BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

ADJUDICATION ORDER NO. VKV/DL/AO-64/2015-16
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 Agarwal Duplex Board Mills Limited
(PAN- AAACA3230H)
NP-151-B, Maurya Enclave, Pitam Pura,
Delhi-110088
In the matter of:
M/s Agarwal Duplex Board 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

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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 Shri Agarwal Duplex Board Mills Limited (hereinafter
referred to as "Noticee/the Company") 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 February 22, 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 two investor
complaints were 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.

APPOINTMENT OF ADJUDICATING OFFICER

4.

In view of aforesaid, Mr. Vijayant Kumar Verma was appointed as Adjudicating Officer,
vide order dated September 05, 2013, under section 15-I of SEBI Act and rule 3 of SEBI
(Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules,

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1995 (hereinafter referred to as Adjudicating Rules) to enquire into and adjudge under
section 15C of SEBI Act, 1992 for the alleged violations committed by the Noticee.

5.

A Show Cause Notice (herein after referred to as SCN) was issued to the Noticee in
terms of the provisions of Rule 4(1) of SEBI (Procedure for Holding Inquiry and Imposing
Penalties by Adjudicating Officer) Rules, 1995 to show cause as to why an inquiry be not
held against it in terms of rule 4 of the Rules read with section 15I of SEBI Act, 1992 and
penalty be not imposed under section 15C of SEBI Act, 1992 for the violations alleged to
have been committed by the Noticee.
SHOW CAUSE NOTICE, REPLY AND HEARING

6.

I find from the records that the aforesaid SCN bearing No. NRO/AO/VKV/DT/805/2015
dated April 20, 2014 was sent at the registered office address of the Noticee at "27 B/9,
New Rohtak Road, New Delhi-110005 .The said SCN was through the Department of Post.

7.

Vide letter dated May 11, 2015 the Noticee had submitted its reply in the matter, which
inter alia stated as under:
".......
With reference to your above mentioned notice dated 20 April 2015 received by us
on 30 April 2015 regarding complaint filed by Mr. Pratik Rajendra Gandhi for nonreceipt of Share certificate (Registration No. SEBIE/DH12/0000051/1), this is to
inform you that the Company had delivered the Share Certificate to the
shareholder and said complaint stands redressed.

A Copy of the letter dated October 31, 2013 sent to Mr. Pratik Rajendra Gandhi
Gandhi to SEBI to the effect that he withdraws his complaint is attached herewith
for your reference. Further, the Company has also filed its reply on its SCORES ID.

On the basis of above submission, we humbly request you to kindly dispose-off the
above mentioned complaint and not to initiate any inquiry against the Company.
.................."

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8.

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 Vide Hearing notice no:
SEBI/NRO/AO/VKV/DL/2062/2015 dated December 08, 2015 at SEBI-NRO, New Delhi on
December 18, 2015. The said Notice of hearing was duly served to the Noticee through
the Department of Post.

9.

Noticee vide email and letter dated December 16, 2015 had requested for the
adjournment of hearing schedule.

10. Acceding to the request of the Noticee, 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
a final opportunity of personal hearing on December 29, 2015, vide e-mail dated
December 16, 2015 at SEB NRO.

PERSONAL HEARING

11. On the scheduled date of personal hearing, Ms. Shaily Goel, Practicing Company
Secretary, appeared as Authorised Representative (AR). During the hearing, the AR made
the following submissions, which inter alia, stated as under:
"..........

We reiterate the submissions made by the Noticee vide letter dated February 20,
2015. Further, the pending complaint of the complainant has been resolved by the
noticee.

In the matter, we wish to submit that company has received share certificates of
transfer in 2011. After receiving the share certificate for transfer, company sent
letters to the shareholder for providing the signature verification from bank as
there was some mismatch in the signatures. Even after several reminders (copy
attached as A), they did not provide their signature verification from bank. Then
the company wrote a letter to transferee i.e. Mr. Prateek Rajendra Gandhi
regarding share transfer (copy attached as B) and requested to provide the needful

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required for the transfer. After many follow up with the transferee, the company
transferred the shares and sent the share certificate to the transferee.

Meanwhile the process, the transferee made a complaint with the SEBI. However
no copy of complaint was received by the company regarding the share transfer.
Further we were not aware of the complaint made with SEBI as the details of
SCORES ID were lost. Thus we are not in position to submit our reply in SCORES for
the complaint.

Further after creating SCORES ID, we came to know that the complaint is still
pending against the Company. Then company submitted its reply on the SCORES
ID along with letters received from the complainant and then the matter has been
disposed of in SCORES and as on date, no investor complaint is pending against the
company.

While considering the matter of the Company, the following factors may be please
be taken to consideration:
That there was no malafide intention on the part of the company to delay
the share transfer process.
And that the company has resolved the complaint of investor in time and the
only the reply could not be submitted on SCORES ID in time because of the
unawareness of the complaint and non-availability of SCORES ID. As soon as
we came to know of the matter, we submitted our reply with the SCORES.

..........
ISSUES FOR CONSIDERATION
12.

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?

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FINDINGS

13.

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?

14.

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 letter dated February 22, 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,
from the submissions of the Noticee I note that it had provided details for authentication
for SCORES user id & password. Regarding the one pending investor complaint which
was relating to non-receipt of shares after transfer as mentioned in the SCN, the Noticee
has stated that it had duly redressed the investor grievances and were disposed on
October 31, 2013. Subsequently, SEBI has also confirmed that the Noticee had obtained
SCORES authentication and had resolved the pending investor grievance (as mentioned
in the SCN) on April 20, 2015.

15.

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?

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16.

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.
17.

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?

18.

Since, the Noticee is not liable for monetary penalty in the instant matter, this issue
deserves no consideration.

19.

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
April 20, 2015.

20.

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 12, 2016

Vijayant Kumar Verma

Place: New Delhi

Adjudicating Officer

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