ALAKNANDA CAPITAL SERVICES LTD. Vs. SECURITIES & EXCHANGE

JUDGEMENT

(1.) THE appeal has been filed against the order dated August 29, 2005 of the adjudicating officer passed in terms of the provisions of Section 15A(a) of the SEBI Act, 1992 and Rule 5 of the SEBI (Procedure for Holding Enquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 imposing a penalty of Rs. 10,000/ - on the appellant i.e., Alaknanda Capital Services Private Limited.

(2.) SECURITIES and Exchange Board of India (for short œSEBI ) wanted to get information regarding the appellant ™s dealings in the scrip of Jagsonpal Pharmaceuticals Limited (hereinafter referred to as œJPL ). In order to obtain necessary information the investigating officer had issued two summons to the appellant on 28th April, 2004 and July 2, 2004. The appellant was required to submit certain information regarding price manipulation in the scrip of JPL as per annexure to the summons. The appellant was also required to personally appear before the investigating authority. The adjudicating officer appointed by SEBI vide its order dated 14/12/2004, issued a show cause notice dated 04/04/2005 in terms of Rule 4 of Securities and Exchange Board of India (Procedure for Holding Enquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 requiring the notice to show cause as to why an inquiry should not be held against the notice for the alleged violation committed by it. The appellant was also required to attend personal hearing on 25/05/2005 and was given another opportunity on 15/06/2005. The appellant neither replied to the show cause notice nor attended the hearing and hence ex -parte proceedings were conducted on the basis of facts and material available on record.

(3.) THE adjudicating officer while examining the facts and records of the case came to the conclusion that the summons dated 28/04/2004 and the annexure along with which certain information pertaining to the dealings in the scrip of JPL was required by the investigating officer had been served on the appellant as per the acknowledgement available on record. The adjudicating officer, however, clearly records that there was no proof of the service of summons dated July 2, 2004. He goes on to record that the same cannot be deemed to have been served on the noticee. The adjudicating officer further mentions in his findings that the appellant failed to submit necessary information pertaining to its dealing in the scrip of JPL to the investigating officer as summons along with annexure dated 28/04/2004 had been received by the appellant.