TaxTMI 
TaxTMI 
2025 (11) TMI 610
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....ocates i/b the Law Point ORDER Per: Ms. Meera Swarup, Technical Member This appeal has been filed by Noticee Nos. 1 to 5 Sanjeev Kalra, R.K. Sharma Son HUF, Sangeeta Sharma, Dhruv Sharma and Mohit Sharma (Appellants), challenging order dated December 20, 2022 passed by the AO Adjudicating Officer, SEBI Securities and Exchange Board of India imposing a penalty of Rs. 20 lakh under Section 15-I of the SEBI Act, 1992 on 15 entities including the five Appellants, payable jointly and severally. 2. The brief facts of the case are, SEBI carried out an investigation in the matter of trading in the scrip of the Edynamics Solutions Limited (ESL). It was observed that noticees had created artificial/fictitious volumes and gave false and mi....
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....,000 shares each on April 3, 2013 @ Rs. 10/- per share. Appellant No. 1 was allotted 1,50,000 twice subsequently. In all, the five Appellants were holding 8,84,000 shares at the end of quarter ended December, 2016 and sold their entire holding in ESL during patch-1 of the IP on 2 days i.e. March 3, 2017 and March 14, 2017. The counter parties were five connected entities of Group - 1 and one Dhanlaxmi Builder and Developers Pvt. Ltd. Looking at the trading pattern of the Appellants and the counter parties, SEBI alleged that there was a meeting of minds between them leading to the conclusion that the Appellants were connected to the other entities in Group - 1. The Appellants were alleged to be part of a common manipulative and fraudulent st....
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....per share. After four years they sold the shares at almost the same price, between Rs. 10.95 to Rs. 9.02. Therefore, no market manipulation can be alleged against them. The trades carried out by them were miniscule when compared to the market volume during the IP. In short, the Appellants pleaded that their case is distinct and dissimilar from the other entities mentioned in the impugned order and that the Respondents have erred in passing the unjust and untenable impugned order. 7. On the other hand, the main argument of the learned Advocate for the Respondent was that the pattern of trading shows the connection between entities. The sell orders of five connected entities of Group - 1 and Dhanlaxmi Builders and Developers Pvt. Ltd. were....
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....the IP. 8. Having heard the parties and upon perusal of the impugned order, we find that as per paragraph 23 of the impugned order though the Group 1 entities were connected to each other, the Respondent could not establish any connection between Group 1 and Group 2 entities. There are also no allegation of any connection of Group 1 entities with the promoters or directors of ESL. There were no trades inter-se within Group 1 entities. In paragraph 33 and 34 of the impugned order, the AO has endeavored to create a connection between the two counter-parties on the basis of trading pattern. The appellants have traded on only two days i.e. March 3, 2017 and March 14, 2017 by selling off all the shares of the scrip held by them. The trades we....