Adjudication Order in respect of M/s Omnitech Infosolutions Ltd

UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH RULE 5 OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES, 1995 Adjudication Order in respect of:- M/s Omnitech Infosolutions Ltd (PAN Not Available) A/13, Cross Road No.5, Kondivita Road, MIDC, Marol, Andheri (East), Mumbai 400093 In the matter of Non-redressal of investor grievance(s) FACTS OF THE CASE

1. Securities and Exchange Board of India (hereinafter referred to as "SEBI") came out with a Circular dated December 18, 2014 (SEBI circular no. CIR/OIAE/1/2014) dealing with the processing of investor complaints against listed companies through SEBI Complaints Redress System (hereinafter referred to as "SCORES"). The said Circular has inter alia stipulated the following:- Clause 12: A complaint shall be treated as resolved/disposed/closed only when SEBI disposes/closes the complaint in SCORES. Hence, mere filing of ATR by a listed company or SEBI registered intermediary with respect to a complaint will not mean that the complaint is not pending against them. Clause 13: Failure by listed companies and SEBI registered intermediaries to file ATR under SCORES within thirty days of date of receipt of the grievance shall not only be treated as failure to furnish information to SEBI but shall also be deemed to constitute non- redressal of investor grievance. Adjudication Order in respect of M/s Omnitech Infosolutions Ltd Page 2 of 5

2. It is observed that M/s Omnitech Infosolutions Ltd (hereinafter referred to as Noticee) has taken SCORES authentication. One investor complaint was pending against the Noticee as on March 25, 2015 and merely filed an ATR but failed to take appropriate steps for redressal of the investor complaints. Therefore Adjudication proceedings have been initiated against the Noticee for the alleged violations of SEBI circular no. CIR/OIAE/1/2014 dated December 18, 2014. APOINTMENT OF ADJUDICATING OFFICER

3. SEBI has, therefore, initiated adjudication proceedings against the Noticee and I have been appointed as the Adjudicating Officer vide order dated January 12, 2016 under Section 15C of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as 'SEBI Act') to inquire into the aforesaid alleged violations against the Noticee. SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

4. Show Cause Notice No. SEBI/HO/EAD/EAO/OW/P/2016/3085/1 dated February 04, 2016 (hereinafter referred to as SCN) was issued to the Noticee under rule 4(1) of the Rules to show cause as to why an inquiry should not be initiated and penalty be not imposed on the Noticee for the alleged violation specified in the SCN.

5. In response to the SCN, the Noticee filed its reply dated March 3, 2016. In the interest of natural justice and in order to conduct an inquiry in terms of rule 4(3) of the Rules, the Noticee was granted an opportunity of personal hearing on June 8, 2017 vide notice dated May 22, 2017. Noticee vide email dated June 1, 2017 informed that..

a) Omnitech InfoSolutions limited had gone into liquidation (Honorable Bombay High Court had passed winding up order against the company on 18th march, 2015) Hence as per the provisions of the Companies Act, the powers of manager of the company does not vest in the Board of Directors, but in Official liquidator appointed by Honorable Bombay High Court vide order dated 18th March, 2015.

b) In view of the above, Board of Directors have ceased to exist consequent of winding up of the company and hence while Adv Ajay Prajapati will appear, No official authorization can be given to him by erstwhile board of director to appear on behalf of the company as now all the powers of board can only be exercised by Official Liquidator.

6. Hearing on June 8, 2017 was attended by the authorized representatives (AR) of the Noticee namely Adv Ajay Prajapati, Mr. Gaurav Sharma and Shruti Somani. Authorised Adjudication Order in respect of M/s Omnitech Infosolutions Ltd Page 3 of 5 Representatives informed that noticee had gone into liquidation and we will appear on behalf of the noticee, however no official authorization has been given by erstwhile board of director to appear on behalf of the noticee as now all the powers of board can only be exercised by Official Liquidator. Further, we reiterate as submitted in our reply dated March 3, 2016 and submit additional submission i.e. summary of the matter and copy of Misc application no. 170 of 2016 filed for permission to operate accounts during the course of hearing.

7. The key submissions in reply of the Noticee dated March 3, 2016 towards the SCN, are being mentioned below; (a) The Company informed that there is only one complaint for non-receipt of dividend pending to be resolved and there is no other complaint pending to be resolved. While the company have taken necessary steps to redress the complaint and has taken the matter with the bank also. In the meantime winding up order was passed against the company in March 2015 and copy of winding up order is enclosed. Due to this unforeseen event, the entire process with respect to redressal of present complaint got substantially delayed. Kindly note that this delay was due to circumstances beyond the control of company. (b) In spite of the event as mentioned above, company have been following up with the bank to get the outstanding payment of dividend for the financial year 2011-12 made to the complainant (investor) asap. However, it will take some more time to get the said complaint closed, considering the legal and procedural hurdles.

