TaxTMI 
TaxTMI 
2015 (6) TMI 792
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.... 2. Whether Adjudication Officer ("AO" for short) of Securities and Exchange Board of India ("SEBI" for short) is justified in imposing penalty of Rs. 1 lac under Section 15A(b) of the Securities and Exchange Board of India Act, 1992, ("SEBI Act, 1992" for short) on the ground that appellant has violated regulation 7 (1) and regulation 7(2) of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 ("SAST Regulations, 1997" for short) and regulation 13(1) and regulation 13(3) read with regulation 13(5) of SEBI (Prohibition of Insider Trading) Regulations, 1992 ("PIT Regulations, 1992" for short) is the question raised in this appeal. 3. Appellant is a house wife. Appellant is a post graduate in commerce and is also engaged ....
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....w cause notice refuting allegations made in show cause notice. Thereafter, personal hearing was granted to appellant and by impugned order dated September 30, 2013, AO has imposed penalty of Rs. 1 lac under Section 15A(b) of SEBI Act, 1992 for non compliance of the provisions of regulation 7(1) and regulation 7(2) of SAST Regulations, 1997 and regulation 13(1) and regulation 13(3) read with regulation 13(5) of the PIT Regulations, 1992. Challenging aforesaid order, present appeal is filed. 7. Counsel appearing on behalf of appellant submitted that in anticipation of receiving loan from appellant, ACL instead of creating a lien on the shares of Arvind International, erroneously and without the knowledge of appellant, transferred 3,75,000 sh....
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.... from the date of erroneous transaction and view of the fact that no investor has suffered on account of erroneous transactions, penalty imposed upon the appellant is unjustified. Counsel for appellant further submitted that mitigating circumstances set out under Section 15J of the SEBI Act, 1992 having not been taken into consideration, it is a fit case for setting aside the penalty imposed upon the appellant. 9. We find it difficult to accept the aforesaid arguments advanced by counsel for appellant. 10. Under regulation 7(1) and regulation 7(2) of SAST Regulations, 1997 any acquirer who acquires shares which (taken together with shares if any held by him) would entitle him to more than five percent or ten percent or fourteen percent or....
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....y appellant is a post graduate in commerce and apart from carrying on the profession of consultancy appellant has been advancing short term loans to various companies. It is only after appellant agreed to advance loan, ACL transferred shares to the demat account of appellant. Unless appellant had furnished her demat account number, ACL could not have transferred shares. Assuming that shares were erroneously transferred no explanation is given as to how the shares remained in the demat account of the appellant for 43 days. 12. Argument that no investor has suffered on account of non disclosure and that the AO has not considered the mitigating factors set out under Section 15J of SEBI Act, 1992 is without any merit because firstly penalty fo....