BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

ADJUDICATION ORDER NO. JJ/AM/AO10/2015

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:
M/s. Krishna Continental Ltd.
(PAN AAACK5682K)
In the Matter of: Krishna Continental Ltd.
_____________________________________________________________________________________________
BACKGROUND
1. Securities and Exchange Board of India (SEBI) came out with a Circular
dated June 03, 2011 dealing with the processing of investor complaints
against listed companies through SEBI Complaints Redress System
(SCORES). In terms of said Circular, all listed companies were inter alia
required to view the complaints pending against them, redress them and
submit Action Taken Reports (ATRs) electronically in SCORES. As the
SCORES is online electronic system, therefore, for the purposes of
accessing the complaints of the investors against them, as uploaded in the
SCORES, listed companies were required to login to SCORES system
electronically through a company specific user id and password, to be
provided by SEBI. For the purpose of generating said user id and
password, listed companies which were yet to obtain SCORES user id and
password, were required to submit the details for authentication to SEBI,
in the format annexed to the said Circular. However, it was observed that
Krishna Continental Limited (Noticee) did not submit the details to SEBI
which were required to be furnished in terms of the said Circular.
2. In order to further remind the Noticee about the compliance with the
requirements as laid down in the SEBI Circular dated June 03, 2011,
letters dated November 15, 2011 and January 18, 2012 was sent to the
Noticee informing about the commencement of processing of investor
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complaints in a centralized web based complaints redress system

SCORES in terms of the Circular and advising the Noticee to send the
information (i.e. details for authentication) as required in the Circular, at
the earliest.
3. As observed from the contents of the Circular, SCORES introduced
electronic dealing of the complaints of the investors, by the respective
companies. Thus, once a complaint against a company was uploaded by
SEBI in the SCORES, it amounted to calling upon by SEBI to such company
to redress the investor grievance. Accordingly, it was incumbent upon
such company to redress the investor complaint. It was observed that one
investor complaint was pending against the Noticee as on August 27,
2012. However, it was alleged that the Noticee failed to redress pending
investor grievance and also failed to obtain SCORES authentication in
spite of being called upon by SEBI to do so thereby violating the
provisions of Section 15C of the SEBI Act, 1992.
4. Shri Praveen Trivedi was appointed as the Adjudicating Officer to inquire
and adjudge under Section 15C of the SEBI Act, 1992, the alleged
violations committed by the Noticee. Pursuant to the transfer of Shri
Praveen Trivedi, the undersigned was appointed as Adjudicating Officer
vide Order dated December 18, 2013.
SHOW CAUSE NOTICE, HEARING & REPLY
5. Show Cause Notice (SCN) in terms of the provisions of Rule 4(1) of SEBI
(Procedure for Holding Inquiry and Imposing Penalties by Adjudicating
Officer) Rules, 1995 (Adjudication Rules) was issued to the Noticee on
September 17, 2013, calling upon the Noticee to show cause why an
inquiry should not be held against it under Rule 4(3) of the Adjudication
Rules read with Section 15I of the SEBI Act, 1992 for the alleged
violations.
6. The aforesaid SCN was duly delivered to the Noticee through the
Department of Post. However, the Noticee did not submit any reply to the
SCN. Subsequent to the appointment of the undersigned, vide Notice
dated December 09, 2014 the Noticee was given an opportunity of
personal hearing on January 06, 2015 and a copy of the SCN was also
enclosed with the Notice dated December 09, 2014. The said Notice dated
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December 09, 2014 was duly delivered to the Noticee through the
Northern Regional Office (NRO) of SEBI. On the scheduled date of personal
hearing, Shri Praveen Nayak, Practicing Company Secretary, appeared as
Authorised Representative (AR) of the Noticee and made the following
submissions:
The complaint mentioned in the Show Cause Notice was relating to Nonreceipt of Dividends and we had not declared any dividend. The same was
informed to Ms. Sarika Kataria, AGM, SEBI and also to the investor. The
relevant documents and emails are being submitted during the course of
hearing.
Yes, we have taken SCORES authentication w.e.f. January 01, 2013 and as on
date there is no pending complaint.

ISSUES FOR CONSIDERATION

7. After perusal of the material available on record, I have the following
issues for consideration, viz.,
A. Whether the Noticee has failed to resolve investor grievances?
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?
FINDINGS
8. On perusal of the material available on record and giving regard to the
facts and circumstances of the case, I record my findings hereunder.
ISSUE 1: Whether the Noticee has failed to resolve investor
grievances?
9. As already observed, SEBI introduced an online electronic system for
resolution of investor grievances, i.e., SCORES in 2011. For the purposes
of accessing the complaints of the investors against them, as uploaded in
the SCORES, listed companies were required to login to SCORES system
electronically through a company specific user id and password, to be
provided by SEBI. Further, vide letters dated November 15, 2011 and
January 18, 2012 the Noticee was informed about the commencement of
SCORES and the Noticee was advised to send the details for
authentication as required in the Circular. In this regard, the Noticee has
submitted that it had taken SCORES authentication in January 2013.
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Regarding the one pending investor complaint which was relating to nonreceipt of dividend, as mentioned in the SCN, the Noticee stated that it
had not declared any dividend and had furnished the necessary reply to
the investor in June 2013. Subsequently, SEBI has confirmed that the
Noticee had obtained SCORES authentication on February 05, 2013 and
had resolved the pending investor grievance (as mentioned in the SCN)
on June 14, 2013.
10. Since, the Noticee had obtained SCORES authentication and had taken
necessary steps of resolving the pending investor grievance before the
issuance of SCN; I hold that the allegation of not resolving investor
grievances, as alleged in the SCN, does not stand established.
ISSUE 2: Whether the Noticee is liable for monetary penalty under
Section 15C of the SEBI Act, 1992?
11. The provisions of Section 15C of the SEBI Act, 1992, read as under:
15C Penalty for failure to redress investors' grievances: 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.
12. Since the allegation against the Noticee of not resolving the investor
grievance pending against it has not been established; therefore, the
Noticee is not liable for monetary penalty under Section 15C of the SEBI
Act, 1992.
ISSUE 3: 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?
13. Since, the Noticee is not liable for monetary penalty in the instant matter,
this issue deserves no consideration.

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ORDER
14. In view of my findings noted in the preceding paragraphs, I hereby
dispose of the Adjudication Proceedings initiated against the Noticee vide
Show Cause Notice dated September 17, 2013.
15. In terms of the provisions of Rule 6 of the SEBI (Procedure for Holding
Inquiry and Imposing Penalties by Adjudicating Officer) Rules 1995,
copies of this Order are being sent to the Noticee and also to Securities
and Exchange Board of India.

Date: January 30, 2015

Place: Mumbai

Jayanta Jash
Adjudicating Officer

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January 30, 2015