AI Drafter 
TaxTMI 
TaxTMI 
2025 (11) TMI 1351
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.... of Rs. 39,64,800/- for violation of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('LODR Regulations' for short). The fine has been imposed for delayed submission of quarterly consolidated financial statement for quarter ended on September and December 2019. The Respondent had suspended the Company from trading on its platform from January 18, 2021 on account of non-compliance with Regulation 33 of LODR Regulations. The entire shareholding of the promoters held in demat account was also frozen w.e.f. December 16, 2022. 2. The facts leading to the filing of the present appeal are as follows: - The appellant is a registered Company in the business of trading and investing in equity of domestic companies. The shares of Appellant have been listed on BSE since 2015. Based on SEBI's informal guidance in the matter of Shriram Transport Finance Company Limited issued on August 02, 2019, the BSE had issued a circular dated September 26, 2019 which stated "it is mandatory for the listed companies to file quarterly/year-to-date consolidated financial results. For this purpose, companies are required to consolidate the accounts of Subsidia....
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....including GST). However, the Committee upheld its earlier decision to reject the waiver request for the remaining outstanding fine. 5. We have heard Shri Kunal Katariya, learned Advocate for the Appellant, Shri Manish Chhangani, learned Advocate for BSE and Shri Sumit Rai, learned Advocate for SEBI. 6. Before us, the main argument of the Appellant was that Regulation 33 of LODR Regulations does not provide for consolidation of accounts of associate companies, consolidation of quarterly financial statements is required only when there is a subsidiary. The Appellant does not have any subsidiary and has only associate companies; the details thereof were disclosed in its Annual Report. BSE issued a Circular dated September 26, 2019 which made it mandatory for listed companies to file quarterly/year to date consolidated financial results. The circular stated that the companies are required to consolidate the financial statements of subsidiary and or its Associate Companies/Joint Ventures as the case may be with the Standalone results of the listed Company. This Circular based on a SEBI's informal guidance in the matter of Shriram Transport Finance Company Limited was not binding o....
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.... without following the due process of law for restoration of trading which include payment of applicable fees and other compliances. 9. On merits, the contention of the Respondent No. 1 was that every listed Company has to comply with listing and disclosure requirement as per LODR Regulations. Regulation 4(g) of LODR Regulations mandates on all listed companies to abide by all applicable laws and other guidelines as issued by SEBI and the Stock Exchanges. Further, the Appellant had entered into a Listing Agreement with the Respondent No. 1 dated December 29, 2015 whereby the Appellant has undertaken to comply with Rules, By-laws and Regulations of the BSE and the Circulars issued by SEBI / BSE from time to time. 10. As part of compliance with LODR Regulations, a listed entity in terms of Regulation 33(3) is required to submit quarterly and year to date financial results on standalone and/or consolidated basis to the Stock Exchanges within 45 days of end of each quarter, other than the last quarter. With effect from March 31, 2017, the format for financial results to be submitted by listing entities was as per the formats as prescribed in Schedule - III of the Companies Act, 2....
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.... and de-freezing of its promoter's demat accounts without impugning the suspension notice and notice freezing the demat accounts. The Appellant did not challenge these noticees at relevant time and so, in effect, they accepted the orders and cannot be allowed to challenge them belatedly with a delay of more than 1200 days. 13. We do not agree with the preliminary objections raised by the Respondent No. 1 as in our view the Company's suspension from trading and freezing of promoter's accounts are consequences arising from alleged non-compliance of Regulation 33 of LODR, a matter which forms the very basis of this appeal. We note that the Appellant was in constant communication with BSE and was given opportunity to put his case to the Request Review Committee, therefore, in our view this was a continuous single process which culminated in the impugned order. Further, trading in the securities of the Appellant was suspended for non-compliance for two consecutive quarters - March and June 2020. Promoter's demat accounts were frozen for non-payment of fines imposed due non-compliance with provisions of Regulation 33 of LODR (Financial Results) for March 2020. We note that the Committ....
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.... has subsidiaries it has to prepare and submit quarterly and annual consolidated financial results. Thus, as per Regulation 33(3)(b) it is only in case that a listed entity has subsidiary, it needs to be submitted quarterly financial statement. Schedule III of the Companies Act, 2013 which provides general instruction for the preparation of consolidated financial statements starts with the phrase "where a company is required to prepare consolidated financial statement..........". Instruction No. 3 states that "all subsidiaries, associates or joint ventures (whether Indian or foreign) will be covered under consolidated financial statements". Schedule III of the Companies Act flows from Section 129(1) and lays down format of accounts required under the Section. Section 129(2) states that the financial statement for the financial year are to be laid in the annual general meeting of a Company. Section 129(3) states that where a company has one or more subsidiaries or associate company, it shall along with standalone financial statement prepare consolidated financial statement for a financial year. Thus, the Section 129 of Companies Act read along with Schedule III is specific to prepar....
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....made any clarification till date. In our view, the Appellant should be given benefit of doubt with regard to this ambiguous position. Accordingly, we hold that there is no violation of Regulation 33(3) of LODR Regulations by the Appellant and the fines imposed have no basis. Hence the following:- ORDER (i) Appeal is allowed with no order as to costs. Impugned communication dated January 2, 2024 is set aside; (ii) Suspension of trading in Appellant's scrip may be lifted and the promoter's accounts be de-freezed with immediate effect; (iii) SEBI may examine the issue regarding the need for consolidation of quarterly financial results by listed companies having only Associates / Joint Ventures without having any subsidiary, and issue necessary clarification in this regard; Pending Interlocutory applications(s), if any, stand disposed of. No costs. Misc. Application No. 671 of 2025 In Appeal No. 191 of 2024 Justice P.S. Dinesh Kumar, Presiding Officer, Ms. Meera Swarup, Technical Member, And Dr. Dheeraj Bhatnagar, Technical Member For the Applicant : Mr. Sumit Rai, Advocate with Mr. Mihir Mody, Mr. Harshvardhan Melanta, Mr. Yash Sutaria and Mr. Tushar Bansode....