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BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA
(ADJUDICATION ORDER NO: EAD-3/AO/DRK/JP/OIAE/ 586/130 of 2014)
______________________________________________________________
UNDER SECTION 15 - I OF THE SECURITIES AND EXCHANGE BOARD OF
INDIA ACT, 1992 READ WITH RULE 5 OF THE SECURITIES AND EXCHANGE
BOARD OF INDIA (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING
PENALTIES BY ADJUDICATING OFFICER) RULES, 1995.
In respect of:
Eco Recycling Ltd.

Regd. Office at: 205, Centre Point, 2nd Floor,
Adj. to Hotel Kohinoor Continental,
Andheri - Kurla Road, J. B. Nagar,
Andheri (E) Mumbai- 400 059

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Background:
1. Securities and Exchange Board of India (hereinafter referred to as SEBI)
observed that Eco Recycling Ltd. (hereinafter referred to as 'the Noticee / the
Company") had neither obtained the SEBI Complaints Redressal System
(SCORES) authentication nor redressed the grievance of investor.
Appointment of Adjudicating Officer:
2. Undersigned was appointed as Adjudicating Officer under section 15-I of the
Securities and Exchange Board of India Act 1992 (hereinafter known as 'SEBI
Act') read with Rule 3 of the SEBI (Procedure for Holding Inquiry and Imposing
Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as
Adjudication Rules) vide communiqu dated May 21, 2013, to inquire into and
adjudge under Section 15 A (a) and 15 C of the SEBI Act, the alleged violations
by the Company.
Show Cause Notice, Reply and Personal Hearing:
3. A Show Cause Notice No. A&E/EAD-3/DRK-VVK/18942/2013 dated July 30,
2013 (hereinafter referred to as SCN) was issued to the Noticee under Rule 4
(1) of the Adjudication Rules, to show cause as to why an inquiry be not held
against the Noticee and penalty be not imposed under section 15 A (a) and 15 C
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of the SEBI Act, for the alleged violations of non redressal of investor grievance
and non obtaining of SCORES authentication. The allegations against the
Noticee as levelled in the SCN, are produced hereunder;
a. Vide letter dated January 22, 2013, SEBI advised the Noticee to furnish the
authentication details for implementation of SCORES within 7 days from the
date of receipt of the letter to enable the Company to view and resolve the
investor grievances in SCORES, failing which SEBI may initiate appropriate
actions. Under the said letter, reference of SEBI Circular No. CIR/OIAE/2/2011
dated June 03, 2011 and SEBI Circular No. CIR/OIAE/1/2012 dated August
13, 2012 was given requiring all the companies which are listed on any Stock
Exchange to view the complaints pending against them and submit Action
Taken Report (ATR) electronically in SCORES.
b. SEBI vide letter dated February 15, 2013 reminded the Noticee to redress the
grievances of investor and submit the Action Taken Report (ATR) through
SCORES.
c. SCN stated that vide letter dated February 15, 2013, the Noticee was asked to
resolve the pending complaints at the earliest. However, allegedly, the Noticee
had failed to resolve the grievances of the complainant, failed to reply to the
aforesaid letters of SEBI dated January 22, 2013 & February 15, 2013, failed
to obtain the SCORES authentication and also failed to submit the ATR as
required.
d. Vide Circular No. CIR/OIAE/1/2013 dated April 17, 2013, SEBI advised the
companies to obtain SCORES authentication within one month from the date
of the said Circular, however, as on May 24, 2013, the Noticee had not
approached SEBI for the authentication.
e. It was stated in the SCN that as on May 24, 2013, one investor grievance /
complaint of Mr. Raj Kumar Sur (complainant / investor) was pending against
the Noticee in SCORES for 'non receipt of shares after conversion /
endorsement / consolidation / splitting' which was pending for more than two
years.
f. In view of the above, it was alleged that the Noticee had failed to obtain the
SCORES authentication / furnish ATR and failed to resolve one investor
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grievances, which are in violation of Section 15A (a) and 15C of the SEBI Act.
The provisions of Section 15A(a) and 15C of the SEBI Act are produced
hereunder;
Penalty for failure to furnish information, return, etc.

15A. If any person, who is required under this Act or any rules or regulations made
thereunder,
(a) to furnish any document, return or report to the Board, fails to furnish the same, he
shall be liable to a penalty of one lakh rupees for each day during which such failure
continues or one crore rupees, whichever is less;

Penalty for failure to redress investors grievances.

