TaxTMI 
TaxTMI 
TaxTMI 
2016 (10) TMI 1308
X X X X Extracts X X X X
X X X X Extracts X X X X
....lant under section 15HA of the Securities and Exchange Board of India Act, 1992 (SEBI Act for short) for violating the provisions contained in the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations for short). 2. Facts relevant for the present appeal are as follows:- a) SEBI conducted investigation in respect of buying, selling and dealing in the shares of Gangotri Textiles Limited (Gangotri for short) during the period from 7.4.2006 to 31.5.2006. The shares of Gangotri are listed on the Bombay Stock Exchange (BSE for short) and on the National Stock Exchange of India Ltd. (NSE for short). b) During the investigation period it ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re offered, however, the appellant failed to avail the said opportunity. Hence on the basis of material on record the impugned order was passed. 3. Mr. Jain, learned Advocate appearing on behalf of the appellant submitted as follows:- a) Fact that the appellant had the same address as that of Avisha Credit and Vishvas Projects Ltd., an entity allegedly connected to the Vishvas Group, and merely because appellant was a shareholder to the extent of 19.24% in Vishvas Securities Ltd. and the appellant had off market- transfers with Vishvas Securities Ltd., it could not be inferred that the appellant belonged to Vishvas group and that the trades executed by the appellant were in violation of PFUTP Regulations. b) The Adjudicating Officer is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....p entities, the A.O. with facts and figures has established that the appellant is totally wrong in contending that it had bought 5804 shares of Gangotri and sold 7000 shares of Gangotri during the investigation period. In the impugned order it is recorded on the basis of trade and other logs that during the investigation period, appellant had traded in the scrip of Gangotri at BSE as well as NSE and bought 38,000 shares and 20500 shares of Gangotri and sold 18,386 shares and 1,11,400 shares of Gangotri at BSE and NSE respectively. 7. Apart from the above, the A.O. has recorded a finding that in respect of several trades executed by and between appellant and Vishvas Group of entities, the difference between buy order time and sell order tim....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ollowing:- a) Out of the 38,000 shares of Gangotri bought by the appellant at BSE, during the investigation period, 27,399 shares were involved in circular trading with the other members of Vishvas group i.e. MEFCOM, Purshottam Khandelwal (Purshottam for short) and Praveen Poddar (Praveen for short). b) Out of 18,386 shares of Gangotri sold by the appellant at BSE during the investigation period, 18,386 shares were involved in circular trading with the other members of the Vishvas Group i.e. Purushotam and ISF Securities Ltd (ISF for short). c) Similarly, out of 20,500 shares of Gangotri bought by the appellant during the investigation at NSE, 9814 shares were involved in circular trades with the members of the Vishvas Group. d) Out....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Vishvas Group but also demonstrated that the trading pattern among themselves resulted in synchronized trades and circular trades which were in violation of the PFUTP Regulations. 11. Fact that the appellant had incurred loss by executing the trades in question cannot be a ground to infer that the said trades were not in violation of the PFUTP Regulations. Having violated the PFUTP Regulations, the appellant cannot escape the penal liabilities merely because the appellant chose to incur losses on account of the trades in question. 12. Argument of the appellant that before initiating action against the appellant it was obligatory on the part of SEBI to investigate into the question as to whether the mitigating factors set out in sectio....