The appellant is aggrieved by the order dated September 24, 2012 passed by the adjudicating officer of the Securities and Exchange Board of India (for short Board) imposing a penalty of ` 6 lakhs under section 15A(a) of the Securities and Exchange Board of India Act, 1992 ( the Act) for violating the provisions of Sections 11C(2), 11C(3) and 11C(5) of the Act.
2. The appellant was issued two summons, one on February 23, 2011 and second on May 9, 2011 asking the appellant to furnish certain information with reference to the investigation initiated by the Board in the scrip of Bank of Rajasthan Limited. Admittedly, the appellant has not responded to the summons. The appellant is disputing receipt of the second summons, although the acknowledgement has been produced by the respondent Board. It is the case of the appellant that the signature on this acknowledgement is not of any one of the employees of his company. With regard to the first summons, which was admittedly received by the appellant, it is submitted that the appellant was under the impression that the summons were wrongly addressed to him. It was further contended that the appellant was not connected with the Bank of Rajasthan Ltd. at all and had never purchased any share of that bank. The appellant received the summons as one Ms. Sangeeta Sawant who was said to be director of a large number of companies was connected with the promoters of the Bank of Rajasthan Ltd. and she was working with the appellant. In his reply before the Board, the appellant had apologized for not appearing and clearing his position and requested that he may be pardoned. However, the Board has imposed a penalty of ` 6 lakhs based on the ground that the appellant has not responded to two summons whereas, the appellant had received only one summons. Therefore, according to the appellant, the penalty imposed by the adjudicating officer based on the alleged non-compliance of two summons by the appellant is excessive and exorbitant.
3. We have heard the learned counsel for the parties and have perused the records. Even if we accept the argument of the learned counsel for the appellant that the second summons was not received, the fact remains that the appellant has not responded to the first summons issued on February 23, 2011. The only defence offered by him is that he was under the impression that summons has been wrongly addressed to him. This reason cannot be accepted. If the appellant was of the view that the summons was wrongly addressed to him he should have replied to the Board accordingly. Non-compliance to summons is violation of the provisions of law and entails penalty. Even if the appellant had no information to furnish, he should have said so and responded to the summons. However, in the peculiar facts and circumstances of the case, we are of the view that ends of justice would be met by reducing the penalty to ` 3 lakhs. We order accordingly. The appeal stands disposed of with no order as to costs. Sd/- P.K. Malhotra Member & Presiding Officer (Offg.) Sd/- Jog Singh Member 21.02.2013 Prepared and compared by: