEW DELHI- 110028 of the Noticee through Postal
Department. However Noticee did not submit any reply for the same.

7.

A Notice under Rule 4 (1) of the Adjudication Rules was published on February 28, 2016
in the national daily and regional newspaper(s) at the registered office place of the
Noticee, whereby the Noticee was advised to collect the copy of the SCN issued within
07 days of publication of the aforesaid notice and to submit its reply if any, within 14
days thereafter. However, the Noticee neither collected the copy of the SCN issued nor
submitted its reply in response to the published notice.

8.

Considering the facts and circumstances of the case including the fact that the Noticee
has not availed the opportunity of hearing before the previous Adjudicating Officer, the
undersigned is of the opinion that no prejudice would be caused to the Noticee in the
given matter if another opportunity of hearing under Rule 4 (3) of Adjudication Rules is
not provided to it.

CONSIDERATION OF ISSUES
9.

After perusal of the material available on record, I have the following issues for
consideration, viz.,
a) Whether the Notice has failed to resolve investor grievances?
b) Does the violation, if any, on part of the Noticee attract monetary penalty under
Section 15 C of SEBI Act?

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c) If so, what would be the quantum of monetary penalty that can be imposed taking
into consideration the factors mentioned in section 15J of the SEBI Act as well as
internal guidelines of SEBI issued from time to time in this regard?
FINDINGS
10. On perusal of the material available on record and giving regard to the facts and
circumstances of the case, I record my findings hereunder.
ISSUE 1: Whether the Noticee has failed to resolve investor grievances?
11. As already observed, SEBI introduced an online electronic system for resolution of
investor grievances, i.e., SCORES in 2011. For the purposes of accessing the complaints
of the investors against them, as uploaded in the SCORES, listed companies were
required to login to SCORES system electronically through a company specific user id
and password, to be provided by SEBI. In this regard, I note that, SEBI-NRO has
confirmed (screenshot of SCORES is present on record) that Noticee had obtained
details for authentication for SCORES user id & password and had resolved six (06)
pending investor complaint(s) alleged in the SCN within a stipulated time.
12. Since, the Noticee had obtained SCORES authentication and had taken necessary steps
of resolving the pending investor grievance(s); I hold that the allegation of not
resolving investor grievances, as alleged in the SCN, does not stand established.
ISSUE 2: Whether the Noticee is liable for monetary penalty under Section 15C of the
SEBI Act, 1992?
13. The provisions of Section 15C of the SEBI Act, 1992, read as under:
15C Penalty for failure to redress investors' grievances: If any listed company or
any person who is registered as an intermediary, after having been called upon by the
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Board in writing, to redress the grievances of investors, fails to redress such grievances
within the time specified by the Board, such company or intermediary shall be liable to a
penalty of one lakh rupees for each day during which such failure continues or one crore
rupees, whichever is less.

14. Since the allegation against the Noticee of not resolving the investor grievance pending
against it has not been established; therefore, the Noticee is not liable for monetary
penalty under Section 15C of the SEBI Act, 1992.
ISSUE 3: What quantum of monetary penalty should be imposed on the Noticee taking
into consideration the factors mentioned in Section 15J of the SEBI Act, 1992?
15. Since, the Noticee is not liable for monetary penalty in the instant matter, this issue
deserves no consideration.
ORDER
16. In view of my findings noted in the preceding paragraphs, I hereby dispose of the
Adjudicating Proceedings initiated against the Noticee vide Show Cause Notice dated
February 02, 2016.
17. In terms of the provisions of Rule 6 of the SEBI (Procedure for Holding Inquiry and
Imposing Penalties by Adjudicating Officer) Rules 1995, a copy each of this order is
being sent to the Noticee and also to Securities and Exchange Board of India.

Date: 06.04.2016

Vijayant Kumar Verma

Place: New Delhi

Adjudicating Officer

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