Securities Appellate Tribunal, Mumbai: The SAT, Mumbai has held that delisting of a company is not a tenable ground to be held unaccountable for non-compliance with SEBI circulars. In Pashupati Cables Ltd. v. SEBI, the Tribunal heard an appeal against a penalty of Rs. 6 lakhs imposed by SEBI on the appellant company for not getting SEBI Complaint Redress System (SCORES) Authentication in violation of circulars issued by the SEBI in June 2011, August 2012, April 2013, and July 2014. 

The appellant contended that they had been served no show-cause notice preceding the imposition of the penalty; the company had suspended trading in the scrip in March 1999, had caused no harm to investors and had been de-listed in July 2017. Hence the order passed in December 2017 was bad in law. 

The SAT rejected all the above contentions, observing that since the SEBI issued circulars multiple times, issuing a show-cause notice to the appellant would be futile. It further said that the grounds of trading in scrip being suspended and no loss to investors would not hold as being a listed company while the circulars were issued made it obligatory for the appellant to obtain SCORES authentication and even de-listing would not absolve the appellant of the breaches committed before the said de-listing took place. The contentions raised can only be used as a mitigating factor. 

Keeping in mind that violation of SEBI circulars can lead to the imposition of a penalty up to Rs. 1 crore under Section 15 HB of the SEBI Act and the appellant was only penalised to the extent of Rs. 6 lakhs, the Adjudicating Officer was justified and had taken into consideration the mitigating factors. The appeal was accordingly dismissed. [Pashupati Cables Ltd. v. Securities and Exchange Board of India,2018 SCC OnLine SAT 69, decided on 07-05-2018] 


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