BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

ADJUDICATION ORDER NO. PJ/VP/16/2016
______________________________________________________________
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 Vishva Electronics India Limited
(PAN Not Available)
In the matter of M/s Vishva Electronics India 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 Vishva Electronics India Limited (hereinafter
referred to as the Noticee/ Company) has failed to comply with the said
provisions.

Adjudication Order in respect of M/s Vishva Electronics India Limited

Page 1 of 11

2. SEBI observed from SCORES that one (1) complaint was filed by the
investor. The said complaint was not resolved within the specified time in
terms of SEBI Circular No. CIR/OIAE/1/2012 dated August 13, 2012. The
same was also communicated to the Noticee by SEBI vide its letter Ref. No.
OIAE-1/AS/77/2014 dated 01.01.2014. (Inadvertently mentioned as dated
18.11.2014 in the Show Cause Notice).
3. It was therefore alleged that, the Noticee has failed to obtain SCORES
authentication and also failed to resolve the investor complaint 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
29.12.2015 under 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/VRP/1157/2016 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 HB and Section 15C of SEBI Act for the
Adjudication Order in respect of M/s Vishva Electronics India Limited

Page 2 of 11

alleged violation of provisions of the circular by not obtaining SCORES

authentication and failing to redress one (1) investor complaint within the
prescribed time. The SCN was sent by email and the same was delivered.
6. The Noticee vide its letter dated 15.01.2016 submitted its reply to the SCN the
same is reproduced as under:
Please refer to your email, it is not clear from the email as to what one complaint as shown in
the Annexure-5 of you notice. We have not received copy of any complaint from your office, if
on receipt we immediately reply to the complaint, with copy marked to SEBI.
We request you good self to please send us copy of one complaint as shown at serial no. 21 of
Annexure-5 for us to know what the complaint details are and the complainants grievances
are.
We would like to inform to SEBI that our company has made reference with BIFR since
2001, the order for declaration of rehabilitation is awaited. Presently the company has no
staff, no power, no water connection and closed.
The company has regularly have got accounts audited and held general meetings. As we are
not aware of the nature of complaint, we cannot reply to the point of the complaint.
7. Thereafter, an opportunity of personal hearing was granted on 23.03.2016 vide
hearing notice dated

16.03.2016 forwarding copies of Action History,

Complaint details, Complaint report, reminders from complainant, complaint

attachments document and second reminder letter. Mr. Girdharilal B Nayyar,
Managing Director of the Company appeared at the hearing on 23.03.2016 and
submitted that they had not taken SCORES authentication for the reasons
stated in their replies dated 18.03.2016 and further submitted that, they have
not received any letter from SEBI during the year 2014 in respect of SCORES.

Adjudication Order in respect of M/s Vishva Electronics India Limited

Page 3 of 11

8. The Noticee vide letter dated 18.03.2016 submitted as follows:

We would like to appraise you honour that the said share certificate are not received by the
company. The share certificate, may have been returned to Shri L K Ruwatia, or lost in
transit.
We will issue duplicate certificate of the same no. and quantity 900 shares, on Shri L K
Ruwatia completing the lost share certificate formalities.
Our company reference is registered with BIFR since 11.11.2002, case No. 39/2003. The
case is under consideration for rehabilitation, the company presently is sick unit.
Hence we humbly request you to please condown the lapse if any, we are prepare to give fresh
share certificate. Please consider you humble request and oblige.
The Noticee has enclosed the document dated 22.01.2003 issued by BIFR
directing the reference received on 11.11.2002 stands registered as Case No.
39/2003. Further, the Noticee had enclosed letter dated 18.03.2016 issued by
them to the investor how had made the complaint regarding non-transfer of
share in his name.
CONSIDERATION OF ISSUES
9. 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 had non-redressed 1(one) investor complaint.
10. The issues that, therefore, arise for consideration in the present case are:
10.1. Whether the Noticee has violated the provisions of Circular viz., SEBI
Circular No. CIR/OIAE/1/2012 dated August 13, 2012 by failing to
obtain SCORES authentication?

Adjudication Order in respect of M/s Vishva Electronics India Limited

Page 4 of 11

10.2. Whether the Noticee has violated the provisions of Circular viz., SEBI
Circular No. CIR/OIAE/1/2012 dated August 13, 2012 by failing to
redress one investor complaint within the prescribed time?
10.3. Does the violation, if any, attract monetary penalty under Section 15 HB
and 15C of SEBI Act?
10.4. 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
11. 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 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.

