BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

ADJUDICATION ORDER NO. PJ/JAK/4/2016
__________________________________________________________________
UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF
INDIA ACT,1992 READ WITH RULE 5 OF SEBI (PROCEDURE FOR
HOLDING INQUIRYANDIMPOSING PENALTIES BY ADJUDICATING
OFFICER) RULES, 1995
In respect of:
M/s Bubna Major Biotech Limited
(PAN Not Available)
In the matter of M/s Bubna Major Biotech Limited
__________________________________________________________________
BACKGROUND
1. Securities and Exchange Board of India (hereinafter referred to as "SEBI") came
out with Circular viz., Circular No. CIR/OIAE/1/2012 dated August 13, 2012
(hereinafter referred to as "Circular"), directing all the companies whose
securities were listed on stock exchanges to obtain SEBI Complaints Redress
System(SCORES) authentication by September 14, 2012 and also redress the
pending investor grievances within the stipulated time period failing which
appropriate enforcement action would be initiated against them. It was noticed
that M/s Bubna Major Biotech Limited(hereinafter referred to as the Noticee/
Company) has failed to comply with the said provisions.
2. SEBI observed from SCORES that two(2) complaints were filed by the
investors.The said complaints were not resolved within the specified time in terms
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of SEBICircular No. CIR/OIAE/1/2012 dated August 13, 2012. The same was
also communicated to the Noticee by SEBI vide its letter Ref. No.
OIAE1/MRG/31575/2014 dated 05.11.2014 (inadvertently mentioned as
18.11.2014 in the Show Cause Notice).
3. It was therefore alleged that the Noticee hasfailed to obtain SCORES
authentication and also failed to resolve the investor complaints with in the
specified

time,

thereby

failing

to

comply

with

SEBI

Circular

No.

CIR/OIAE/1/2012 dated August 13, 2012 thereby making the Noticee liable for
penalty under Section 15 HB and Section 15C of the SEBI Act, 1992.
APPOINTMENT OF ADJUDICATING OFFICER
4. The undersigned was appointed as Adjudicating Officer vide order dated
29.12.2015under section 19 of SEBI Act read with section 15-I of SEBI Act read
with rule 3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by
Adjudicating Officer) Rules, 1995 (hereinafter referred to as Rules) to inquire
into and adjudge under Section 15 HB and 15C of the SEBI Act, the alleged
violations of the provisions of Circular No. CIR/OIAE/1/2012 dated August 13,
2012.
SHOW CAUSE NOTICE,REPLY ANDHEARING
5. Show Cause Notice No. EAD/PJ/JAK/1165/2016 dated 13.01.2016(hereinafter
referred to as 'SCN') was issued to the Noticee under rule 4 of the Rules to show
cause as to why an inquiry should not be held and penalty be not imposed under
Section 15 HBand Section 15C of SEBI Act for the alleged violation of provisions
of the circular by not obtaining SCORES authentication and failing to redress
two(2) investor complaints within the prescribed time. The SCN was sent by
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electronic mail to the e-mail id tanujajalan@yahoo.co, the email ID of the

