BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

[ADJUDICATION ORDER NO. AO/VKV-DL/47/ 2016]
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. ACE Edutrend Ltd (formerly known as ACE India Ltd.)
(PAN: AAACA2760Q)
Jhilmil Industrial Area, Rajiv Colony,
Jhilmil Colony, New Delhi-110095
In the matter of Non-redressal of investor grievance(s)
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.
It was observed that "M/s ACE Edutrend Ltd (formerly known as ACE India Ltd)
(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.

Adjudication order in respect of M/s ACE Edutrend Ltd. (Formerly Known as ACE India Ltd.)
February 22, 2016
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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 14, 2011
and January 19, 2012 was 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. But both the letters
were undelivered.

3.

Subsequently, one more letter dated January 19, 2012 was sent to the Noticee reminding
the Noticee that it has not submitted the authentication details required by the said
Circular and the aforesaid letter dated November 14, 2011 for implementation of
SCORES. The letter advised the Noticee to submit the said information as per the format
in the Annexure enclosed with the said Circular within 7 days. The information was
necessary to create user name and password which would have enabled the Noticee to
view and resolve investor grievance in SCORES. The letter also advised the Noticee to
email soft copy of its reply to scores@sebi.gov.in . The letter clearly informed that in
order to process the investor grievance on SCORES, the Noticee was required to submit
the aforementioned information, failing which, SEBI may initiate appropriate action
including initiation of Adjudication Proceedings, debarment from accessing capital
markets, prosecution proceedings against the Noticee and its directors. The letter also
clearly specified that investor grievance lodged in SCORES would be considered for
closing in the system only upon uploading the ATR in SCORES.

4.

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 (01)
investor complaint was pending against the Noticee as on October 10, 2014.

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February 22, 2016
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5.

It was alleged that by not submitting the details for authentication as required by the
Circular and further required by the two letters dated November 14, 2011 and January
19, 2012, Noticee did not obtain the user id and password which was essential for
accessing the complaints pertaining to it, as uploaded on the SCORES for redressing the
investors grievances and subsequent redressal thereof, within specified time. Thus, it
was alleged that Noticee had failed to redress the investor grievances which renders the
Noticee liable for imposition of penalty under Section 15C of the Securities and Exchange
Board of India Act, 1992 (hereinafter referred to as 'SEBI Act, 1992').

APPOINTMENT OF ADJUDICATING OFFICER

6.

In view of aforesaid, the undersigned was appointed as Adjudicating Officer, vide order
dated December 10, 2014, 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 Adjudicating Rules) to enquire into and adjudge under
section 15C of Securities and Exchange Board of India, Act, 1992 (hereinafter referred
to as "SEBI Act) for the alleged violations committed by the Noticee.

SHOW CAUSE NOTICE, REPLY AND HEARING

7.

A Show Cause Notice (hereinafter referred to as SCN) was issued to the Noticee under
rule 4 of SEBI (Procedure for Holding Inquiry and imposing penalties by Adjudicating
Officer) Rules, 1995 (hereinafter referred to as Adjudicating Rules) 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.

8.

The said SCN bearing No. NRO/AO/VKV/141/2015 dated January 20, 2015 was sent at
the last known office address(s) at 10178/304A, Ravindra Plaza, Abdul Aziz Raod, Karol

Adjudication order in respect of M/s ACE Edutrend Ltd. (Formerly Known as ACE India Ltd.)
February 22, 2016
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Bagh, New Delhi-110005 of the Noticee through Postal Department. However, same was
undelivered.
9.

I found from records that Noticee had changed its registered office address to A 7/6
Jhilmil Industria Area, Shahdara, New Delhi-110095. In the interest of natural justice and
in order to conduct an inquiry in terms of rule 4(3) of the Rules, the Noticee was granted
an opportunity of personal hearing on January 20, 2016 at SEBI, Northern Regional
Office, New Delhi, vide notice of hearing no. SEBI/NRO/AO/VKV/DL/25/2016 dated
January 12, 2016. The said Notice of hearing along with copy of SCN was hand delivered
to the noticee.

PERSONAL HEARING
10. On the scheduled date of personal hearing, Ms. Shivani Khurana, Company Secretary,
appeared as Authorised Representative (AR). During the hearing, the AR made the
following submissions, which inter alia, stated as under:

..An investor Mr. K.M Mathai (complainant/transferor) had lodged share

certificate for transfer vide letter dated 05/07/2011.
A letter informing Mr. K M. Mathai (complainant/transferor) that the transferor
was refused by RTA (Beetal Financials and Computer services Private Limited) of
the company on the grounds of signature of transferor differs vide letter dated
09/07/2011 was issued to him, by registered post.
Thereafter, the share certificates were dispatched/returned to Mr. K M. Mathai
(complainant/transferor) via registered post on 14/07/2012 vide postal
registration no. 4075.That the complaint then informed the company through
letter that he did not get the share certificate and he cant trace them.
That the RTA (Beetal Financials and Computer services Private Limited) of the
Company then sent letter containing complete procedure and documents required
for issue of duplicate share certificate vide letters dated 04/02/2012, 03/03/2012,
22/03/2012, and 14/11/2014 to Mr. K.M Mathai.

