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BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA
(ADJUDICATION ORDER NO: EAD-3/AO/DRK/JP/ 570/114 of 2014)
______________________________________________________________
UNDER SECTION 15 - I OF THE SECURITIES AND EXCHANGE BOARD OF
INDIA ACT, 1992 READ WITH RULE 5 OF THE SECURITIES AND EXCHANGE
BOARD OF INDIA (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING
PENALTIES BY ADJUDICATING OFFICER) RULES, 1995.
In respect of:
Gloria Leasing Ltd.
Regd. Office at: Sadhna Rayon House,
Dr. D N Road,
Mumbai- 400 001


In the matter of:
(Non Redressal of Investor Grievances
and Non obtaining SCORES Authentication)
-----------------------------------------------------------------------------------------------------------------
Background:
1. Securities and Exchange Board of India (hereinafter referred to as SEBI) during
the course of examination observed that Gloria Leasing Ltd. (hereinafter referred
to as 'the Noticee / the Company") had neither obtained the SEBI Complaints
Redressal System (SCORES) authentication nor redressed the grievances of
investors.
Appointment of Adjudicating Officer:
2. Undersigned was appointed as Adjudicating Officer under section 15-I of the
Securities and Exchange Board of India Act 1992 (hereinafter known as 'SEBI
Act') read with Rule 3 of the SEBI (Procedure for Holding Inquiry and Imposing
Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as
Adjudication Rules) vide communiqu dated May 21, 2013, to inquire into and
adjudicate under Section 15 A (a) and 15 C of the SEBI Act, the alleged violations
by the Company.
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Show Cause Notice, Reply of Noticee and Personal Hearing:
3. A Show Cause Notice A&E/EAD-3/DRK-VVK/19049/2013 dated July 30, 2013
(hereinafter referred to as SCN) was served upon the Noticee under Rule 4 (1) of
the Adjudication Rules, to show cause as to why an inquiry be not held against the
Noticee and penalty be not imposed under section 15 A (a) and 15 C of the SEBI
Act, for the alleged violations of non redressal of investors grievances and non
obtaining of SCORES authentication. The allegations against the Noticee as
levelled in the SCN, are produced hereunder;
a. The SCN stated that vide letter dated January 11, 2013, SEBI advised the
Noticee to furnish the authentication details for implementation of SCORES
within 7 days from the date of receipt of the letter to enable the Company to view
and resolve the investor grievances in SCORES, failing which SEBI may initiate
appropriate actions.
b. It was stated that SEBI vide letter dated February 15, 2013 sought information
from the Noticee regarding SCORES authentication / ATR submission. Under
the said letter dated February 15, 2013, reference of SEBI Circular No.
CIR/OIAE/2/2011 dated June 03, 2011 and SEBI Circular No. CIR/OIAE/1/2012
dated August 13, 2012 was drawn requiring all the companies which are listed
on any Stock Exchange to view the complaints pending against them and submit
Action Taken Report (ATR) electronically in SCORES.
c. It was stated that vide Circular No. CIR/OIAE/1/2013 dated April 17, 2013, SEBI
advised the companies to obtain SCORES authentication within one month from
the date of the said Circular, however, as on May 24, 2013, the Noticee had not
approached SEBI for the authentication.
d. SCN stated that a time-line was granted to the Noticee vide letter dated
February 15, 2013 to resolve the pending complaints at the earliest but not later
than February 27, 2013. However, allegedly, the Noticee had failed to resolve
the grievances of the complainant, failed to reply to the aforesaid letters dated
January 11, 2013 & February 15, 2013, failed to obtain the SCORES
authentication and also failed to submit the ATR as required.
e. It was stated in the SCN that as on May 24, 2013, 2 investor grievances /
complaints were pending against the Noticee in SCORES which were pending
for more than two years. List of the investor grievances was enclosed with SCN.
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f. In view of the above, it was alleged that the Noticee had failed to obtain the
SCORES authentication / furnish ATR and failed to resolve two investor
grievances, which are in violation of Section 15A (a) and 15C of the SEBI Act.
The provisions of Section 15A(a) and 15C of the SEBI Act are produced
hereunder;
Penalty for failure to furnish information, return, etc.
15A. If any person, who is required under this Act or any rules or regulations made
thereunder,
(a) to furnish any document, return or report to the Board, fails to furnish the same, he
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;

Penalty for failure to redress investors grievances.
15C. 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.