Company on the MCA websitein in terms of rule 7(b) of Securities and Exchange
Board of India (Procedure for Holding Inquiry and Imposing Penalties by
Adjudicating Officer) Amendment Rules, 2015.The noticee did not reply to the
SCN. Thereafter, an opportunity of personal hearing was granted on 15.02.2016
vide hearing notice dated 28.01.2016and advised the Noticee to reply by
12.02.2016.The said hearing notice was sent through electronic mail to the e-mail
id tanujajalan@yahoo.co.in. The Noticee did not appear for the hearing.
Thereafter, another opportunity of hearing was granted to the Noticee on
26.02.2016 vide hearing notice dated 16.02.2016 sent through Speed Post
Acknowledgement Due on the address of the Registered Office of the Noticee as
per the MCA website which was also delivered. The Noticee was advised to
furnish the reply by 25.02.2016.However, the Noticee has failed to reply to the
SCN till date and further failed to appear before the undersigned for the
opportunities of hearing granted on 15.02.2016 and26.02.2016.In the said SCN
and in the hearing notices it was specifically stated that,if the Noticee fails to
submit their reply to the SCN or failsto attend the hearing proceedings on the
stipulated date and time, it will be presumed that Noticee has no submissions to
offer in its defense and the matter would be further proceeded with on the basis of
the material available on record. I note that the Noticeehas failed to submit the
reply to the SCN and also failed to appear for hearings to substantiate their case
towards the allegations stated in the SCNs. For the reasons mentioned above, I
observe that the Noticee was provided with enough opportunities to submit reply/
to be heard and hence, I am constrained to proceed ex-parte with the matter on
the basis of the material available on record.
CONSIDERATION OF ISSUES
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6. I have carefully perused the documents available on record. It is observed that the
allegation against the Noticee is that they have failed to obtain SCORES
authentication and failed to redress2(two) investor complaints.
7. The issues that, therefore, arise for consideration in the present case are:
7.1. Whether the Noticee has violated the
7.1. 1. provisions of Circular viz., SEBI Circular No. CIR/OIAE/1/2012 dated
August 13, 2012 by failing to obtain SCORES authentication and failing to
redress two investor complaints within the prescribed time?
7.1. 2. Does the violation, if any, attract monetary penalty under Section 15 HB
and 15C of SEBI Act?
7.2. If so, what would be the monetary penalty that can be imposed taking into
consideration the factors mentioned in Section 15J of SEBI Act?
FINDINGS
8. Before moving forward, it is pertinent to refer to the provisions of Circular, which
reads as under:

CIRCULAR Ref. No. CIR/OIAE/1/2012 August 13, 2012

SEBI had issued Circular No.CIR/OIAE/2/2011 dated June 3, 2011 regarding
commencement of SEBI Complaints Redress System (SCORES) and advising all companies
whose securities are listed on various stock exchanges to comply with the provisions of the said
circular.
1. In this regard, all companies whose securities are listed on stock exchanges, are hereby advised
to obtain SCORES authentication by September 14, 2012 in terms of the aforesaid circular.
2. All companies against whom complaints are pending on SCORES, shall take appropriate
necessary steps within 7 days of receipt of complaint by the concerned company through

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SCORES, so as to resolve the complaint within 30 days of receipt of complaint and also keep the
complainant duly informed of the action taken thereon.
3. In case of failure to comply with the above, SEBI would be constrained to initiate enforcement
actions as per the law as may be deemed appropriate.

---------------------------------------------------------------------------------------9. The issue for consideration is whether the Noticee has failed to obtain SCORES
authentication and redress 2(two) investor complaintswithin the prescribed time.I
find from the website www.scores.gov.in that the Noticee is listed on Ahmedabad
Stock Exchange amongst the existing stock exchanges.The Noticee was required
to comply with the said SEBI Circular within the stipulated time period as
prescribed by SEBI as it is a listed company. However the Noticee failed to obtain
SCORES authentication in complianceof terms of SEBI circular dated 13.08.2012.
Further the Noticee also failed to resolve the investor complaintsin spiteof being
called upon in writing vide letter Ref. No. OIAE1/MRG/31575/2014 dated
05.11.2014.It is noted that on the MCA website, the status of the company is
Active with the date of Balance Sheet being 31.03.2014 and date of the last
AGM being 30.09.2014.
10. In view of the facts of the matter, I rely on the case of M/s Port Shipping
Company Limited, The Hon'bleSecurities Appellate Tribunal has made the
following observation Argument of the appellant that there was no operating income, no
permanent employee, no pending investor grievance, no prejudice caused to any investor and that
the shares of the appellant company were not traded for more than six years, cannot be a ground
to disobey the directions given by SEBI. Obligation to obtain SCORES authentication was not
dependent on there being operating income or pending investor grievance or trading of shares on the
stock exchanges. Admittedly, the appellant company continues to be a listed company and,
therefore, it was obligatory on part of appellant company to obtain SCORES authentication
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within the time stipulated by SEBI. However, the appellant has consistently failed and neglected
to comply with the directions of SEBI and it is only when SEBI initiated penalty proceedings, the
appellant chose to comply with the directions of SEBItherefore, in the facts of the present case
appellant deserved higher penalty.However, after taking all the factors set out by the appellant as
mitigating factors, the adjudicating officer of SEBI has imposed nominal penalty of Rs.
1,50,000/- as against the imposable penalty of Rs.1 crore. In such a case, it cannot be said that
the penalty imposed is excessive or unreasonable
11. The Honble Securities Appellate Tribunal (SAT) in the matter of Classic

Credit Ltd. vs. SEBI (Appeal No. 68 of 2003 decided on December 08, 2006)
wherein it, inter alia, observed that

"............ the appellants did not file any reply to the second show-cause notice. This being so, it
has to be presumed that the charges alleged against them in the showcause notice were admitted by
them.

