sebi:AO/SM-LS/ERO/11/2016

SEBI · SEBI · 1993-10-19 · S Madhusudhanan, Adjudicating Officer

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Facts / Headnote

Penalty imposed of Rs. 1,50,000 under Section 15HB of SEBI Act

Provisions invoked

• s. 15
• s. 15H
• s. 15J

Holding

The Noticee was held liable for failing to obtain SCORES authentication as required by SEBI circulars, constituting a violation attracting penalty under Section 15HB of the SEBI Act, and a penalty of Rs. 1,50,000 was imposed.

Full text

Page 2 of 5 transfer of Shri S V Krishanmohan, the undersigned was appointed as Adjudicating Officer vide Order dated June 22, 2015. SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

Page 3 of 5 hence the argument of the Noticee that the said letter was not received cannot be accepted. 9. The Noticee’s argument that it was not aware of the SEBI circulars does not hold any merit as "Ignorantiajuris non excusat", or "ignorance of the law excuses no one" is a well-established legal maxim. In this regard it is pertinent to note that the Hon’ble Supreme Court in the matter of Board Of Directors, H.P.T.C.& Anr vs K.C. Rahi vide its order dated February 20, 2008 has held that:-

Page 4 of 5 “Under Section 15HB, penalty imposable for non compliance of SEBI direction is not less than one lakh rupees but may extend to one crore rupees. In the present case, after considering all mitigating factors the adjudicating officer of SEBI has imposed penalty of Rs. 1,50,000/- as against penalty of Rs. 1 crore imposable under Section 15HB of SEBI Act which cannot be said to be excessive or unreasonable. Argument of the appellant that there was no operating income, no permanent employee, no pending investor grievance, no prejudice caused to any investor and that the shares of the appellant company were not traded for more than six years, cannot be a ground to disobey the directions given by SEBI. Obligation to obtain SCORES authentication was not dependent on there being operating income or pending investor grievance or trading of shares on the stock exchanges. Admittedly, the appellant company continues to be a listed company and, therefore, it was obligatory on part of appellant company to obtain SCORES authentication within the time stipulated by SEBI. However, the appellant has consistently failed and neglected to comply with the directions of SEBI and it is only when SEBI initiated penalty proceedings, the appellant chose to comply with the

Source: SecMarx — sebi:AO/SM-LS/ERO/11/2016. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.