BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

ADJUDICATION ORDER NO. JJ/AM/AO94/2015

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:
Punjab Woolcombers Limited
(PAN AAACP9846Q)
In the Matter of: Punjab Woolcombers Limited
_________________________________________________________________________________________
BACKGROUND
1. Securities and Exchange Board of India (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 (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 (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

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the details for authentication to SEBI, in the format annexed to the

said Circular. However, it was observed that Punjab Woolcombers
Limited (Noticee) did not submit the details to SEBI which were
required to be furnished in terms of the said Circular.
2. In order to further remind about the compliance with the
requirements as laid down in the SEBI Circular dated June 03, 2011,
letters were sent on November 21, 2011 and January 11, 2012 and
subsequently letter dated January 18, 2012 was also 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.
3. 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 seven investor complaints were pending against
the Noticee as on August 27, 2012. However, it was alleged that the
Noticee failed to redress pending investor grievances and also failed to
obtain SCORES authentication in spite of being called upon by SEBI to
do so thereby violating the provisions of Section 15C of the SEBI Act,
1992.
4. Shri Praveen Trivedi was appointed as the Adjudicating Officer to
inquire and adjudge under Section 15C of the SEBI Act, 1992, the
alleged violations committed by the Noticee. Pursuant to the transfer

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of Shri Praveen Trivedi, the undersigned was appointed as

Adjudicating Officer vide Order dated December 18, 2013.
SHOW CAUSE NOTICE, HEARING & REPLY
5. Show Cause Notice (SCN) in terms of the provisions of Rule 4(1) of
SEBI (Procedure for Holding Inquiry and Imposing Penalties by
Adjudicating Officer) Rules, 1995 (Adjudication Rules) was issued to
the Noticee on September 24, 2013, calling upon the Noticee to show
cause why an inquiry should not be held against it under Rule 4(3) of
the Adjudication Rules read with Section 15I of the SEBI Act, 1992 for
the alleged violations.
6. The aforesaid SCN was duly delivered to the Noticee through the
Department of Post. Vide letter dated October 07, 2013 the Noticee
submitted its reply to the SCN and inter alia stated the following:
We have to inform you that the company has already login to SCORES system
electronically on 19.11.2012. We have already submitted the detail for
Authentication in the SCORES in the format ANNEXURE in the circular No.
CIR/OIAE/2/2011 dated 03.06.2011 and also sent it to General Manager, Office
of Investor Assistance and Education (OIAE). SEBI Head Office, Mumbai
through Speed Post. We have already resolved all the complaints electronically.
We have also resolved the 7 complaint as per your letters as follows.
Sr. Registration No Name of Complaint
Nature of
Action taken brief
Complaint
1

SEBI/DH05/910
2375/1(P)

Surjeet Singh

Non Receipt
of refund in
Public/Right
issue

SEBIP/DH06/91
02700/1(P)

Shyam Singhania

Non Receipt
of shares
after
transfer

We attach herewith a 2nd reminder

dated 29.08.2013 to the Shareholder
along with receipt of Registration Post.
1st reminder dated 14.08.2013
received/delivered to Shareholder on
17.08.2013.
The company write a Letter to the
Shareholde , Mr. Shyam Singhania on
05.09.2013 and despatched on
12.09.2013. A copy of said Letter along
with receipt of despatch is attached for
your reference

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SEBIP/DH07/91
03001/1(P)

Bal Krishna Asawa

Non Receipt
of shares
after
transfer

SEBIP/DH08/91
03088/1(P)

Ramanatham Chetty
V

Non Receipt
of shares
after
transfer

SEBIP/DH08/91
03031/1(P)

Jyotirmay Sen. Gupta

Non Receipt
of shares
after
transfer

SEBIP/DH08/91
03201/1(P)

Rajendra Kumar
Indrawadanbhai
Patel

Non Receipt
of shares
after
transfer

SEBIP/DH1
1/0000012/1(P)

Reena Manish Doctor

Non Receipt
of shares
after
transfer

7.

