Principle of rule of beneficial construction of ex post facto law to mitigate the rigour of lawreiterated by SEBI
SEBI has imposed a total penalty of Rupees Three Lakhson Osian Industries Limited (Noticee/Company) for the non-compliance of certain SEBI circulars which pertained to the directions made to all listed companies to obtain SEBI Complaints Redressal System (SCORES) authentication and redress any pending investor grievances in that platform only.
It had been alleged that the Company had failed to redress investor grievances pending therein and to submit the Action Taken Report (ATR) duly supported by documentary evidence in respect of the pending complaints, even after obtaining SCORES authentication within the timelines stipulated by SEBI, therefore not complying with the aforesaid SEBI Circulars.
The Adjudicating Officer while proceeding ex-parte in this matter has opined that SEBI had forewarned the Noticee repeatedly through issue of various Circulars and in letters in the matter but the Noticee which was a listed company at the relevant period of time did not pay heed to the same and consistently failed and neglected to comply with the SEBI Circulars for redressing pending grievances of the investors. Further, this proceeding was initiated, inter-alia, on the allegation that forty-one grievances of investors were pending for redressal. These complaints too have not been resolved by the Noticee till date.
SEBI is inter alia entrusted with the task of ensuring speedy resolution of investor grievances and to achieve the same, SEBI has provided a centralized web portal viz. SCORES wherein unresolved grievances pertaining to securities market are registered.
The Noticee very clearly failed to redress the investor grievances which were pending on the date of initiation of the instant proceedings within the time period stipulated under the SEBI Circulars .Hence this non-compliance to SEBI circulars dated August 13, 2012 and April 17, 2013 has rendered the Noticee liable for penalty under section 15 C of the SEBI Act.Not only this but the Noticee had also failed to submit its Action Taken Report with respect to the said pending grievances of investors to SEBI within the prescribed period of time as was stipulated which has made the Company liable for penalty under section 15A(a) of the SEBI Act.
With respect to the issue that as per the dates of defaults, Section 15C and Section 15A (a) of SEBI Act, as they stood prior to their amendments, respectively, are applicable for non-redressal of grievances and for not submitting the ATR, respectively, the Regulator has been guided by the principle of rule of beneficial construction of even ex post facto law to mitigate the rigour of law, as laid by the Hon'ble Supreme Court in T. Barai vs. Henry Ah Hoe and Ors. (07.12.1982).
Thus, it has observed that the amended version of section 15C and section 15A (a) of SEBI Act is applied for the investor grievance which was not redressed during the stipulated period of time and for the failure to submit ATR on time or at all.