TaxTMI 
TaxTMI 
2016 (10) TMI 1305
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.... the three impugned orders, along with the Appeals against each of the three, is given hereinbelow: * Impugned order dated September 30, 2014 bearing Adjudication Order No. CFD/APIL/AO/DRK/AKS/EAD3- 619-643/163-188/214 imposing penalty of Rs. 15 lac under Section 15H(ii) of SEBI Act, 1992 for failure to comply with Regulations 11(1) read with Regulation 14(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. It covers appeal Nos. 470, 471, 475, 477, 481, 485 of 2015 i.e. 6 appeals in all. It involves 25 entities and the acquisition period in all appeals is 2000-2001. Regulation 11(1) of the SAST Regulations lays down that any person who already owns 15% or more shareholding in a company, but less than 75%, must make a public announcement if it intends to purchase new shares amounting to more than 5% shareholding in a particular year. * Impugned order dated September 30, 2014 bearing Adjudication order No. CFD/APIL/AO/DRK-AKS/EAD3- 605-618/149-162/2014 imposing penalty of Rs. 15 lac under Section 15H(ii) of SEBI Act, 1992 for failure to comply with Regulations 11(2) read with Regulation 14(1) of the SEBI (Substantial Acquisitio....
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....quire, either by himself or through or with persons acting in concert with him, additional shares or voting rights entitling him to exercise more than 5% of the voting rights, in any period of 12 months, unless such acquirer makes a public announcement to acquire shares in accordance with the Regulations. 14(1) The public announcement referred to in regulation 10 or regulation 11 shall be made by the merchant banker not later than 4 working days of entering into an agreement for acquisition of shares or voting rights or deciding to acquire shares or voting rights exceeding the respective percentage specified therein:" 5. Show Cause Notice dated June 26, 2014 ("SCN") was issued by the Respondent - Securities and Exchange Board of India ("SEBI") to the Appellants asking them to show cause as to why action should not be taken against them for the violation of Regulation 11(1) read with Regulation 14(1) of the SAST Regulations. Opportunity of personal hearing was granted and availed of by the Appellants on September 4, 2014. Reply to the SCN was filed by the Appellants on September 15, 2014. After considering all the material on record, SEBI issued impugned order dated Sept....
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....t time i.e 2000-2001, the maximum penalty prescribed in Section 15H(ii) was Rs. 5 lac. The law was later amended and the penalty increased to Rs. 15 lac. The Appellants therefore submit, without prejudice to their other submissions, that the penalty prescribed at the relevant time alone shall be applicable in this case. Further, it took the Respondent 14 years to penalize the Appellants for the alleged misconduct. The Appellants submit that such an unwarranted delay ought not to be condoned by this Tribunal. 10. Turning to the case of the Respondent, it is submitted before this Tribunal that Regulation 11(1) read with Regulation 14(1) of the SAST Regulations makes it abundantly clear that in case of an acquirer who already owns 15% shareholding or more of the target company, but less than 75% shareholding of the same, such an acquirer on purchase of additional shareholding amounting to more than 5% in a period of 12 months, must make a public announcement within four days of such acquisition. 11. In the present case, the Respondent submits that it has been accepted by the Appellants at the stage of the personal hearing in response to the SCN itself that the Appellants had in ....
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....rticipants to ensure that such mistakes as acquiring more than the creeping acquisition limit of 5% without making the necessary public announcement are not made. 17. Various decisions have been cited by learned counsel for the appellants in support of his contention that in view of delay in initiating proceedings, penalty cannot be imposed against the appellants and that the appellants are not estopped from taking a stand contrary to the stand taken before the learned A.O. We see no merit in the above contentions. As such, there is no provision in the SEBI Act, which may have the effect of prohibiting SEBI from taking action beyond a particular period of time in a given case. However, it goes without saying that the regulator should always make an endeavor to take prompt action against the defaulting companies to render speedy and timely justice. In the present case, however, action was taken immediately after SEBI came to know about the violations. Therefore, delay, in itself, cannot defeat the ends of justice in the facts and circumstances of the case in hand. Moreover, there is nothing on record to suggest that the admission made by the appellants before the A.O. that the ac....