----------------------------------------------------------------------------------------

Adjudication Order in respect of M/s Vishva Electronics India Limited

Page 5 of 11

12. The first issue for consideration is whether the Noticee has failed to obtain
SCORES authentication within the prescribed time. I find from the website
www.scores.gov.in that the Noticee was listed on Bombay Stock Exchange
Limited which was compulsory delisted on 02.07.2004 and was listed on Delhi
Stock Exchange and the current status is the scrip is suspended. 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
did not comply with the said SEBI circular. The Noticee has admitted in the
hearing conducted on 23.03.2016 that had not taken SCORES authentication
for the reasons stated in their replies dated 18.03.2016. I find from the said
reply that the Noticee had sent a reference to BIFR for rehabilitation and a
case has been registered and thus the Noticee is submitting that they are a sick
company and their company is not in operation. Further, the Noticee
submitted that they would resolve the pending investor complaint. In view of
the above admission I find that the Noticee has not complied with the SEBI
Circular No. CIR/OIAE/1/2012 dated August 13, 2012 by failing to obtain
SCORES authentication.
10. In view of the facts of the matter, I rely on the case of M/s Port Shipping
Company Limited, The Hon'ble Securities 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
Adjudication Order in respect of M/s Vishva Electronics India Limited

Page 6 of 11

company to obtain SCORES authentication 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 SEBI therefore, 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 second issue for consideration is whether the Noticee has violated the
provisions of Circular viz., SEBI Circular No. CIR/OIAE/1/2012 dated
August 13, 2012 by failing to redress one investor complaints within the
prescribed time which attract monetary penalty under Section 15C of SEBI
Act. I find from the plain reading of section 15 C which says that, 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 investor, 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. Thus, I find that one of the paramount ingredients of section 15 C is that,
the entity has to be called upon by the Board in writing to redress the
grievances of investor then the entity is liable for a monetary penalty. In the
case in hand the letter Ref. No. OIAE-1/AS/77/2014 dated 01.01.2014
issued by SEBI calling upon the Noticee to redress the investor complaints
was not delivered. Further, the Noticee in its hearing has also submitted that
they have not received any letter from SEBI during the year 2014 in respect of

Adjudication Order in respect of M/s Vishva Electronics India Limited

Page 7 of 11

SCORES. Thus, I find from the above facts that, the service of letter dated
01.01.2014 was not a good service in terms of following Judgments:
12.1. The Hon'ble Securities Appellate Tribunal, in Alka India Ltd. Vs.
SEBI (Order dated June 10, 2009) inter alia, observed as follows:
"A copy of the courier receipt has been placed on record to substantiate its stand. We
have perused this receipt. In the column meant for the name of the receiver, the Stock
Exchange, Mumbai has been written. The Bombay Stock Exchange has categorically
denied having received any information from the appellant. In view of the denial made
by the Bombay Stock Exchange, the onus is upon the appellant to establish that the
letter making the necessary disclosures allegedly sent by courier was actually received by
the Bombay Stock Exchange. No such evidence has been placed on record. Even, if
we were to accept the courier receipt, it is only evidence of the fact that some letter was
sent to Bombay Stock Exchange but there is no proof forthcoming of its actual receipt
by the Stock Exchange. Moreover, what was that letter and whether it contained the
disclosures are facts which also need to be established. The appellant failed to discharge
this onus...... In view of this matter, no fault can be found with the impugned order."
12.2. The Honble SAT, in Kalinidee Rail Nirman Ltd. Vs SEBI dated
19.07.2010 wherein it was held as follows:
the agency through which the document is sent acts as an agent of the
sender and if a dispute were to arise whether the said document has been received by
the addressee or not, the onus would be on the sender to establish the fact by clear and
cogent evidence in this regard. Admittedly, the appellant has not placed on record any
acknowledgement received from BSE in regard to the mails that were allegedly sent
containing the compliance reports. On the other hand, we have on record a letter from
BSE specifically stating that it had not received the compliance reports for the

Adjudication Order in respect of M/s Vishva Electronics India Limited

Page 8 of 11

aforesaid quarters from the appellant. . In view of the matter, no fault could
be found with the impugned order.
12. In view of the above fact and the judgments cited I absolve the Noticee from
the charge that they have violated the provisions of the said Circular by failing
to redress one investor complaint within the prescribed time.
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
provisions of the said Circular by not obtaining SCORES authentication.
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 of the SEBI Act, which reads 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 there under 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.

Adjudication Order in respect of M/s Vishva Electronics India Limited

Page 9 of 11

16. While determining the quantum of monetary penalty under Section 15 HB of

SEBI Act, I have considered the factors stipulated in Section 15-J of SEBI
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. 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 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 Rs 1,00,000/-(Rupees One lac only) under Section 15
HB on the Noticee i.e. M/s Vishva Electronics India Limited, which in my
opinion, will be commensurate with the violation committed by the Noticee.
Adjudication Order in respect of M/s Vishva Electronics India Limited

Page 10 of 11

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 N Hariharan, 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: 30.03.2016

Prasad P. Jagadale

Place: Mumbai

Adjudicating Officer

Adjudication Order in respect of M/s Vishva Electronics India Limited

Page 11 of 11