BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

[ADJUDICATION ORDER NO.SM/AO16/2014]

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.

In respect of Wellington Commercial Limited

(PAN AAACW2360E)
In the matter of SCORES

FACTS OF THE CASE IN BRIEF

1. Securities and Exchange Board of India (hereinafter referred to as SEBI) vide
Circular No. CIR/OIAE/1/2013 dated April 17, 2013 had directed all listed companies
to obtain SEBI Complaints Redressal System (SCORES) authentication within the
stipulated time period and also redress the pending investor grievances within the
stipulated time period.

2. SEBI observed that certain companies including Wellington Commercial Limited

(hereinafter referred to as 'the Noticee/the Company') had failed to obtain the
SCORES authentication and therefore, had failed to comply with the aforesaid SEBI
Circular.
3. Thereafter, vide letter dated December 02, 2013, the aforesaid companies, including
the Noticee, were again advised to submit the requisite information regarding
SCORES authentication by December 18, 2013. However, the Noticee once again
failed to comply with the SEBI directive.

_______________________________________________________________________________________
In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO16/2014 dated December 02, 2014
Adjudication Order in the matter of Wellington Commercial Limited.
Page 1 of 5
Brought to you by http://StockViz.biz

4. Based on the aforesaid observations, it was alleged that by failing to obtain SCORES
authentication

the

Noticee

has

violated

the

aforesaid

SEBI

Circular

No.

CIR/OIAE/1/2013 dated April 17, 2013. The alleged violation, if established, makes
the Noticee liable for monetary penalty under Section 15HB of the Securities and
Exchange Board of India Act, 1992 (hereinafter known as 'SEBI Act').
APPOINTMENT OF ADJUDICATING OFFICER
5. The undersigned was appointed as Adjudicating Officer under section 15-I of SEBI
Act and rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by
Adjudicating Officer) Rules, 1995 (hereinafter referred to as Rules) to enquire into
and adjudicate under section 15HB of SEBI Act for the alleged violation by the
Noticee.
SHOW CAUSE NOTICE, REPLY OF NOTICEE AND PERSONAL HEARING
6. A Show Cause Notice No. SEBI/ERO/SM/ADJ/119/M-5188/2014 dated May 27, 2014
(herein after referred to as SCN) was issued to the Noticee under rule 4 of the Rules
to show cause as to why an inquiry be not held against them in terms of rule 4 of the
Rules read with section 15-I of SEBI Act and penalty be not imposed under Section
15HB of SEBI Act for the violations alleged to have been committed by the Noticee.
The copies of the documents relied upon in the SCN were provided to the Noticee
along with the SCN.
7. The Noticee submitted their reply to the SCN vide letter dated June 10, 2014.
Thereafter, the Noticee was granted an opportunity of personal hearing on August 29,
2014. Shri Jagannath Kar, the Authorized Representative (AR) of the Noticee
appeared for the hearing, and made submissions on behalf of the Noticee, reiterating
their earlier written submissions.
8. The submissions made by the Noticee are summarized below:

The Noticee stated that the SCORES Authentication was not obtained by the
erstwhile management.

_______________________________________________________________________________________
In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO16/2014 dated December 02, 2014
Adjudication Order in the matter of Wellington Commercial Limited.
Page 2 of 5
Brought to you by http://StockViz.biz


The present management of the Noticee has applied for SCORES

Authentication on May 03, 2014 and had obtained SCORES Authentication on
May 09, 2014.

The Noticee is an NBFC and the shares are listed on the CSE.

CONSIDERATION OF ISSUES AND FINDINGS

9. I have examined the SCN, the reply and the submissions of the Noticee, and other
information and documents available on record.
10. The issues that arise for consideration in the present case are :
a) Whether the Noticee by failing to obtain SCORES authentication has failed to
comply with SEBI Circular No. CIR/OIAE/1/2013 dated April 17, 2013?
b) Does the violation, if any, on the part of the Noticee attract monetary penalty
under Section 15 HB of the SEBI Act?
c) If so, what would be the monetary penalty that can be imposed taking into
consideration the factors mentioned in Section 15J of the SEBI Act?
11. In the instant case, it is evident from the material available on record that the Noticee
had not complied with the SEBI Circular No. CIR/OIAE/1/2013 dated April 17, 2013.
The Noticee has failed to obtain the SCORES authentication within the stipulated time
period. I note that the Noticee has applied for SCORES authentication only on May 3,
2014 and has been granted the authentication May 9, 2014. In view of the foregoing,
the alleged violation of the provisions of the aforesaid SEBI Circulars by the Noticee
as specified in the SCN stands established.
12. I am of the view that the violation is clearly established against the Noticee since the
Noticee has accepted non-compliance on its part. A listed company is expected to
comply with the extant regulatory and statutory requirements. I find that in the instant
matter, the Noticee failed to exercise reasonable care and diligence in discharge of its
duty as a listed company and therefore is liable for penalty.

_______________________________________________________________________________________
In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO16/2014 dated December 02, 2014
Adjudication Order in the matter of Wellington Commercial Limited.
Page 3 of 5
Brought to you by http://StockViz.biz

13. The Honble Supreme Court of India in the matter of SEBI Vs. Shri Ram Mutual Fund
[2006] 68 SCL 216(SC) and (2006) 131 Comp. Cas. 591 (SC) held that
In our considered opinion, penalty is attracted as soon as the contravention of the statutory obligation as
contemplated by the Act and the Regulations is established and hence the intention of the parties committing
such violation becomes wholly irrelevant.
14. In view of the aforementioned violation, the Noticee is liable for monetary penalty
under Section 15HB of SEBI Act which reads as follows:

15HB.Penalty for contravention where no separate penalty has been provided.Whoever fails to comply with any provision of this Act, the rules or the regulations made or directions issued by
the Board thereunder for which no separate penalty has been provided, shall be liable to a penalty which may
extend to one crore rupees.
15. While determining the quantum of penalty under Section 15 HB of SEBI Act it is
important to consider the factors stipulated in Section 15J of SEBI Act which reads as
under:-

15JFactors 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.

16. It is difficult, in cases of such nature, to quantify the disproportionate gains or unfair
advantage enjoyed by an entity because of the default and also the magnitude of
consequent losses suffered by the investors. I note that there are no investor
complaints pending against the Noticee. In the absence of complete details, it is
difficult to quantify the quantum of penalty. However, the lack of due diligence
demonstrated by the Noticee is a risk to the securities market and thus loss to the
investors to that extent. I observe that default by the Noticee occurred on continuous
basis for more than five months.

_______________________________________________________________________________________
In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO16/2014 dated December 02, 2014
Adjudication Order in the matter of Wellington Commercial Limited.
Page 4 of 5
Brought to you by http://StockViz.biz

ORDER
17. After taking into consideration all the facts and circumstances of the case, I impose a
penalty of Rs.1,50,000/- (Rupees One Lakh and Fifty Thousand) only under Section
15 HB of the SEBI Act against the Noticee which will be commensurate with the
violations committed by it.
18. 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 said demand draft should be forwarded to the
Regional Director, SEBI Eastern Regional Office, 16, Camac Street, 3rd. Floor, Unit
301, Kolkata 700017.
19. In terms of Rule 6 of the Rules, copy of this order is sent to the Noticee and to the
Securities and Exchange Board of India.

Date: December 02, 2014

Place: Kolkata

SOMA MAJUMDER
ADJUDICATING OFFICER

_______________________________________________________________________________________
In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO16/2014 dated December 02, 2014
Adjudication Order in the matter of Wellington Commercial Limited.
Page 5 of 5
Brought to you by http://StockViz.biz