As per Rule 6(2)(a) of Companies (Share Capital & Debentures Rules, 2014,
The duplicate share certificate shall be not issued in lieu of those that are lost
or destroyed, without the prior consent of the Board and without payment of such
fees as the Board thinks fit, not exceeding rupees fifty per certificate and on such
reasonable terms, such as furnishing supporting evidence and indemnity and the

Adjudication order in respect of M/s ACE Edutrend Ltd. (Formerly Known as ACE India Ltd.)
February 22, 2016
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payment of out-of-pocket expenses incurred by the company in investigating the

evidence produced.
In view of the above rule, the Company ACE Edutrend Limited and RTA has taken
all the necessary steps rationally and legally by requesting Mr. K.M. Mathai
(complainant) to submit the documents for the issuance of duplicate share
certificates for resolution of the complaint related to Mr. K.M. Mathai.
The matter could have been easily resolved if Mr. K.M. Mathai (complainant) had
taken some steps for complying with the formalities related to issuance of duplicate
share certificates. The company as well as the RTA of the Company have informed
Mr. K.M. Mathai (complainant) several no. of times through several notices since
2012 to apply for duplicate share certificates. But Mr. K.M. Mathai (complainant)
did not show any cooperation and instead kept sending same notices again and
again through various regulatory authorities for resolution of his complaint.
Most importantly please note that the Complaints related to Mr. K.M. Mathai
(complainant/transferor) has been disposed off by SEBI/SCORES itself more than 5
times.
However, as per last complaint received from Mr. K.M. Mathai (complainant) dated
05/01/2015, the investor finally replied something related to issuance of duplicate
share certificates. He has stated that lodging of FIR is not possible for him and no
objection letter from transferor is not possible to arrange for him. He has not stated
the reasons behind them.

Pease note that as per sub-section 5 of Section 46 of the Companies Act, 2013,
If a company with intent to defraud issues a duplicate certificate of shares, the
company shall be punishable with fine which shall not be less than five times the
face value of the shares involved in the issue of the duplicate certificate but which
may extend to ten times the face value of such shares or rupees ten crores whichever
is higher and every officer of the company who is in default shall be liable for action
under section 447.
As per the above Section, issuing duplicate share certificate without completing the
formalities as stated in Rule 6(2)(a) of the Companies (Share Capital & Debentures
Rules, 2014 might attract the risk/penalties as stated above. Thats why, the
company could not transfer the share certificates without the completion of
formalities.
So you therefore, requested to issue us orders/instructions after issuing duplicate
share certificates without fulfilling the formalities of law so as to close the matter
or please issue orders s you may deem fit.

11. Noticee vide e-mail dated 21.01.2016 further submitted its further reply stated as
follows-

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February 22, 2016
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..The compliant of investor K.M. Maithai is a duplicate complaint which has been
disposed off by SEBI/SCORES itself many times. Moreover, the Action Taken Report related
to the said complaint has been uploaded on SCORES website today itself
CONSIDERATION OF ISSUES
12. I have taken into consideration the facts and circumstances of the case, material
available on record and oral submissions made during the hearing. In the present
matter, the following issues arise for consideration and determination:
a) Whether the Notice has failed to resolve investor grievances?
b) Does the violation, if any, on part of the Noticee attract monetary penalty under
Section 15 C of SEBI Act?
c) If so, what would be the quantum of monetary penalty that can be imposed taking
into consideration the factors mentioned in section 15J of the SEBI Act as well as
internal guidelines of SEBI issued from time to time in this regard?
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.
14. Before moving into the merit of the case, it is appropriate to consider preliminary issue
raised by the Noticee during the course of proceedings that whether the Noticee is a
listed company or not. Upon perusal of the documents available on records, I note that
Noticee is listed on Bombay stock Exchange (BSE). Hence, the status of the Noticee is
Listed.
ISSUE 1: Whether the Noticee has failed to resolve investor grievances?
15. It was alleged in the SCN that 01 (one) non-redressed complaint(s) regarding nonreceipt of shares after transfer was pending against the Noticee.
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February 22, 2016
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16. 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. In this regard, from the submissions of the
Noticee I note that it had provided details for authentication for SCORES user id &
password 09.11.2012.
17. With regard one pending investor complaint relating to receipt of shares in physical
mode instead of electronic mode as mentioned in the SCN, the Noticee submitted that
it had made various communication with the complainant and had now resolved the
complaint on the basis of duplicate complaint as same complaint was already disposed
by SEBI earlier. The action taken report has been uploaded on SCORES for pending
complaint. Subsequently, SEBI has also confirmed that the Noticee had obtained
SCORES authentication and had resolved the pending investor grievance (as
mentioned in the SCN).
18. Subsequently, SEBI has also confirmed that the Noticee had obtained SCORES
authentication and the pending investor complaint (as mentioned in the SCN) is a
duplicate complaint and same has been resolved several times on the basis of duplicate
compliant.
19. Since, the Noticee had obtained SCORES authentication and had taken necessary steps
of resolving the pending investor grievance(s); 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?
20. The provisions of Section 15C of the SEBI Act, 1992, read as under:
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February 22, 2016
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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.
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?
21.

I note that, from the submissions made by the Noticee, the allegation against the
Noticee of non-obtaining of SCOREs authentication and non-redressal of the investor
grievance(s) pending against it has not been established; therefore, the Noticee is not
liable for monetary penalty under Section 15C of the SEBI Act, 1992.

ORDER
22.

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

23.

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
January 20, 2015.

24.

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: February 22, 2016

Place: New Delhi

Vijayant Kumar Verma

Adjudicating Officer

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February 22, 2016
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