15C. If any listed company or any person who is registered as an intermediary, after
having been called upon by the Board in writing, to redress the grievances of
investors, fails to redress such grievances within the time specified by the Board, such
company or intermediary shall be liable to a penalty of one lakh rupees for each day
during which such failure continues or one crore rupees, whichever is less.


4. The said SCN was served upon the Noticee on August 02, 2013 through hand
delivery. In respect of SCN, the Noticee filed reply dated August 17, 2013 and
also desired an opportunity of personal hearing. Thereafter, for the purpose of
inquiry and as requested by the Noticee, an opportunity of hearing was granted
to the Noticee on September 10, 2013 vide notice dated August 23, 2013 which
was duly served upon the Noticee through hand delivery on August 26, 2013. In
respect to said notice of hearing, the Noticee vide letter dated August 30, 2013
confirmed its appearance and authorized Mr. Saurabh Shah, Ms. Gopika Shah,
Ms. Dhara Modi, Mr. Siddharth Doshi, Ms. Jhanvi Shah from the Pramod S.
Shah & Associates, Practicing Company Secretaries.
5. Hearing on September 10, 2013 was attended by the authorised representative
of the Noticee namely- Ms. Anita Choudhary (Compliance Officer of Noticee),
Ms. Dhara Alpesh Modi and Ms. Jhanvi Pankaj Shah (the Practicing Company
Secretaries from the Pramod S. Shah & Associates) and the submissions made
by them were recorded. During the hearing, the Authorised Representative inter-
alia assured to submit within a week the proof of delivery of letters /
correspondence sent to the complainant and also to take effective steps to
deliver the letters to complainant. Thereafter, vide letter dated September 19,
2013, Pramod S. Shah & Associates forwarded details of several
communications viz. communications of Bigshare Services Pvt. Ltd. (RTA) dated
August 02, 2013 to the investor, Noticee's communication dated September 16,
2013 to the investor along with dispatch/delivery proof and the investor's letter
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dated September 07, 2013 to Bigshare Services Pvt. Ltd. (RTA). Certain
clarifications were also sought from the concerned department of SEBI on the
reply/submission of the Noticee.
6. Now, I am proceeding to decide the case taking into account the Noticees
aforesaid reply / submissions and the material available on records. The
reply/submissions made by the Noticee are mentioned below;
(a) One investor complaint is for non-receipt of shares after conversion (issuance of
duplicate share certificate) and the same is pending for certain documents viz. Indemnity
Bond/ Affidavit to that effect to be received from the complainant (investor).

(b) We have uploaded the Action Taken Report on SCORES website. Investor had been
requested vide our letter dated 27/04/2012 to send us the indemnity bond and affidavit to
enable us to issue the new share certificates.

(c) We have already informed the investor about the procedure for issue of duplicate share
certificates vide our letter dated 11/01/2013. We have informed the investor vide our
letter dated 27/02/2013 that the name of company had been changed and to check
certificate at his end.

(d) We have already given 3 reminder to investor and investor has not given any response
till date. On 06/08/2013 we had been advised to send 2 reminders with a gap of 15 days
each. We have already given three reminders to investor.


Consideration of Case and Findings:
7. In respect to the allegations of non activation of SCORES authentication, the
Noticee submitted that it has obtained SCORES authentication and uploaded the
ATR. It is also confirmed by the concerned department of SEBI that the Noticee
had obtained SCORES authentication on August 25, 2011. From aforesaid
material available on records, it appears that SCORES authentication / activation
was obtained by the Noticee in pursuance of SEBI Circular No. CIR/OIAE/2/2011
dated June 03, 2011 and same was so obtained before the issuance of another
SEBI Circular dated August 13, 2012 and Circular dated April 17, 2013.
Needless to say that said authentication was obtained well before issuance of
the SCN. In view of the above activation of SCORES authentication by the
Noticee, the allegation against the Noticee that it had failed to obtain the
SCORES authentication does not stand established.
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8. In respect to the allegations of non - redressal of 1 investor grievance of Mr. Raj
Kumar Sur (Complainant) for 'non receipt of shares after conversion /
endorsement / consolidation / splitting', the Noticee submitted that Investor had
been requested vide letter dated April 27, 2012 to send indemnity bond and
affidavit to enable to issue the new share certificates. The Noticee submitted that
procedure for issue of duplicate share certificates was intimated to investor vide
its letter dated January 11, 2013. The Noticee also submitted that several
reminders were given to investor but he had not responded.

