2020 (1) TMI 1485

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....a ('SEBI') restraining the appellant from accessing the securities market for a period of two years and further prohibiting the appellant from buying, selling or otherwise dealing in the securities directly or indirectly for a period of two years. The appellant has also filed another Appeal No. 544 of 2019 questioning the order of the Adjudicating Officer ('AO' for short) dated June 25, 2019 whereby a penalty of Rs. 2 lakh was imposed for violation of Regulation 3 and 4 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 ('PFUTP Regulations' for short). Since both the appeals are against the same violation of the PFUTP Regulations and for the same transaction in question, t....

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.... order passed an order imposing a penalty of Rs. 2 lakh. 4. We have heard Shri Saurabh Bachhawat, the learned counsel for the appellant and Shri Kumar Desai, the learned counsel for the respondent SEBI at some length. We are of the opinion that the impugned order cannot be sustained for the following reasons:- (a) The investigative reports nor the WTM or the AO found any connection between the buyer and the seller. We also find that neither in the investigative report nor in the impugned order any connection has been found between the appellant with the promoters / directors of the Company. Thus, no causal connection has been established. (b) The investigative report finds that no adverse inference can be drawn against the buyer merely....

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....uch scrips though listed in the Bombay Stock Exchange were not a matter of everyday buy and sell transactions. While it is correct that trading in such illiquid scrips is per se not impermissible, yet, voluminous trading over a period of time in such scrips is a fact that should attract the attention of a vigilant trader engaged / engaging in such trades. The above would stand fortified by the note of caution issued by the Bombay Stock Exchange in the form of a notice/memorandum alerting its members with regard to the necessity of exercising care and caution in case of high volume of trading in illiquid scrips, as already noted." In order to apply the aforesaid test, the facts of the present case is, that there is no direct evidence of co....