8. After taking into account the allegations, submissions of the Noticee and evidences / material available on records, I hereby, proceed to decide the case on merit. CONSIDERATION OF ISSUES AND FINDINGS:-

9. The issues that arise for consideration in the present case are :

a) Whether the Noticee has violated the provisions of Section 15C of SEBI Act, 1992?

b) Whether the Noticee is liable for monetary penalty under Section 15C of the SEBI Act, 1992?

c) What quantum of monetary penalty should be imposed on the Noticee taking into consideration the factors mentioned in Section 15J of the SEBI Act, 1992?

10. I have persused the available records and replies of the Noticee in respect of the allegations alleged in the SCN. I find from the documents available on records that the Honble Bombay High Court, had passed an order of liquidation against the Noticee dated March 18, 2015 made in Company Petition No. 499 of 2014 and the Official Liquidator, of High Court, Bombay, be appointed as Liquidator of the said Company. Adjudication Order in respect of M/s Omnitech Infosolutions Ltd Page 4 of 5

11. I have carefully perused the documents available on record and liquidation order dated March 18, 2015 against the Noticee. I am of the view that before proceeding in the matter on its merit, it would be in the fitness of the thing to first decide the preliminary issue as to whether the adjudication proceedings initiated by SEBI against the Noticee would continue.

12. In order to examine the maintainability of the present adjudication proceedings against the Noticee, it will be appropriate to refer to Section 446 of the Companies Act, 1956, which reads as under: "Section 446 of the Companies Act, 1956 (1) When a winding up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, against the company except by leave of the Tribunal and subject to such terms as the Tribunal may impose. (2) Tribunal shall, notwithstanding anything, contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of-

a) Any suit or proceeding by or against the company;

b) Any claim made by or against the company (including claims by or against any of its branches in India);

c) Any application made under Section 391 by or in respect of the company;

d) Any question of priorities or any other question whatsoever, whether of law or fact, which may relate to rise in course of the winding up of the company. whether such suit or proceeding has been instituted or is instituted or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding up of the company, or before or after the commencement of the Companies (Amendment) Act, 1960 (65 of 1960) (3) (Omitted) (4) Nothing in sub-section (1) or sub-section (3) shall apply to any proceeding pending in appeal before the Supreme Court or a High Court.

13. According to Blacks Law Dictionary, Sixth Edition, the term Legal Proceedings includes all proceedings authorized or sanctioned by law, and brought or instituted in a court or legal tribunal, for the acquiring of a right or the enforcement of remedy. Further, the term Proceedings means, any action, hearing, investigation, inquest or inquiry (whether Adjudication Order in respect of M/s Omnitech Infosolutions Ltd Page 5 of 5 conducted by a court, administrative agency, hearing officer, arbitrator, legislative body, or any other person authorized by law) in which, pursuant to law, testimony can be compelled to be given. (ibid).

14. Section 446 is wide in its terms and is not restricted to any category of suits or any class of Plaintiffs. It is wide enough to cover all suits and other legal proceedings whoever may be the plaintiff. {Sri Murugan Oil Industries (P.) Ltd.Re, (1970) 40 Com. Cases 77, 82 (Mad) following Ghouse Khan v Bala Subha Rowthar, AIR 1927Mad 925}.

15. I note that the Adjudication Proceedings have been initiated on March 31, 2015 i.e. after the High Court has passed an order dated March 18, 2015 for winding up of the Noticee. In the light of the same, I am of the view that the present adjudication proceedings against the Noticee are covered under the provisions of Section 446 of the Companies Act, 1956. Once the High Court has passed an order for winding up of the Noticee, it is not right to continue proceeding against the Noticee. ORDER

16. In view of my findings noted in the preceding paragraphs, I am of the view that the adjudication proceedings initiated against Noticee / M/s Omnitech Infosolutions Ltd vide SCN dated February 4, 2016 cannot be proceeded with. The matter is, accordingly, disposed of.

17. In terms of rule 6 of the Adjudication Rules, copies of this order is being sent to the Noticee and also to the SEBI. DATE: JUNE 16, 2017 PLACE: MUMBAI RACHNA ANAND ADJUDICATING OFFICER