NORTHERN PROJECTS LIMITED Vs. ADJUDICATING OFFICER
LAWS(SB)-2011-8-4
SECURITIES APPELLATE TRIBUNAL
Decided on August 29,2011

Northern Projects Limited Appellant
VERSUS
Adjudicating Officer Respondents

JUDGEMENT

N.K.Sodhi, Presiding Officer - (1.) THIS order can conveniently dispose of ten Appeals no.45, 55, 57 to 62, 70 and 75 of 2011. Four of these appeals have been filed by Morgan Securities and Credits Pvt. Ltd., Northern Projects Ltd., Morgan Ventures Ltd. and Praveen Electronics Pvt. Ltd. On whom a monetary penalty of Rs.40 lacs each has been imposed by the adjudicating officer for violating the provisions of Regulation 10 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter called the takeover code) in not making a public announcement as required by the said provision. Four of the other appeals have been filed by Blue Coast Hotels and Resorts Ltd. seeking, among others, enhancement in the quantum of penalty imposed on the aforesaid four appellants. Blue Coast Hotels and Resorts Ltd. has filed two more appeals seeking, among others, imposition of monetary penalties on two companies that have been let off by the adjudicating officer. Facts giving rise to the appeals are these.
(2.) MOREPEN Laboratories Ltd. (for short the borrower) took a loan of Rs.7 crores from Morgan Securities and Credits Pvt. Ltd. (hereinafter referred to as the lender). In order to secure this loan, six associate companies of the borrower pledged as collateral security their 15 lacs shares held by them in Blue Coast Hotels and Resorts Ltd., Goa (hereinafter called the target company). It is common ground between the parties that the borrower defaulted in the repayment of the loan as a result whereof the lender invoked the pledge and got the 15 lacs pledged shares of the target company transferred in its demat account. Having acquired the pledged shares, the lender started selling them in the market to recover its dues. The shares were sold in tranches through the price and order matching mechanism of the exchange during the period from December, 2003 to March, 2004. We have on record that when the lender sold the shares, the following five companies had purchased them and the details of their purchases are as under. Sr. No. Name of purchaser No. of shares purchased Period during which shares were purchased 1. Northern Projects Ltd (Appellant in Appeal no.55 of 2011)
(3.) ,15,000 6,55,000 February 26, 2004 March 5, 2004 2. Morgan Ventures Ltd. (Appellant in Appeal no.70 of 2011) 45,345 2,00,000 42,216 March 26, 2004 to April 20, 2004 August 2, 2005 August 9, 2005 to October 13, 2005 3. Namedi Leasing & Finance Ltd. (Let off by the adjudicating officer) 1,19,400 July 9, 2004 Praveen Electronics Pvt. Ltd. (Appellant in Appeal no.75 of 2011) 3,00,100 July 16, 2004;


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