2018 (6) TMI 1737

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...."SEBI" for short) on 20.07.2017. By that order penalty of Rs. 7 lac is imposed on the appellant under Section 15HA of the Securities and Exchange Board of India Act, 1992 ("SEBI Act" for short) for violating Section 12A (a) to (c) of SEBI Act and regulations 3(a) to (d), 4(1) and 4(2)(a) & (e) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 ("PFUTP Regulations" for short). 2. Dispute in the present case relates to the trading in the shares of Out of the City Travel Solutions Limited ("Company" for convenience) during the period from 27.07.2012 to 28.02.2013. During the said investigation period it was noticed that while the Bombay Stock Exchange Sensex moved from 16,839.19 to....

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.... the market NHP in 9 trades with total volume of 9 shares. 16. Noticee has submitted that he is not connected with the persons whose names are appearing in the SCN and had no fraudulent intention when he dealt in the scrip of OCTSL. Noticee submitted that he deals in the shares of various companies in small quantities for as low as 1 share. It is noted that price of the scrip of OCTSL had risen from Rs. 10.19 to Rs. 187.40 i.e. by Rs. 177.21, a whopping 1739.06% increase during the investigation period. It is an illiquid scrip. Whereas during the same period Sensex had registered a growth of 12.01% only. Noticee bought 152 shares of OCTSL in 45 trades and these trades had the effect of net positive LTP of Rs. 85.35. It took 4062 tr....

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.... the SEBI Act and the PFUTP Regulations. b) Trades executed by the appellant were the normal trades and in the absence of any connection established between the appellant and the company or the counter parties, SEBI is not justified in holding that the appellant had indulged in manipulative trades. c) In any event, penalty of Rs. 7 lac imposed on the appellant is unreasonable and exorbitant. 7. Accordingly, it is submitted that the impugned order be quashed and set aside. Alternatively, it is submitted that the penalty may be reduced to the extent as this Tribunal deems it fit and proper. 8. We see no merit in the aforesaid contentions. 9. Facts recorded in paras 15 to 17 of the impugned order clearly establish th....