4. The said SCN was served upon the Noticee on August 05, 2013 through Hand
Delivery, however, no reply was received from the Noticee towards the SCN.
Thereafter, for the purpose of inquiry, an opportunity of hearing was granted to the
Noticee on October 28, 2013 vide notice dated October 09, 2013 which was
served through Hand Delivery. In the aforesaid notice, the Noticee was also inter-
alia advised to submit the reply towards SCN, and on failure to submit the reply,
the case would be decided as per the material available on records. However, the
Company neither appeared for the hearing nor responded to the allegations.
Considering the principle of natural justice, final opportunity of hearing was
provided to the Noticee on November 18, 2013 vide notice dated November 11,
2013 which was also served upon the Noticee through Hand Delivery on
November 12, 2013. The hearing on November 18, 2013 was attended by Mr.
Dinesh Kumar Seth Advocate (authorized Representative of the Noticee) and he
made following submissions;
(a) The reply towards the SCN is already dispatched through Regd. Post on November 14,
2013 by the Noticee.
(b) No Dividend or Bonus was issued /declared by the Noticee during the period as alleged in
the SCN.
(c) The reasons of such long delay in communicating to SEBI and the proof of communication
if any, by the Noticee to the Complainant in the matter would be submitted within a period
of one week.
(d) Our reply towards the SCN may be read as our submissions and no further opportunity of
hearing is desired in the matter.
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5. Here, it is relevant to mention that neither the reply of the Noticee towards the
SCN nor the reasons of delay in communicating to SEBI and the proof of
communication by the Noticee to the Complainant / Ms. Leela Kevalchand Gandhi
(which he agreed to submit the same within period of one week from the date of
hearing) is received till date. During the hearing, authorized representative failed to
submit a copy of reply which he was contending to have been forwarded to SEBI
on November 14, 2013 through Regd. Post. and also failed to produce dispatch
proof thereof.
Consideration of Issues and Finding:
6. It is observed from the records / Annexure B of the SCN that 2 complaints were
pending against the Noticee / Company. It is observed that Ms. Leela Kevalchand
Gandhi (Complainant) made two complaints viz. (1) compliant dated November
25, 2010 for non receipt of Bonus and (2) complaint dated December 03, 2010 for
non receipt of dividend.
7. It is also observed from the available records that SEBI in writing vide letter dated
January 11, 2013 and February 15, 2013, advised the Noticee to furnish the
authentication details for implementation of SCORES within 7 days from receipt of
letter as per the format / annexure enclosed with the said Circulars, to enable the
Noticee to view and resolve the investors grievances in SCORES. It is noticed that
vide said letter dated February 15, 2013, SEBI sought information from the
Noticee regarding SCORES authentication / ATR submission and reference of
SEBI Circular No. CIR/OIAE/2/2011 dated June 03, 2011 was given to the
Noticee, wherein it was categorically stipulated that all the companies which are
listed on any Stock Exchange (s), should view complaints pending against them
and submit ATR along with supporting documents electronically in SCORES. It
was also stipulated that failure on the part of the company to update the ATR in
SCORES, would be treated as non-redressal of investor's complaints. Further, a
reference of another SEBI Circular No. CIR/OIAE/1/2012 dated August 13, 2012
was given to the Noticee, wherein it was stipulated that all companies whose
securities are listed on the Stock Exchanges, are required to obtain SCORES
authentication by September 14, 2012. It was also stipulated therein that all
companies against whom complaints are pending on SCORES, are also required
to take appropriate necessary steps within 7 days of receipt of complaints, so as to
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resolve complaints within 30 days of its receipt and also keep the complainant duly
informed of the action taken thereon.
8. Available records reveal that SEBI also issued a Public Notice dated January 13,
2013 in the newspapers against those companies whose securities are traded on
the Stock Exchange(s) but not obtained SCORES authentication, and advised
them to obtain SCORES authentication within 7 days. In the said Public Notice,
reference of aforesaid SEBI Circulars dated June 03, 2011 and August 13, 2011
