Tribunal overturns order, approves appeals. No evidence of insider trading found.

The Tribunal set aside the impugned order, allowing all three appeals without costs. It found that while Mr. Manoj Gaur possessed Unpublished Price Sensitive Information (UPSI), there was no evidence he shared it with others or that their trading was based on UPSI. The trading patterns indicated normal business transactions, leading to the conclusion that there was no violation of insider trading regulations.

---

---

Issues Involved:
1. Violation of Regulation 3 and 4 of SEBI (Prohibition of Insider Trading) Regulations, 1992.
2. Imposition of penalty u/s 15G of the SEBI Act, 1992.
3. Alleged violation of principles of natural justice.

Summary:

1. Violation of Regulation 3 and 4 of SEBI (Prohibition of Insider Trading) Regulations, 1992:
The appellants were accused of violating Regulation 3 and 4 by trading based on Unpublished Price Sensitive Information (UPSI). The Board alleged that Mr. Manoj Gaur, Executive Chairman of the company, was in possession of UPSI regarding the company's financial results for the quarter ending September 30, 2008, which he communicated to Mrs. Urvashi Gaur and Mr. Sameer Gaur. Both traded in the company's shares based on this information before it was made public on October 21, 2008.

2. Imposition of penalty u/s 15G of the SEBI Act, 1992:
Show cause notices were issued to the appellants, and a penalty of Rs. 10 lakhs each was imposed for violating the insider trading regulations. The appellants contended that the financial results were not known until October 17, 2008, and challenged the presumption that the closure of the trading window on October 11, 2008, indicated the existence of UPSI.

3. Alleged violation of principles of natural justice:
The appellants argued that they were not provided with the investigation report, which was a violation of natural justice. The Tribunal noted that regulation 9(1) only requires the findings of the investigation report to be communicated, which was done. Therefore, there was no violation of natural justice.

Findings:
The Tribunal upheld that Mr. Manoj Gaur was in possession of UPSI on October 11, 2008, based on the company's admission that trial balances were available by that date. However, it found no direct or circumstantial evidence that Mr. Manoj Gaur passed on this information to Mrs. Urvashi Gaur or Mr. Sameer Gaur, or that their trading was based on UPSI. The trading patterns and the small quantities traded suggested that the trades were made in the normal course of business.

Conclusion:
The impugned order was set aside, and all three appeals were allowed, with no order as to costs.

---