AI Drafter 
TaxTMI 
TaxTMI 
2023 (11) TMI 64
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....lent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (hereinafter referred to as 'PFUTP Regulations') as well as under Section 21 of the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as 'SCRA') read with Clauses 36 and 50 of the Listing Agreement. A sum of Rs. 25 lakh has been imposed upon the company Kaashyap Technologies Ltd. noticee nos. 1. A sum of Rs. 20 lakh has been imposed upon noticee nos. 2. A sum of Rs. 10 lakh each has been imposed upon noticee nos. 3, 4, 5 and 6. 2. The facts leading to the filing of the present appeal is, that the Board of Directors of the company known as Kaashyap Technologies Ltd. passed a resolution on October 4, 2007 for opening a bank account with Banco Efisa, S. F. E., S. A. (hereinafter referred to as 'Banco') for depositing the GDR proceeds. 3. The resolution approved by the Board of Directors resolved that a bank account would be opened with Banco for the purpose of receiving the subscription money in respect of GDR issue. Further, Mr. A. Venkatramani, CMD, was authorised to sign and execute an agreement as may be required by the Bank and take such steps from time to time on behalf of t....
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....charged with violation of Section 12A of the SEBI Act and Regulations 3 and 4 of the PFUTP Regulations. 7. The AO after considering the evidence on record found that the entire scheme of using the GDR proceeds to fund a subscriber to the GDR issue was a fraudulent scheme and violative of Section 12A of the SEBI Act and Regulations 3 and 4 of the PFUTP Regulations. The AO found that the GDR was subscribed by one entity, namely, Clifford and not by four entities as disclosed by the company vide its letter dated June 18, 2015. The AO further found that on account of the pledge created by the company with Banco the funds were not made available at the company's disposal and the same became available in tranches as and when the loan amount was repaid by Clifford. Further, the loan agreement was not disclosed to the stock exchange and to the Indian investors. Further, the disclosure made by the company to the stock exchange that the GDR issue was fully subscribed was misleading as the investors were not informed that the GDR was subscribed by only one entity and, therefore, the scheme hatched by the Company and its Directors was violative of Section 12A of the SEBI Act and Regulations....
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....mposed upon them was wholly inappropriate. In support of their submission, the learned counsel placed reliance upon decisions of this Tribunal in Sayanti Sen vs. SEBI Appeal No. 163 of 2018 decided on August 9, 2019 and Prafull Anubhai Shah vs. SEBI Appeal No. 389 of 2021 decided on June 28, 2021. It was also urged in the alternative that the penalty imposed upon the appellants is excessive and disproportionate and should be appropriately reduced. 12. On the other hand, the respondent supported the impugned order and contended that the modus operandi is the same as has been dealt with by this Tribunal in a large number of matters relating to the GDR issue wherein this Tribunal has held that the nondisclosure of the loan agreement and the pledge agreement was totally fraudulent and violative of the Listing Agreement. 13. Having heard the learned counsel for the parties, we find that this modus operandi in the instant appeals is the same and has been dealt with by this Tribunal in a large number of matters relating to the GDR issue wherein the Tribunal has held that non-disclosure of the loan agreement and the pledge agreement was totally fraudulent and violative of the Listing....
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....nally protected right which can be traced to Article 14 as well as Article 21 of the Constitution. The doctrine of proportionality is aimed at bringing out "proportional result or proportionality stricto sensu". It is a result oriented test as it examines the result of the law in fact the proportionality achieves balancing between two competing interests: harm caused to the society by the infringer which gives justification for penalising the infringer on the one hand and the right of the infringer in not suffering the punishment which may be disproportionate to the seriousness of the Act." 17. Similar view was expressed by the Delhi High court in Rajkumar Dyeing and Printing Works Pvt. Ltd. In Rajendra Yadav, the Supreme Court held that the doctrine of equality applies to all those who are found guilty. The Supreme Court held :- "9. The doctrine of equality applies to all who are equally placed; even among persons who are found guilty. The persons who have been found guilty can also claim equality of treatment, if they can establish discrimination while imposing punishment when all of them are involved in the same incident. Parity among co-delinquents has also to be ma....
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.... is taken by an authority which is contrary to law or which is improper or where the action taken is unreasonable then the Court of law is duty bound to interfere with such action and one such mode of exercising power is to exercise the doctrine of proportionality. Where the punitive measure is harsh or disproportionate to the offence which shocks the conscience it is within the discretion of the Court to exercise the doctrine of proportionality and reduce the quantum of punishment to ensure that some rationality is brought to make unequals equal. 20. In this regard, we find that SEBI has passed various orders against company and its directors imposing different penalties for identical / similar offences. In a large number of penalties ranging from Rs. 25 lakh to Rs. 1.25 crore have been imposed upon the companies which we have appropriately reduced to Rs. 25 lakh. Similarly, for managing director considering the factor in each of the case the penalties have been reduced to Rs. 10 lakh and Rs. 20 lakh. Similarly, in many cases the penalty ranging from Rs. 5 lakh and Rs. 10 lakh have been imposed upon the directors. In a large number of cases, we have exonerated independent direc....