Proof of allegations levelled against a person may be direct and substantive or inferred by reasoning

Proof of allegations levelled against a person may be direct and substantive or inferred by reasoning

Securities and Exchange Board of India (SEBI) initiated adjudication proceedings against 14 Noticees pursuant to an investigation into the trading of Super Sales India Ltd. (SSIL or company). SEBI had conducted investigation into the trading activities of the Bharat Patel Group entities in the scrip of SSIL during the period between December 15, 2011 to October 09, 2014 (investigation period or IP).

It was alleged that the Noticee No.14 had violated the provisions of Section 12A (a), (b) and (c) of SEBI Act, 1992 r/w Regulations 3(a) (b) (c) (d) (e) and 4(1) and 4(2)(a) and (g) of the PFUTP Regulations. In addition to this, it was alleged that Noticee No.14 failed to exercise due skill and care in terms of Clause A(2) of the Code of Conduct for Stock Brokers as specified under Schedule II read with Regulation 7 of SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (w.e.f. Sept. 27, 2013, Regulation 7 became Regulation 9).

The judgment of the Hon'ble Supreme Court in the matter of SEBI v. Kishore Ajmera was referred to wherein it was held that it is a fundamental principle of law that proof of an allegation levelled against a person may be in the form of direct substantive evidence or, as in many cases, such proof may have to be inferred by a logical process of reasoning from the totality of the attending facts and circumstances surrounding the allegations/charges made and levelled.

The Adjudicating Officer opined that it was established that some of the Noticees violated Regulations 13 (1) and 13 (3) read with 13(5) of the PIT Regulations, when their acquisitions crossed 5% and on account of subsequent change in shareholding of 2% or more of the shareholding of TIL during the investigation period.

It was established that few of the Noticees violated Regulations 13(1), 13 (3) read with 13(5) of the PIT Regulations, while few of them as PACs belonging to Bharat Patel Group entities violated Regulations 29 (1) and (2) read with (3) of the SAST Regulations. Noticees 1-4, 7-10, 12 and 13 were held to be liable for imposition of monetary penalty under Section 15A(b) of SEBI Act.