BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

ADJUDICATION ORDER NO. JJ/AK/AO32/2015

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 Shivalik Loha Mills Limited
(PAN Not Available)
In the Matter of M/s Shivalik Loha Mills Limited
_____________________________________________________________________________________________
BACKGROUND
1. Securities and Exchange Board of India (hereinafter referred to as "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 (hereinafter referred to as "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
(hereinafter referred to as "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 M/s Shivalik Loha Mills Limited (hereinafter

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Adjudication Order in respect of M/s Shivalik Loha Mills Limited

February 27, 2015

referred to as "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, letter
dated April 16, 2012 were sent to the Noticee informing about the
commencement of processing of investor 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 three investor complaint was
pending against the Noticee as on August 27, 2012. However, it was alleged
that the Noticee failed to redress pending investor grievances 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 (hereinafter referred to as "Adjudication Rules") was

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Adjudication Order in respect of M/s Shivalik Loha Mills Limited

February 27, 2015

issued to the Noticee on August 13, 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. I find from the records that the aforesaid SCN was sent at the last known
address of the Noticee at "101, Anarkali Complex, The Mall, Ludhiana Punjab 141001". However, it is observed that the Noticee did not submitted its reply
to the aforesaid SCN.

7. Subsequent to the appointment of the undersigned, in the interest of natural

justice and in order to conduct an inquiry in terms of rule 4(3) of the
Adjudication Rules, the Noticee was granted an opportunity of personal
hearing on February 06, 2015, vide notice dated January 12, 2015 at SEBI,
Head Office, Mumbai. The said Notice of hearing dated January 12, 2015 along
with a copy of SCN dated August 13, 2013 was sent through hand delivery at
the aforesaid address of the Noticee via Chandigarh Local Office of SEBI, which
was returned undelivered. The copy of said Notice of hearing dated January
12, 2015 along with a copy of SCN dated August 13, 2013 was also sent
through Registered post with acknowledgement.

8. Noticee vide letter dated February 02, 2015 have submitted its reply in the
matter, which inter alia stated as under:
"..........
We hereby state that our company Shivalik Loha Mills Limited was
liquidated vide the ordered Dated 07.03.2014 by the Honorable Justice Sh.
Rajiv Naryan Raina, Punjab and Haryana High Court, Chandigarh vide
CP No. 148 of 2012...
The petition of liquidation is admitted. The official liquidator is appointed
as the provisional liquidator. The provisional liquidator is directed to take
charge of Movable and Immovable property of the Company Shivalik Loha
Mills Limited, Ludhiana.
Hence our company Shivalik Loha Mills Limited is now closed company
liquidated by Punjab and Haryana High Court, Chandigarh vide case no.
CP 148 of 2012 and the office order issued by the official liquidator by the
ministry of corporate affairs office of official liquidator attached to Punjab

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Adjudication Order in respect of M/s Shivalik Loha Mills Limited

February 27, 2015

and Haryana High Court, Chandigarh vide file no. 33 dated 28.05.2014.,
as per order.
Copy of order of the Punjab and Haryana High Court, Chandigarh for
Liquidation and copy of office order of the liquidator is attached herewith.
........"

9. It is observed that the Noticee have not appeared for hearing. I note that the
SCN and the Notice of Hearing has been duly served in terms of provisions of
Rule 7 of the Adjudication Rules. In view of the aforesaid steps taken, as per
rule 4(7) of the Adjudication Rules, if any person fails, neglects or refuses to
appear as required by sub-rule (3) before the Adjudicating Officer, he may
proceed with the inquiry in the absence of such person after recording the
reasons therefor. Despite having been given the opportunities, the Noticee
had failed to avail of the same.

ISSUES FOR CONSIDERATION

10. I find from the documents available on records that the Honble High Court of
Punjab & Haryana, had passed an order of liquidation against the Noticee
dated March 07, 2014 made in Company Petition No. 1 of 2013 and the Official
Liquidator attached to Punjab & Haryana High Court, Chandigarh became the
Liquidator of the said company .

11. I have carefully perused the documents available on record and liquidation
order dated March 07, 2014 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 in view of the order of
liquidation passed against the Noticee by the Honble High Court of Punjab &
Haryana, the adjudication proceedings initiated by SEBI against the Noticee
would continue.

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Adjudication Order in respect of M/s Shivalik Loha Mills Limited

February 27, 2015

12. In the light of the above and 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

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Adjudication Order in respect of M/s Shivalik Loha Mills Limited

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enforcement of remedy. Further, the term Proceedings means, any action,

hearing, investigation, inquest or inquiry (whether 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. In the light of the above, 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. Further, I note that there is no material
available on record to suggest that leave of the Tribunal has been taken when
the proceedings were pending at the date of the winding up order. Once the
High Court has passed an order for winding up of a company, it is not right to
continue proceeding against the company in absence of leave of the Tribunal.

16. In view of the foregoing, I am of the view that the adjudication proceedings
initiated against the Noticee vide show cause notice dated August 13, 2013
cannot be proceeded with. The matter is, accordingly, disposed of.
17. In terms of the provisions of Rule 6 of the Adjudication Rules, copies of this
Order are being sent to the Noticee and also to Securities and Exchange Board
of India.

Date: February 27, 2015

Place: Mumbai

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Jayanta Jash
Adjudicating Officer

Adjudication Order in respect of M/s Shivalik Loha Mills Limited

February 27, 2015