We attach herewith a 2nd reminder

dated 29.08.2013 along with receipt of
registered post. 1st reminder dated
12.08.2013 received/delivered to
Shareholder on 17.08.2013. Till date,
no response received by17.08.2013Till
date , no response by the company.
The company will transfer and demat
these shares electronically after
receiving DRF from their DP. Reply and
email sent to Shareholder is attached
herewith for your reference.
He was making a Complaint for remat
in his shares whereas the shares were
in the name his father. Then we made
phone calls to him and further inquired
in the things and he told the facts, now
it has been resolved.
112 Shares have already been
transferred on 30.12.2006 vide folio No.
R 02819 but the shares have been
received back by us undelivered to the
shareholder. We again sent it on
11.01.2007 and received undelivered
The Company write a Letter
confirmation of correspondence
address. The original share certificates
of 100 shares retained by the company.
The company will despatch these
shares to shareholder after receiving
the confirmation Letter. A copy of letter
along with courier receipt is attached
herewith for your reference.

Subsequent to the appointment of the undersigned, vide Notice dated

February 10, 2015 the Noticee was given an opportunity of personal
hearing on March 03, 2015. The said Notice dated February 10, 2015
was duly delivered to the Noticee through Registered Post and by
email. Vide email dated February 22, 2014 Mr. Ashok Singla, Practising
Company Secretary requested for an opportunity of personal hearing
on February 24, 2015; which was duly acceded to. On February 24,
2015 Mr. Ashok Singla appeared as Authorised representative (AR) on
behalf of the Noticee and reiterated submissions made vide letter
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dated October 07, 2013. The AR also stated that they will be making
further submissions by February 28, 2015. Thereafter, vide letter
dated October 07, 2013 (received by SEBI on March 02, 2015) the
Noticee submitted copy of Action History for the seven complaints
mentioned in the SCN.
ISSUES FOR CONSIDERATION
8. After perusal of the material available on record, I have the following
issues for consideration, viz.,
A. Whether the Noticee has failed to resolve investor grievances?
B. Whether the Noticee is liable for monetary penalty under Section
15C of the SEBI Act, 1992?
C. 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?
FINDINGS
9. On perusal of the material available on record and giving regard to the
facts and circumstances of the case, I record my findings hereunder.
ISSUE 1: Whether the Noticee has failed to resolve investor
grievances?
10. 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. By not submitting the details for
authentication as required by the Circular, the Noticee did not obtain
the user id and password which was essential for accessing the
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complaints pertaining to the Noticee, as uploaded on the SCORES for

redressing the investor grievances. Vide letters sent on November 21,
2011 and January 11, 2012 and subsequently vide letter dated January
18, 2012 the Noticee was once again advised to obtain the SCORES
authentication.
11. Vide letter dated October 07, 2013 the Noticee submitted that it had
already obtained SCORES login and regarding the pending complaints,
the Noticee submitted that it had resolved all the complaints
electronically. Subsequently, SEBI has confirmed that the Noticee had
obtained SCORES authentication on November 20, 2012 and out of the
7 complaints mentioned in the SCN, the Noticee had resolved four
complaints in SCORES before the issuance of SCN; two complaints
were resolved in SCORES on February 04, 2014 and one complaint
was still showing as pending (as on March 12, 2015). From the SCN
and the Action History submitted by the Noticee, I note that the
Noticee had resolved two complaints only after receiving the SCN. I
also note that though sufficient time had elapsed, the Noticee was yet
to resolve one complaint of Mr. Shyam Singania relating to Nonreceipt of shares after Transfer.
12. Honble SAT in S. S. Forgings & Engineering Limited & Others v SEBI,
Appeal No. 176 of 2014 (decided on August 28, 2014) has, inter-alia,
observed that Undoubtedly, an obligation is cast upon every
listed company to redress investors grievances in a time bound manner as
may be prescribed by SEBI from time to time. This Tribunal has
consistently held that redressal of investors grievances is extremely
important for the Regulator to regulate the capital market. If the
grievances are not redressed within a time bound framework, it leads to
frustration among the investors who may not be motivated to further
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invest in the capital market. Hence the importance of complaints redressal

