BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI

Date of Decision : 16.8.2019

Appeal No.375 of 2018

Atcom Technologies Ltd.
6 Lalwani Industrial Estate
14, G.D. Ambekar Road, Wadala (W),
Mumbai – 400 031. ….. Appellant

Versus

The Ld. Adjudicating Officer Securities and Exchange Board of India SEBI Bhavan, Mumbai – 400 051. ……Respondent

Ms. Rinku Valanju, Advocate with Ms. Hiral Shah, Advocate i/b. R.V. Legal for the Appellant.

Mr. Sumit Rai, Advocate with Mr. Chirag Bhavsar, Advocate i/b. MDP & Partners for the Respondent.

CORAM: Justice Tarun Agarwala, Presiding Officer Dr. C.K.G. Nair, Member Justice M.T. Joshi, Judicial Member
Per : Justice Tarun Agarwala (Oral)

1.Against the order of the Adjudicating Officer imposing a penalty of Rs.8 lakhs for delay in obtaining SCORES
authentication the present appeal has been filed. By the impugned order a penalty of Rs.8 lakhs has been imposed.

2. The facts leading to the filing of the appeal is that pursuant to the provisions of Section 15T of the Securities
and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’) all listed companies were called upon to redress the grievances of the investors and inform them within 30 days of the receipt of the complaints. A circular dated 17.4.2013 was issued by which the companies were required to obtain SCORES user id and password within 30 days from the date of the issuance of the circular. Failure by the companies to obtain SCORES authentication would indicate willfull avoidance and attract the provision of Section 15A(a) of the SEBI Act.

3.Based on the aforesaid circular the appellant was required to obtain SCORES authentication within 30 days but the same was not obtained. According to the appellant, they obtained the SCORES user id and password
on 18th December, 2012 but subsequently found that the user id and password related to the investors and not to the Company and accordingly obtained fresh SCORES authentication on 22nd September, 2016. It was thus contended that the delay if any was not deliberate but was done on account of an inadvertent error. It was urged that no penalty should be imposed and at best only a warning should be issued. It was also contended that the appellant became a sick industry and the matter was referred to BIFR were the matter remained
pending between 2014 to 2018 and that is another reason why SCORES authentication could not be obtained within the stipulated periods.

4.Having heard the learned counsel for the parties we find that on account of not obtaining SCORES authentication he complaints by the investors were being physically forwarded by SEBI to the appellants. This resulted in the delay in the disposal of the complaints.

The purpose of redressal of investor grievances was that the complaint were required to be sorted out and informed to the investors within 30 days. Further, the said complaints were required to be listed and disseminated on the website which was not done.

5.Apparently, there is a delay of four years in complying with the circular dated 13th August, 2012. Consequently, the appellant had violated the circular and was liable for penalty. Considering the fact that the appellant became a sick industry between 2014 to 2018 coupled with the fact that ultimately
the SCORES authentication was obtained though belatedly we are of the opinion that in the interest of justice that for the delay of four years the penalty is reduced from Rs.8 lakhs to Rs.4 lakhs which shall be paid by the appellant within four weeks from today.

6.In the light of the aforesaid the appeal is partly allowed.

Sd/Justice Tarun Agarwala
Presiding Officer

Sd/Dr. C. K. G. Nair
Member

Sd/Justice M.T. Joshi
Judicial Member

16.8.2019

Prepared and compared by RHN