Failure to mention Director Identification Number (DIN) - adjudication of penalties under section 172 of the Companies Act, 2013 - Companies (Adjudication of Penalties) Rules, 2014 - beneficial construction of amendment to procedural scheme - dropping adjudication against deceased directorFailure to mention Director Identification Number (DIN) - Existence of contravention of Section 158 of the Companies Act, 2013 for the financial year ended 2014-15. - HELD THAT: - The Inquiry Officer observed that the Directors' Identification Numbers were not mentioned in the financial statements and Directors' Report for the financial year 2014-15. No relevant explanation or reply was furnished by the company or its directors to rebut that finding. On that basis the adjudicating authority concluded that the company and the directors were in default of the obligation to mention DIN as required by Section 158 of the Companies Act, 2013.Contravention of Section 158 established for the financial year ended 2014-15.Adjudication of penalties under section 172 of the Companies Act, 2013 - Companies (Adjudication of Penalties) Rules, 2014 - beneficial construction of amendment to procedural scheme - Imposition of penalty under Section 172 on the company and a director for the Section 158 contravention and entitlement to adjudicate penalties under the amended scheme. - HELD THAT: - The adjudicating authority considered the statutory scheme enabling adjudication of penalties, including the effect of amendments and supporting judicial treatment referenced in the Madras Court decision. Taking into account that adjudication under the Companies (Adjudication of Penalties) Rules is the prescribed in house remedy and having found default under Section 158, the authority exercised power to impose penalties under Section 172. The authority also noted the absence of a substantive reply and applied the amended adjudicatory framework to the facts before it in determining sanction and quantum.Penalty of Rs.50,000 imposed on the company and Rs.50,000 imposed on the director in default Mr. Ishan Agarwal for the contravention in respect of the financial year ended 2014-15; total penalty ordered Rs.1,00,000.Dropping adjudication against deceased director - Disposition of proceedings against a director who died during the interregnum. - HELD THAT: - The record contained information that one director in default, Mr. Vishwanath Agarwal, had died on 22-10-2020. On that factual basis the adjudicating authority treated the proceedings against the deceased director as not maintainable and accordingly dropped adjudication against him pursuant to the relevant rule permitting such disposition in respect of a deceased person.Adjudication proceedings dropped as to the deceased director; no penalty imposed on him.Final Conclusion: The adjudicating authority found failure to mention DIN in records for the financial year 2014-15, imposed penalties under Section 172 amounting to Rs.50,000 on the company and Rs.50,000 on the living director in default, and dropped proceedings as to the director who had died.

Violation of Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 - Private placement - return of allotment in Form PAS-3 with complete list of allottees - Penalty under Section 450 of the Companies Act, 2013 - Adjudication under Section 454(1) of the Companies Act, 2013 - Ex-parte adjudication under the Companies (Adjudication of Penalties) Rules, 2014Violation of Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 - Private placement - return of allotment in Form PAS-3 with complete list of allottees - Whether the company and its officer were in contravention of Rule 14(6) for failing to furnish complete details of allottees in the return of allotment - HELD THAT: - The record established that the company did not provide complete particulars required by Rule 14(6), specifically omission of Permanent Account Number and E-mail ID of security holders and omission of particulars such as class of security and date/number of securities, thereby breaching the requirement to file a return of allotment in Form PAS-3 with a complete list of allottees within the prescribed period. The adjudicating authority noted no reply from the company or its officers and proceeded ex parte under the Companies (Adjudication of Penalties) Rules, 2014. The authority further observed that the company is not a "small company" for the purpose of section 2(85) and therefore any lesser penalty under section 446(b) was not applicable. On these findings the authority concluded that the company and the officer in default committed contravention of Rule 14(6). [Paras 8, 9]Contravention of Rule 14(6) is established against the company and the officer in default; penalty under Section 450 of the Companies Act, 2013 is imposed accordingly.Penalty under Section 450 of the Companies Act, 2013 - Payment and consequences of non-compliance of adjudication order - Quantum of penalty to be imposed and procedural directions for payment and appeal - HELD THAT: - Applying Section 450 as the penal provision where no specific penalty is provided, the adjudicating authority imposed the minimum one time penalty on both the company and the officer in default. The order requires payment online within ninety days and records the right of appeal to the Regional Director (SR) within sixty days. The authority also recorded statutory consequences for non-compliance, including increased fines and potential imprisonment for officers in default as set out in section 454(8). [Paras 9, 10, 11, 12, 13]A penalty under Section 450 is imposed on the company and the officer in default; payment is to be made online within ninety days and appeal lies to the Regional Director (SR) within sixty days; statutory sanctions for non-compliance are drawn to attention.Final Conclusion: The adjudicating authority found that M/s Soundarambigai Benefit Fund Nidhi Limited and the officer in default violated Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 for incomplete particulars in the return of allotment, imposed penalties under Section 450 of the Companies Act, 2013, directed payment within ninety days, and recorded the right of appeal and consequences of non-compliance.