system initiated by SEBI in June, 2011 cannot be undermined and its
sanctity has to be maintained by all the listed companies.. As
already observed, two investor grievances were resolved only after
SCN was issued, and one grievance was still pending as unresolved (as
on March 12, 2015); so I hold that the allegation against the Noticee of
not resolving the investor grievances stands established.
ISSUE 2: Whether the Noticee is liable for monetary penalty under
Section 15C of the SEBI Act, 1992?
13. The provisions of Section 15C of the SEBI Act, 1992, read as under:
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.
14. In the matter of SEBI Vs. Shri Ram Mutual Fund [2006] 68 SCL 216 (SC),
the Honble Supreme Court of India has held that In our considered
opinion, penalty is attracted as soon as the contravention of the
statutory obligation as contemplated by the Act and the regulation is
established and hence the intention of the parties committing such
violation becomes wholly irrelevant.
15. A listed company is expected to comply with the extant regulatory and
statutory requirements. As already observed, the Noticee failed in
resolving the investor grievances pending against it, despite being
called upon to do so by SEBI. Therefore, the Noticee is also liable for
monetary penalty under Section 15C of the SEBI Act, 1992.

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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?
16. While imposing monetary penalty it is important to consider the
factors stipulated in Section 15J of the Act, which reads as under:
15J - Factors to be taken into account by the adjudicating
officer
While adjudging quantum of penalty under section 15-I, the
adjudicating officer shall have due regard to the following factors,
namely:(a)the amount of disproportionate gain or unfair advantage,
wherever quantifiable, made as a result of the default;
(b)the amount of loss caused to an investor or group of investors as
a result of the default;
(c)the repetitive nature of the default.
17. In the absence of material on record, the amount of disproportionate
gain or unfair advantage made as a result of the default and the
amount of loss caused to the investors due to the said default cannot
be quantified. However, the fact remains that the Noticee, being a
listed company, failed to fulfil its duty of resolving the investor
grievances and updating ATRs in SCORES despite being called upon to
do so by SEBI. It is the duty of SEBI to ensure speedy resolution of
investor grievances and listed companies like the Noticee which do
not resolve investor grievances despite SEBI Circulars frustrate the
entire process. It is of utmost importance that every listed company
assigns high priority to investor grievances and takes all necessary
steps to redress the grievances of investors at the earliest, which the
Noticee has failed to do. While imposing monetary penalty I have
considered the fact that the Noticee had obtained SCORES
authentication and had resolved four (out of seven) investor
grievances, before the issuance of SCN.

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18. In view of the aforesaid paragraphs, I find that imposing a penalty of `

2,00,000/- (Rupees Two Lakhs only) on the Noticee would be
commensurate with the violation committed.
ORDER
19. Considering the facts and circumstances of the case, in terms of the
provisions of SEBI Act, 1992 and Rule 5(1) of the Adjudication Rules, I
hereby impose a penalty of ` 2,00,000/- (Rupees Two Lakhs only)
under Section 15C of the SEBI Act, 1992, on Punjab Woolcombers
Limited.
20. The penalty shall be paid by way of demand draft drawn in favour of
SEBI Penalties Remittable to Government of India payable at
Mumbai within 45 days of receipt of this Order. The said demand draft
shall be forwarded to the Regional Director, Northern Regional Office,
Securities and Exchange Board of India, 5th Floor, Bank of Baroda
Building, 16, Sansad Marg, New Delhi 110001.
21. 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: April 28, 2015

Place: Mumbai

Jayanta Jash
Adjudicating Officer

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