Korp Securities Ltd vs Securities And Exchange Board Of India

Tarun Agarwala, Presiding Officer

The present appeal has been filed by the broker against the order dated July 10, 2019 passed by the Adjudicating Officer (hereinafter referred to as

‘AO’) of Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) wherein the following penalty was imposed.

“a) Penalty of Rs. 25,00,000/- (Rupees Twenty Five Lakh Only) under the provisions of Section 15HA of the SEBI Act for violation of provisions

of Regulations 3(a),(b),(c),(d),4(1) and 4(2)(a) of PFUTP Regulations, 2003;

b) Penalty of Rs. 10,00,000/- (Rupees Ten Lakh only) under the provisions of Section 15 HB of the SEBI Act for violation of provisions of Clause

A(1), (2) & (5) of Code of Conduct for Stock Brokers under the Regulation 9 of Stock Broker and Sub-brokers Regulations, 1992.

c) Penalty of Rs. 10,00,000/- (Rupees Ten Lakh only) under the provisions of Section 15 HB of the SEBI Act for violation of directions issued by

SEBI vide orders dated January 19, 2010 and January 25, 2010.â€​

The learned counsel for the appellant Mr. Vinay Chauhan contended that he is only pressing the penalty imposed in the paragraph No. 57(a) of the

impugned order wherein a sum of Rs. 25 lac was imposed 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 (hereinafter referred to as ‘PFUTP Regulations’).

It was contended that on the same charge and on the same issue proceedings were also initiated by the WTM and the WTM by its order dated

April 30, 2021 has exonerated the appellant from this charge. The said order has become final. This fact has been brought on record by means of an

additional affidavit which is not disputed by the respondent.

In view of the aforesaid, we are of the opinion that if another authority of SEBI has exonerated the appellant on the same issue, we do not see any

reason why the order of penalty stipulated in paragraph No. 57(a) of the order of the AO should be allowed to stand.

In view of the aforesaid, the appeal is partly allowed. The penalty of Rs. 25 lac imposed for violation of Regulations 3 and 4 of the PFUTP

Regulations is set aside. In the circumstances of the case, parties shall bear their own costs. The remaining amount stipulated in paragraph No. 57(b)

and (c) may be paid within two weeks from today by the appellant.

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.