Insider trading - unpublished price sensitive information - insider (definition under regulation 2(e)) - price sensitivity (regulation 2(k)) - prohibition on dealing on unpublished price sensitive information (regulation 3(1)) - SEBI's power to issue directions and award compensation under section 11/11B - adjudication and penalty mechanism under section 15G/15J - criminal prosecution under section 24Insider trading - HLL purchased the specified shares of Brook Bond Lipton India Ltd. in March 1996. - HELD THAT: - The facts are undisputed and HLL admitted that the transaction in March 1996 took place. The Authority records this admission and treats the purchase as established for the purposes of subsequent issues. [Paras 8]Established that HLL purchased the shares in March 1996.Insider (definition under regulation 2(e)) - by virtue of such connection - HLL qualifies as an "insider" under regulation 2(e) because its connection through common management and dominant shareholder status gave it access to merger-related information by virtue of that connection. - HELD THAT: - The Authority analysed the three elements of regulation 2(e) and concluded that, while the appellants argued that the information was self-generated, the dominant position of Unilever and the presence of common directors made the companies effectively under the same management. On that basis the 'inprinciple' approval from the holding company could reasonably be treated as conveying access to decisionmaking in BBLIL and therefore as information obtained by virtue of the connection with the company. [Paras 9, 11]HLL is a deemed connected person and an "insider" for the purposes of the regulations.Unpublished price sensitive information - price sensitivity (regulation 2(k)) - The information about the proposed merger constituted "unpublished price sensitive information" within the meaning of regulation 2(k), subject to the tests of being not generally known and of being price sensitive. - HELD THAT: - The Authority rejected SEBI's restrictive reading that the enumerated items in regulation 2(k) need not satisfy the qualifying phrases. All information, whether enumerated (including amalgamation/mergers) or otherwise, must be both unpublished/not generally known and likely to materially affect price. Applying these tests, the Authority accepted that merger information can be price sensitive, although the extent of sensitivity may depend on particulars (for example, the swap ratio). The Authority also recognised that in the present case there was substantial market speculation and press reporting about a possible merger, which lessened the likelihood that the information was entirely unknown to the market. [Paras 12, 13, 17, 18]Information about the merger falls within regulation 2(k) as unpublished price sensitive information, but the degree of price sensitivity is factspecific and here was affected by prior market speculation.Prohibition on dealing on unpublished price sensitive information (regulation 3(1)) - HLL's acquisition of 8 lakh shares from UTI in March 1996 was motivated by knowledge of the impending merger and thus constituted dealing on the basis of unpublished price sensitive information in breach of regulation 3(1), although the market speculation lessened the transactional impact. - HELD THAT: - Having considered the sequence of events, the timing of the 'inprinciple' approval and the pattern of acquisitions, the Authority found sufficient circumstantial evidence to infer that the March 1996 purchase was motivated by knowledge of the merger (including urgency to protect Unilever's postmerger holding). The Authority accepted SEBI's para 41 finding to this extent. At the same time, because there was significant market speculation and press coverage before the purchase and UTI continued selling at prices close to the March transaction price after the announcement, the Authority held that the transaction was unlikely to have significantly altered the price at which the March deal was concluded. [Paras 20, 21, 22]The March 1996 acquisition amounted to dealing on the basis of unpublished price sensitive information and thus violated regulation 3(1), though the market's prior knowledge reduced the price impact of that dealing.SEBI's power to issue directions and award compensation under section 11/11B - adjudication and penalty mechanism under section 15G/15J - SEBI lacked jurisdiction and committed procedural error in awarding pecuniary compensation to UTI under its omnibus powers (section 11/11B) after conducting investigations under the Insider Trading Regulations instead of invoking the specific adjudication/penalty provisions; the compensation direction was quashed. - HELD THAT: - The Authority examined the statutory scheme and procedures in the regulations and Act. It held that SEBI could not investigate under the regulations and then, without using the statutory adjudication procedure or giving specific notice on quantum, impose a pecuniary burden on HLL by invoking general powers under section 11/11B. The Authority emphasised that section 15G (enacted after the regulations) provides the specific mechanism for penalties and that imposing monetary liability requires specific statutory authority and appropriate procedural safeguards. SEBI's concession that it should have given notice on quantum reinforced the Authority's conclusion. Consequently, the compensation order suffered from both procedural deficiencies and lack of jurisdiction. [Paras 23, 24, 25]SEBI's order awarding compensation to UTI is without jurisdiction and procedurally unsustainable and is set aside.Criminal prosecution under section 24 - adjudication and penalty mechanism under section 15G/15J - SEBI was not justified in ordering prosecution under section 24 on the basis of the present findings; however, SEBI remains free to invoke the adjudication mechanism under section 15G read with section 15I and 15J after following the prescribed procedure. - HELD THAT: - The Authority observed that an order of prosecution should be founded on a conclusive determination of all elements of the alleged offence and on specific justification for the gravity of criminal proceedings. Given that there was persuasive evidence of market speculation which weakened a core aspect of the insider trading charge (that information was not generally known), and given the procedural and substantive issues identified, the Authority held that ordering prosecution was not warranted. The Authority expressly left open SEBI's option to proceed by the statutory adjudication route (section 15G et seq.) after complying with that procedure. [Paras 26]Order for prosecution under section 24 set aside; SEBI may, if it so chooses, initiate adjudication under section 15G/15I/15J following the required procedure.Final Conclusion: The appeals are allowed in part: SEBI's findings that HLL was an insider and that the March 1996 acquisition involved dealing on mergerrelated unpublished price sensitive information are upheld (subject to the Authority's observations about prior market speculation and limited price impact). However, SEBI's order directing pecuniary compensation to UTI is quashed for lack of jurisdiction and procedural infirmity, and its direction to initiate prosecution under section 24 is set aside; SEBI may pursue the matter through the statutory adjudication process under section 15G/15I/15J after following the prescribed procedure.