was given. The name of the Noticee / Company is also appearing in the said
Public Notice. It is further observed from the records that SEBI vide Circular No.
CIR/OIAE/1/2013 dated April 17, 2013 also advised the listed companies to obtain
SCORES authentication within one month from the date of said Circular.
9. In respect to the allegations, the Noticee at the time of hearing (through its
authorized representative) submitted that no dividend / bonus were
issued/declared by the Noticee during the period as alleged in the SCN. However,
no submissions were made by the Noticee in respect of activation of SCORES
authentication. Further, despite commitment made by the Noticee during the
hearing, no proof of communications by the Noticee to the aforesaid complainant
in respect of redressal of her grievances is received till date.
10. It is not out of place to mention that mere denial by the Noticee during the present
proceeding that it has not declared any dividend / bonus would not allow it to shirk
its responsibility which was casted upon it under section 15C of the SEBI Act.
Noticee was under an obligation to inform / respond to the aforesaid complainant
for redressal of her grievances which it had failed to do so as no proof has been
received from it till date. Further, the Noticee also failed to respond to the SEBI's
aforesaid communiqu dated January 11, 2013 and February 15, 2013 / Circulars
/ Public Notice. Therefore, it is established that the Noticee had failed to redress
the grievances of the complainant as alleged.
11. As observed above, neither any submissions were made by the Noticee during the
hearing regarding obtaining SCORES authentication nor any evidence thereof is
received till date, which clearly shows that the Noticee had failed to obtain
SCORES authentication / submission of ATR report as required by SEBI. The fact
cannot be ignored that being a listed company, the Noticee was under an
obligation to respond / comply with the aforesaid letters dated January 11, 2013 &
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February 15, 2013 / Circulars / Public Notice issued by SEBI. Such failure (non
activation of SCORES and non submission of ATR report) is in violation of section
15 A (a) of the SEBI Act.
12. In view of aforesaid observations, available records and in absence of any
documentary evidence from the Noticee to refute the allegations, it is concluded
that the Noticee had not only failed to obtain the SCORES authentication / failed to
submit the ATR as required, but also failed to resolve the long pending grievances
of the aforesaid complainant. Accordingly, I am of the opinion that the Noticee had
failed to abide by the directives issued in SEBI Circular No. CIR/OIAE/2/2011
dated June 03, 2011, Circular No. CIR/OIAE/1/2012 dated August 13, 2012,
Circular No. CIR/OIAE/1/2013 dated April 17, 2013, Public Notice and
communiqu / letters dated January 11, 2013 & February 15, 2013 of the SEBI,
and thereby violated the section 15 A (a) and 15 C of the SEBI Act.
13. For determining the quantum of penalty under Section 15 A (a) and Section 15 C
of the SEBI Act, the factors stipulated in section 15 J of the SEBI Act, have been
taken into consideration which are reproduced 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.

Order:
14. In view of the above, after considering all the facts and circumstances of the case
and exercising the powers conferred upon me under Section 15 I of the SEBI Act
and Rule 5 of the Adjudication Rules, I hereby impose a penalty of ` 2,00,000/-
(Rupees Two Lakh only) under the provisions of Section 15 A (a) of the SEBI Act
and ` 1,00,000/- (Rupees One Lakh only) under the provisions of Section 15C of
the SEBI Act, on the Noticee, thereby resulting into consolidated penalty of `
3,00,000/- (Rupees Three Lakh only). I am of the view that the said penalty would
commensurate with the aforesaid failure committed by the Noticee (Gloria Leasing
Ltd.).
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15. 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 Demand Draft shall be forwarded to the
Deputy General Manager (OIAE), Securities and Exchange Board of India, SEBI
Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai
400 051.
16. Copy of this order is being sent to the Noticee (Gloria Leasing Ltd.) and also to the
Securities and Exchange Board of India, in terms of Rule 6 of the Adjudication
Rules.

Date: August 06, 2014 D. RAVI KUMAR
Place: Mumbai CHIEF GENERAL MANAGER &
ADJUDICATING OFFICER

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