Mumbai: Andheri Trader Acquitted By SEBI Judge Over Non-Timely Receipt Of Penalty Order

Mumbai: Andheri Trader Acquitted By SEBI Judge Over Non-Timely Receipt Of Penalty Order

The court said there was no proof that the accused was informed about the order. The SEBI officer admitted that the order remained unserved for ten years till 2019.

Charul Shah JoshiUpdated: Saturday, April 20, 2024, 07:34 AM IST
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A special SEBI judge has acquitted an Andheri- based trader who was charged for non payment of penalty imposed on him by SEBI Board in 2009 for manipulative trading. The court said  there was no proof that the accused was informed about the order. The SEBI officer admitted that the order remained unserved for ten years  till 2019.

As per the prosecution case, the trader namely Santosh Narvekar was found to have indulged in manipulation of shares of the firm Mega Corporation Limited. The SEBI-appointed adjudication officer had imposed a penalty of Rs 10 lakhs on him in the order dated July 16, 2009. However, the  order was dispatched to him by SEBI only in 2019.

It is claimed that even after getting the order, Narvekar failed to comply and pay the penalty. Hence,  prosecution was initiated against him. As per the rule, a person has to pay the penalty amount within 45 days of having receiving the order.

The special SEBI judge A. A. Kulkarni, observed that, after the  order was passed in  2009 till 2019 it was not  sent to the accused on his address. It is noted that the order was sent to the accused by speed post, only on March 13, 2019 and a reminder letter was also dispatched by speed post on September 20, 2019. 

 The prosecution claimed that the order was sent to the accused by speed post on March 13, 2019 and a reminder letter was also dispatched by speed post on September 20, 2019. The prosecution submitted an acknowledgment card received from postal department to show that the order and letter were sent. The prosecution while refering to the acknowledgment card of having sent the order, said that the court should presume that the postal department would have completed the work of delivering the order as well as the reminder letter. 

The defence, however, claimed that Narvekar never received the copy of the order or the reminder letter. The defence argued that the prosecution did not submit any proof to show that Narvekar had recieved the order or he was informed about the order or he knew of any such order was passed against him, for him to act on it.

The court observed that the prosecution has failed to prove that the accused had a knowledge of the adjudicating order and he knowingly failed to pay the penalty. The court said, "only on the basis of acknowledgment cards produced by the complainant (SEBI) it cannot be presumed that, the adjudication order and reminder letters as claimed by the complainant were duly posted and were received by the accused."

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