Daulat Laxmilal Chandraliya vs Securities And Exchange Board Of India

Tarun Agarwala, Presiding Officer

The present appeal has been filed against the order dated 28th February, 2019 passed by the Adjudicating Officer imposing a penalty of Rs.5 lakhs for violation of Regulations 3 and 4 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003. For the same alleged violation the Whole Time Member by a separate order had debarred the appellant from accessing the securities market for a period of two years. That order was also challenged by the appellant which was dismissed as withdrawn.

In the impugned order we find that numerous buy orders were being placed by the appellant of 100 to 200 shares before the sell order and generally these were the first trades of the day. The counter party used to purchase miniscule shares and, thereafter, the appellant used to withdraw the remaining trades which he had placed. This pattern of trading continued for days. The Adjudicating Officer has also found that the counter party was one and the same person, namely, Mr. Ghanshyam Kachhawa who was connected with the Company and, therefore, a direct link has been established between the appellant for manipulating the price of the scrip for ulterior purposes.

In the light of the aforesaid facts which are not disputed, we are of the opinion that the order of the Adjudicating Officer does not suffer from any manifest error of law. Trading pattern of the appellant clearly indicates not only connivance with the counter party but the trading pattern was totally manipulative which increased the price of the scrip. Thus, the appeal fails and is dismissed with no order as to costs.

The present matter was heard through video conference due to Covid-19 pandemic. At this stage it is not possible to sign a copy of this order nor a certified copy of this order could be issued by the registry. In these circumstances, this order will be digitally signed by the Private Secretary on behalf of the bench and all concerned parties are directed to act on the digitally signed copy of this order. Parties will act on production of a digitally signed copy sent by fax and/or email.