sebi:BS/AO15/2008

SEBI · SEBI · 2008-06-25 · Biju. S, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Violation established; penalty of Rs 5,00,000 imposed on Usha (India) Limited

Provisions invoked

• s. 21
• s. 23E
• s. 23
• s. 15(1)
• s. 13(4)
• s. 41

Parties

• Usha (India) Limited

Holding

Usha (India) Limited violated Section 21 of the SCRA by failing to submit Clause 49 quarterly compliance reports for the quarters ended March 2006, June 2006, September 2006, December 2006 and March 2007, and is liable to a penalty of Rs 5,00,000 under Section 23E of the SCRA.

Full text

2 3. The noticee is a company and its shares are listed on stock exchanges at Bombay Stock Exchange Limited and the National Stock Exchange of India Limited.

3 9. On March 26, 2009, Shri V.B. Sharma, Advocate and Shri S.S. Agarwal, Advocate appeared on behalf of the noticee submitted a copy of the letter of the noticee dated March 20, 2009 in reply to the Show Cause Notice dated September 28, 2007 . The Advocates undertook to file the original of the said letter within two days. With regard to the alleged violations the Advocate submitted that he has no further submissions to make in this matter. Subsequently, the original of the letter dated March 20, 2009 was received. Accordingly, the reply dated March 20, 2009 received on March 31st 2009 is taken on record. Noticee in the said reply inter alia stated that: i) The noticee has filed a reference under Section 15(1) of the Sick Industrial Companies ( Special Provisions ) Act, 1985 (SICA) before the Board for Industrial & Financial Reconstruction which is registered as Case No. 26 of 2008 as per the order dated 25.06.2008 of the Secretary, BIFR. The company has been before BIFR for the first time in the year 2002. ii) The noticee is a Sick since 2001-2002. It has been in severe financial hardship and faced massive violent labour and unrest, which finally culminated in its management being forcibly taken over by the workers. iii) There was much loot and fraud and the workers in connivance with anti social elements sold off the assets of the company and money was fraudulently withdrawn from the various accounts of the company. The noticee submitted news paper cuttings which reported

4 Road, Faridabad, and issued sale share certificate in February 2007 to ome M/s Murthal Tanks and Vessels Pvt. Ltd. v) In pursuance of sale certificate, M/s Murthal Tanks and Vessels Pvt. Ltd. in connivance with the management in control of the noticee company, Indian Bank and the Local police forcibly took illegal possession of even those premises of the noticee along with plant and machinery records, furniture fixtures, materials etc which were never pledged with Indian Bank claming to have obtained sale certificate from the bank for the same. vi) The noticee approached concerned banks and local police for the protection of the other assets and when no help was forth- coming finally approached the Debt Recovery Tribunal-I, Delhi by filing an appeal under the relevant provision of SARFEASI Act, 2002 which was registered as SA1/2007 which is still pending. vii) On 29.03.2007, the Hon’ble DRT-I, Delhi was pleased to restrain the auction purchaser from alienating, transferring or creating any third party charge on the property in question until further orders. viii) The books of accounts and other statutory records of noticee are under the illegal custody of the auction purchaser who has refused to hand over the same to the company despite repeated requests. The noticee has reasonable apprehension that the same are being misused and fabricated. The noticee moved an application for handing over of its statutory records before the DRT which is still pending. ix) In view of the a

Source: SecMarx — sebi:BS/AO15/2008. 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.