Tribunal allows appeal in securities market case, citing minimal involvement and lack of collusion evidence.

The Tribunal quashed the order debarring the appellant from the securities market due to minimal involvement in manipulative trading and lack of collusion evidence. The appeal was allowed, and no costs were imposed. The judgment was delivered via video conference with directions for parties to act on the digitally signed copy of the order.

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Issues involved:
Violation of Securities and Exchange Board of India Act, 1992; Violation of Regulations 3 and 4 of PFUTP Regulations; Service of notice to the appellant; Manipulative trading pattern; Debarment of the appellant from securities market; Connection of the appellant with other entities; Collusion and fraud allegations; Application of preponderance of probability; Contribution to Last Traded Price (LTP); Misapplication of Supreme Court's decision; Quashing of the impugned order.

Violation of Securities and Exchange Board of India Act, 1992 and PFUTP Regulations:
The judgment pertains to an appeal filed against an order debarring the appellant from accessing the securities market for six months and freezing the securities in the demat account. The investigation revealed manipulative trading patterns in the scrip of a company, leading to artificially raised prices. The Whole Time Member found the appellant's involvement in trades resulting in a positive contribution to the Last Traded Price (LTP), violating Regulations 3 and 4 of the PFUTP Regulations.

Service of Notice and Appearance of Appellant:
The appellant contended that no notice was served upon them, challenging the validity of the impugned order. However, the Tribunal noted that the summons were served through affixation, and the appellant failed to appear despite being duly served. The appellant's decision not to appear was considered voluntary, and the contention of improper service was dismissed.

Manipulative Trading Pattern and Connection with Other Entities:
Out of 983 trades investigated, the appellant was involved in only one trade resulting in a minor positive LTP contribution. The Tribunal observed that the appellant's limited involvement did not align with the premeditated trading patterns of other entities. The appellant's connection with other noticees was based on commonalities like email and address, but no substantial collusion was proven.

Collusion and Fraud Allegations:
The judgment highlighted the absence of direct evidence linking the appellant to collusion or fraud with other entities. The Tribunal emphasized the necessity of establishing a connection between the buyer and seller to prove collusion, which was lacking in this case. The appellant's single trade did not demonstrate fraudulent or unfair trade practices.

Application of Preponderance of Probability and Misapplication of Supreme Court's Decision:
The Tribunal criticized the misapplication of the Supreme Court's decision in a similar case, emphasizing that the appellant's single trade did not indicate manipulation. The judgment clarified that selling a miniscule quantity of shares does not imply manipulation without evidence of collusion. The application of preponderance of probability was deemed inappropriate in the absence of substantial connections.

Quashing of the Impugned Order:
Considering the appellant's minimal involvement in the manipulative trading pattern and the lack of collusion evidence, the Tribunal quashed the impugned order debarring the appellant from the securities market. The appeal was allowed, and no costs were imposed. The judgment was delivered via video conference due to the Covid-19 pandemic, with directions for parties to act on the digitally signed copy of the order.

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