9. It is observed from the records that in respect of letter of Bigshare Services Pvt.
Ltd. (RTA) dated August 02, 2013, the said complainant vide letter dated
September 07, 2013 confirmed that he does not have the physical shares
certificate of 200 shares of Company (Noticee) and asked the said RTA to
intimate about the formalities in applying for duplicate share certificates. It is
noted that besides the efforts taken by the Noticee to resolve the complaint
before issuance of the SCN, it has also taken some efforts during the course of
instant proceedings as vide letter dated September 16, 2013, it had advised the
complainant to forward certain documents i.e. indemnity bonds/affidavits & other
necessary documents. Vide said letter, the Notice also attached the formats of
such indemnity bonds and affidavit. In support of the same the Noticee submitted
registered post dispatch proof.

10. However, the fact cannot be ignored that the complaint was originally made on
July 01, 2007 and same was forwarded to the Noticee on October 04, 2007 for
redressal (as shown in copy of ATR submitted by SEBI) but, the Noticee took
steps for redressal of said complaint only on May 12, 2011 as only on that day
Bigshare Services Pvt. Ltd / RTA has sent letter to the complainant which is
enclosed as Annexure A of the Noticee's reply dated August 17, 2013. In said
letter of RTA, it is clearly mentioned that the matter/complaint was 4 year old.
Further, the ATR in respect of such redressal of complaint was submitted by the
Noticee on SCORES only from May 04, 2012 onwards. No proof of any steps
taken by the Noticee to redress the grievance of complainant before May 2011
has been provided during the instant proceeding.

11. From the above observations, it is clear that there was delay of around 4 years in
taking any steps by the Noticee to redress the grievance of complainant. Such
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huge delay by the Noticee in taking any steps in resolving the grievance of
complainant despite being called upon by SEBI to redress the same, is certainly
in violation of section 15 C of the SEBI Act.

12. Besides above delay, it is also noted from the ATR that on May 15, 2012, SEBI
asked the Noticee to send two reminders within a gap of 15 days between
dispatches. In respect of said direction of SEBI, the Noticee submitted ATR only
on January 14, 2013 i.e. delay of around 8 months. It is also noted that the
Noticee had failed to respond to the SEBI's aforesaid communiqu dated
January 22, 2013 and February 15, 2013.

13. In view of aforesaid observations, I am of the opinion that the Noticee had
violated Section 15 C of the SEBI Act.

14. For determining the quantum of penalty under Section 15 C of the SEBI Act, the
factors stipulated in section 15 J of the SEBI Act, have been taken into
consideration.
15J - Factors to be taken into account by the adjudicating officer
While adjudging quantum of penalty under section 15-I, the adjudicating officer shall
have due regard to the following factors, namely:-
(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable,
made as a result of the default;
(b) the amount of loss caused to an investor or group of investors as a result of the
default;
(c) the repetitive nature of the default.
Order:
15. In view of the above, after considering all the facts and circumstances of the
case and exercising the powers conferred upon me under Section 15 I of the
SEBI Act and Rule 5 of the Adjudication Rules, I hereby impose a penalty of `
1,00,000/- (Rupees One Lakh only) upon the Noticee under the provisions of
Section 15C of the SEBI Act. I am of the view that the said penalty is
commensurate with the aforesaid failure committed by the Noticee (Eco
Recycling Ltd.)
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16. The Noticee shall pay the said amount of penalty by way of demand draft in
favour of SEBI - Penalties Remittable to Government of India, payable at
Mumbai, within 45 days of receipt of this order. The Demand Draft shall be
forwarded to the Chief General Manager (OIAE), Securities and Exchange Board
of India, SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra
(East), Mumbai 400 051.
17. Copy of this order is being sent to the Noticee Eco Recycling Ltd. and also to the
Securities and Exchange Board of India, in terms of Rule 6 of the Adjudication
Rules.


Date: September 10, 2014 D. RAVI KUMAR
Place: Mumbai CHIEF GENERAL MANAGER &
ADJUDICATING OFFICER
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