Professional Documents
Culture Documents
FOR
HOLDING
INQUIRY
AND
IMPOSING
PENALTIES
BY
BACKGROUND:
1. Securities and Exchange Board of India (hereinafter referred to as SEBI) received a
complaint from Ms Lalita Verma, Hisar, Haryana regarding non-receipt of duplicate
share certificate against M/s Phyto Chem (India) Limited (hereinafter referred to as
Noticee or the Company). As per the data available in the SEBI Complaints
Redress System (hereinafter referred to as SCORES), the said complaint was
shown as pending to be resolved against the Noticee. SEBI had forwarded the
complaint to the Noticee with instructions to redress the grievance vide letters dated
April 20, 2012 and June 12, 2012. However, it is alleged that the Noticee has failed
to redress the grievance of Ms Lalita Verma and submit an Action Taken Report in
this regard, which was required as per the procedure laid down in the SCORES
system. The complaint of Ms Lalita Verma regarding non-receipt of duplicate share
certificate for 100 shares was therefore shown as pending to be resolved against the
Noticee in the SCORES.
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The Registrar and Share Transfer Agent (hereinafter referred as R & T agent)
of the Noticee Company viz. M/s Big Share Services Pvt. Ltd ( hereinafter
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The Noticee had also informed SEBI about the steps taken by their R & T agent
in this regard, vide their letters dated 2/4/2012, 21/5/2012 and 20/6/2012 and
enclosed a copy of these letters. The status of the grievance of the complainant
was also mentioned in these letters that were sent to SEBI by the Noticee.
The Noticee mentioned that they have taken prompt steps to redress the
grievance of the complainant by repeatedly writing to her and requesting her to
submit the mandatory documents to enable them to process her request for
issuing the duplicate share certificate in her name. However, the Noticee
mentioned that the complainant failed to respond to the letters issued to her by
their R & T agent.
The Noticee mentioned that they have also uploaded the Action Taken Report
(ATR) in the SCORES on 17/8/2012 clearly depicting the status of the complaint
in the ATR as information provided to the complainant. The Noticee mentioned
that they have also made a request in the ATR for the complaint of Ms Lalita
Verma to be treated as closed in view of the fact that she was not responding to
the letters sent to her by Big Share seeking certain documents from her to
process her grievance.
The Noticee mentioned in their reply that SEBI did not take cognizance of the
status of the complaint mentioned in the ATR and apparently had also not
considered the repeated efforts made by their R & T agent to obtain the relevant
documents from the complainant in this regard.
It was mentioned by the Noticee that the complainant was communicating with
their earlier R & T agent viz. M/s Jupiter Technologies, whose services as R &T
were stopped by the Noticee w.e.f 2002-03 and during the same period M/s Big
Share was appointed as their R &T agent. Therefore, the Noticee stated in their
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reply that the communication between M/s Jupiter Technologies and the
complainant through exchange of letters were not known to them.
Vide letter ref PCIL/SEBI/0707/2012-13 dated December 22, 2012, the Noticee
informed SEBI that after continuous follow up/correspondence made with the
Complainant
by
documents for the issue of duplicate share certificate viz. affidavit, address proof
and indemnity bond etc on 3/12/2012. In pursuance, it was mentioned by the
Noticee that duplicate share certificate for 100 shares was issued in the name of
the complainant vide Duplicate Certificate Number 43300 and the same was also
dispatched by Big Share to the complainants address by Registered post on
17/12/2012.
5. 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 May 2, 2012. Mr Y. Nayudamma, the Managing Director (MD) of the
Noticee Company, appeared on the said date for the hearing.
During the course of the personal hearing, the MD reiterated the submissions made by
the Noticee in their earlier letters dated 8/11/2012 and 22/12/2012. Pursuant to the
personal hearing, the Noticee vide letter dated May 10, 2013 made further submissions
in the matter and stated the following:
The change of the R & T agent from M/s Jupitor Technologies to M/s Big Share
Services Pvt. Ltd took place w.e.f 01/02/2003.
The physical share transfer w.r.t the 100 shares in the name of Ms Lalita Verma
was processed by their earlier R & T agent viz. Jupitor Technologies and the
Transfer Records examined in this regard suggested that the physical share
transfer in the name of Ms Lalita Verma was effected on 29.06.2002. Thereafter,
the share certificate was dispatched to the address of Ms Lalita Verma by M/s
Jupitor Technologies sometime during the year 2002, which apparently was not
received by Ms Lalita Verma.
Ms Lalita Verma had therefore lodged a complaint in this regard and continued
communicating with M/s Jupitor Technologies, who were no longer associated
with the Noticee as R & T agent. The Noticee also mentioned that they were not
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The Noticee mentioned that as soon as they received the complaint from Ms
Lalita Verma, they took immediate steps through M/s Big Share to resolve the
matter. Big Share wrote to Ms Lalita Verma on 28.3.2012, 18.05.2012 and
18.06.2012 enlisting the procedures /documents that were required to be
submitted by her to enable the Noticee to process and issue the duplicate share
certificate in her name.
6. I have taken into consideration the facts and circumstances of the case, the material
available on record and also the submissions made before me by the MD of the
Noticee during the course of personal hearing held on May 2nd 2013.
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8. I observe that the related documents like the Indemnity bond and Affidavit were
submitted by the Complainant only on 03.12.2012 after repeated follow up made by
Big Share with Ms. Lalita Verma. Thereafter, the Noticee took immediate steps to
issue the duplicate share certificate in the name of Ms Lalita Verma on 17.12.2012,
which was also dispatched to her address on the same date. Therefore, from the
aforementioned facts and circumstances, I observe that the Noticee cannot be
faulted for the delay on the part of the complainant in submitting the documents that
were sought from her by the Noticee to process the complaint.
9. Thus, in light of the above observations, the allegation that the Noticee failed to
redress the investor grievance of Ms Lalita Verma is not tenable. I am therefore of
the opinion that it would be inappropriate to impose any penalty on the Noticee.
ORDER
10. In view of the foregoing, considering the facts and circumstances of the case and
material available on record, the alleged violation of the provisions of Section 15 C of
the SEBI Act by the Noticee do not stand established and the matter is accordingly
disposed of.
11. In terms of Rule 6 of the Adjudication Rules, copies of this order are sent to the
Noticee and also to the Securities and Exchange Board of India.
Suresh B Menon
Place: Chennai
Adjudicating Officer
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