TaxTMI 
TaxTMI 
2022 (5) TMI 760
X X X X Extracts X X X X
X X X X Extracts X X X X
....ities, either directly or indirectly, till further orders. 2. The facts leading to the filing of the present appeal is, that Securities and Exchange Board of India (hereinafter referred to as "SEBI") conducted an examination in respect of the trading activities of two partnership firm, namely, M/s. Capital One Partners and M/s. Tesora Capital in the scrip of M/s. Infosys Ltd. In the preliminary examination, it was prima facie observed that corporate announcement of audited financial results for the quarter ended 30th June, 2020 was made by Infosys on 15th July, 2020. The information relating to the financial results was an Unpublished Price Sensitive Information ("UPSI" for short) which came into existence on 29th June, 2020 and came to an end on 15th July, 2020 when the final results were announced. It was also found that the appellant was a Senior Corporate Counsel of Infosys and, being an officer/employee of Infosys, was reasonably expected to have access to the UPSI and, on a preponderance of probability basis, the appellant was in possession of UPSI and thus, was an insider under Regulation 2(1)(g) of the PIT Regulations. The preliminary examination further revealed that he....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nce and health insurance policies of the group and issues relating to provident fund contribution, etc. The appellant specifically denied any discussion relating to financial results or relating to the UPSI. It was also contended that as per the structured data base Mr. Venkata did not receive any UPSI nor had any access to UPSI. It was also stated that the conversation which the appellant had with Mr. Venkata on 9th July, 2020 was relating to maternity benefits at the cost of the Company only to those employees who were not eligible to receive maternity benefits from Employees" State Insurance Corporation. The appellant, however, admitted that he was related to Mr. Amit Bhutra who were second cousins but denied passing on any sensitive information relating to Infosys to Mr. Amit Bhutra. The appellant further denied having knowledge of any transactions done by Amit in Infosys or any other Company. 5. The Whole Time Member ("WTM" for short) inspite of noting the stand of the appellant and inspite of observing that the appellant to some extent was successful in making out a case warranting modification in the directions was, however, enamoured by the fact that the appellant was wo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to UPSI. "Connected person" has been defined under Section 2(1)(d) of the PIT Regulations which is extracted hereunder: "2.(1) In these regulations, unless the context otherwise requires, the following words, expressions and derivations therefrom shall have the meanings assigned to them as under:- ........... (d) "connected person" means,- (i) any person who is or has during the six months prior to the concerned act been associated with a company, directly or indirectly, in any capacity including by reason of frequent communication with its officers or by being in any contractual, fiduciary or employment relationship or by being a director, officer or an employee of the company or holds any position including a professional or business relationship between himself and the company whether temporary or permanent, that allows such person, directly or indirectly, access to unpublished price sensitive information or is reasonably expected to allow such access. (ii) Without prejudice to the generality of the foregoing, the persons falling within the following categories shall be deemed to be connected persons unless the contrary is establishe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that appellant was in communication with Mr. Venkata who was a designated person in Infosys and was, therefore, deemed to have access to and in possession of UPSI. On this basis, WTM prima facie opined that the appellant must have access to UPSI from someone and, in any case, from Mr. Venkata and in turn had passed on this information to his cousin Mr. Amit Bhutra who in turn traded in the scrip of the Company in his partnership firm. 10. Whereas, on this basis, it was sufficient for the WTM to pass an ad-interim order but when further evidence comes forward which is taken note of then in our opinion the continuation of the ex-parte ad-interim order in so far as it relates to the appellant cannot continue and, therefore, in our opinion the impugned order confirming the ex-parte ad-interim order cannot be sustained for the following reasons:- a) Under Regulation 3(5) of the PIT Regulations, 2015 all listed companies are mandated to maintain SD data base containing details of all the persons with whom UPSI is exchanged alongwith the date and time stamping and verifiable audit trails. A specific finding has been given by the WTM that the SD data base which captures details....