JUDGMENT
N.K. Sodhi, J. (Presiding Officer)
1. The Securities and Exchange Board of India (for short “the Board”) carried out investigations in the trading of the scrip of Soundcrafts Industries Ltd. (for short “the company”). During the course of the investigations, it transpired that a group of persons including the appellant had traded in the scrip of the company with a view to rig the price of the scrip and that they also created artificial volumes. In order to carry out the investigations, the investigating officer called upon the appellant to furnish some information on certain points the details of which were referred to in the annexure to the summons issued to the appellant on 21st June, 2004. We have perused the annexure and find that the investigating officer wanted to know from the appellant the source of her income as per her last income tax returns and also the loans taken by her during the relevant period and the names and addresses of those who had advanced the loans. She had also been called upon to furnish the names and addresses of the brokers/sub brokers through whom she had traded in the scrips of the company. Apart from this, information had also been sought on several other issues. The appellant was required to furnish the information by 30.06.2004. It is common case of the parties that the summons had been issued on the address furnished by the appellant to her broker. She did not respond to the summons issued on 21.06.2004. The investigating officer then issued another summons on 16.07.2004 calling upon the appellant to furnish the information by 26.07.2004. She did not respond. Another summons issued on 24.08.2004 was also not complied with and eventually a notice was issued to the appellant on 25.10.2004 to appear in person on 24.11.2004 so that her statement could be recorded on oath. The notices and the summons were not responded to and the investigating officer made a report to the Board accordingly. The Board then appointed an Adjudicating Officer on 03.03.2005 who issued a notice to the appellant on 08.04.2005 to show cause why an enquiry be not held and to show cause why penalty be not imposed on her for violating the provisions of section 11C of the Securities and Exchange Board of India Act, 1992 (for short “the Act”). There was no response from the side of the appellant and, therefore, the Adjudicating Officer issued yet another notice on 09.05.2005 requiring the appellant to appear on 20.05.2005. This, too, was ignored by the appellant and thereafter another notice dated 05.07.2005 was issued to her to appear on 19.07.2005. She did not respond to this notice either. The adjudicating officer was left with no choice but to proceed ex-parte. By his order dated 25.08.2005 he found that the appellant failed to appear before the investigating officer in response to the summons issued to her and, therefore, she violated the provisions of the Act and the regulations framed thereunder and accordingly imposed a penalty of Rs. 50,000/-. It is against this order that the present appeal has been filed.
2. We have heard the learned Counsel for the parties and are of the view that the Adjudicating Officer has already taken a very lenient view in the matter and that no interference is called for. From the facts narrated herein above it is clear that on several occasions when summons were issued to the appellant she did not respond and thereby withheld from the Board material information that was necessary to carry out the investigations into the trading of the scrip of the company. It is to be borne in mind that if intermediaries of the market or persons associated therewith fail to respond to summons and do not furnish the information sought from them, they hamper the Board – the statutory regulator from carrying out its statutory obligations under the Act. By not disclosing the information sought from her, the appellant may have withheld material and sensitive information and therefore the matter has to be viewed seriously. As already observed, the Adjudicating Officer has taken a lenient view by imposing a nominal penalty of Rs. 50,000/- only. We do not find any justification to interfere with the said order.
3. In the result, the appeal fails and the same stands dismissed. No costs.