12. The Honble SAT has recently in the matter of Sanjay Kumar Tayal&

Others v SEBI (Appeal No. 68 of 2013 decided on February 11, 2014), interalia, observed that
As rightly contended by Mr. Rustomjee, learned senior counsel for
respondents, appellants have neither filed reply to show cause notices issued to them nor availed
opportunity of personal hearing offered to them in the adjudication proceedings and, therefore,
appellants are presumed to have admitted charges leveled against them in the show cause
notices..

13. In the light of the above facts and relying on the cited case laws, I am of the firm
belief that it is established without doubt that the Noticee has violated the

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provisions of thesaid Circular by not obtaining SCORES authentication andfailing

to redress the investor complaints within the prescribed time.
14. Further, I note that the Honble Supreme Court of India in the matter of SEBI Vs.
Shri Ram Mutual Fund [2006] 68 SCL 216(SC) has also 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 Regulations is established and hence the intention of the parties
committing such violation becomes wholly irrelevant.
15. In view of the foregoing, I am convinced that it is a fit case to impose monetary
penalty under Section 15 HB and Section 15C of the SEBI Act, which read as
under:

Penalty for contravention where no separate penalty has been provided.

15HB. Whoever fails to comply with any provision of this Act, the rules or the regulations made
or directions issued by the Board thereunder for which no separate penalty has been provided, shall
be [liable to a penalty which shall not be less than one lakh rupees but which may extend to one
crore rupees.

Penalty for failure to redress investors grievances.

15C. If any listed company or any person who is registered as an intermediary, after havingbeen
called upon by the Board in writing, to redress the grievances of investors, fails to redresssuch
grievances within the time specified by the Board, such company or intermediary shall beliable to a
penalty[which shall not be less than one lakh rupees but which may extend to onelakh rupees for
each day during which such failure continues subject to a maximum of onecrore rupees.
16. While determining the quantum of monetary penalty under Section 15 HB and
Section 15 C of SEBI Act, I have considered the factors stipulated in Section 15 J
of SEBI Act, which reads as under:
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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. With regard to the above factors to be considered while determining the quantum
of penalty, it is noted that the disproportionate gain or unfair advantage made by
the Noticee or loss caused to the investors as a result of the failure on the part of
the Noticee to obtain SCORES authentication and failure to resolve the
complaints within the stipulated time are not available on record. Further, it may
also be added that it is not possible to quantify the unfair advantage made by the
Noticee or the loss caused to the investors in a default of this nature. However,
lack of due diligence demonstrated by the Noticee is a risk to the securities market
and thus loss to the investors to that extent.
ORDER
18. After taking into consideration all the facts and circumstances of the case, I
impose a penalty of Rs1,00,000/-(RupeesOne lac only) under Section 15 HB
and a penalty of Rs 1,00,000/-(Rupees One lac only)under Section15 C of the
SEBI Act (Total :-Rupees Two lacs only) on the Noticee i.e. M/s Bubna
Major Biotech Limited,whichin my opinion, will be commensurate with the
violations committed by the Noticee.

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19. The Noticee shall pay the said amount of penalty by way of demand draft 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 should be
forwarded to Shri NHariharan, Chief General Manager, Securities and Exchange
Board of India,SEBI Bhavan, Plot No. C4-A, 'G' Block, Bandra Kurla Complex,
Bandra(E), Mumbai-400051.
20. In terms of rule 6 of the Rules, copies of this order are sent to the Noticee and
also to the Securities and Exchange Board of India.

Date: 29.03.2016

PrasadP. Jagadale

Place: Mumbai

Adjudicating Officer

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