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BEFORE THE ADJUDICATING OFFICER


SECURITIES AND EXCHANGE BOARD OF INDIA
[ADJUDICATION ORDER NO.OIAE/VSL/AO/DRK-DS/EAD-3/ 572/ 116-14]
UNDER SECTION 15-I OF SECURITES AND EXCHANGE BOARD OF INDIA ACT,
1992 READ WITH RULE 5 OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND
IMPOSING PENALTIES BY ADJUDICATING OFFICER) RULES 1995
In respect of:
Vakrangee Softwares Limited
[PAN No. : AAACV9920D]
Vakrangee House
66 Marol Co-op Industrial Estate
Off M V Road, Marol, Andheri East
Mumbai- 400059
___________________________________________________________________

FACTS OF THE CASE IN BRIEF
1. Securities and Exchange Board of India (hereinafter referred to as SEBI)
observed that Vakrangee Softwares Ltd. (hereinafter referred to as "VSL"/
"Noticee"/ "the company") had failed to redress the investor grievances.

APPOINTMENT OF ADJUDICATING OFFICER
2. The undersigned was appointed as Adjudicating Officer under Section 15-I of the
Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the
"SEBI Act") read with Rule 3 of the Securities and Exchange Board of India
(Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer)
Rules, 1995 (hereinafter referred to as the "Rules") and the same was
communicated vide proceedings of Whole Time Member appointing Adjudicating
Officer dated May 10, 2013, to inquire into and adjudge under Section 15C of the
SEBI Act, for the alleged non-redressal of investor grievances.




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SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

3. A Show Cause Notice no. A&E/EAD/DRK-BM/18310/2013 dated J uly 23, 2013
(hereinafter referred to as "SCN") was served on the Noticee by HDAD in terms
of the provisions of Rule 4 of the Rules requiring the Noticee to show cause as to
why an inquiry should not be held against the Noticee and why penalty, if any,
should not be imposed on the Noticee under Section 15C of the SEBI Act for the
non-redressal of investor grievances inspite of being called upon by SEBI to do
so in writing.

4. In the said SCN, it was alleged that Noticee was informed vide letter dated
J anuary 22, 2013 that 10 investor complaints were pending against it in the
SCORES and was advised/ directed to take the step within seven days so as to
redress the complaints within thirty days of the receipt of the letter. As 9
grievances remained unresolved, Noticee was reminded vide letter dated
February 15, 2013 to redress the pending complaints and submit action taken
report. It was also informed vide this letter that a company must submit its action
taken report within 7 days of receipt of complaint through SCORES and the
complaint must be resolved within a period of 30 days, failing which SEBI may
initiate Regulatory action against the company which includes debarring from
securities market and/ or imposing penalty. Vide another reminder dated March
8, 2013, SEBI informed that the performance of the Noticee is not satisfactory
and was reminded to redress the 6 pending complaints. It was observed the
noticee had neither replied to the aforesaid letters dated J anuary 22, 2013,
February 15, 2013 and March 8, 2013 nor redressed the investor grievances
within the stipulated time inspite of being called upon by SEBI in writing to do so.
Further, it is observed that as on May 24, 2013 there were 5 investor grievances
pending against the Noticee in SCORES for more than 30 days out of which two
grievances were pending for more than two years.

5. In response to the SCN, Noticee submitted its reply vide email as well as letter
dated August 13, 2013 stating that:

Complainant Complaint Details
Action taken by
the company
Remarks

Vinay Lohia
Non-receipt of
shares in public/
We had attached an
online transaction
Not a shareholder
from J une 8, 2012.
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rights issue report evidencing
the proof of credit of
shares in his
account on
SCORES
We had sent an
explanation
regarding his query
and also a mail
asking for
confirmation from
the complainant, but
the company failed
to receive any reply
from the
complainant.
Shankar Raman
1.Bonus got
credited
2. Bonus value is
not credited.
We have attached
form 2 filed with the
registrar of
companies
alongwith the list of
allottees including
the name of the
complainant on
SCORES
The complaint of
Shankar Raman is
not genuine since
the bonus issue was
given in the ratio of
1:1, thus there was
no fractional amount
which was payable
to him.
Shah Mona Kumari
Non-receipt of
bonus
Telephonic
conversations were
taking place
between the
complainant and the
company. The
company had asked
for bank verification
and address proof
from the
complainant from
which the
complainant has
only submitted bank
verification on J uly
29, 2013.
We have called the
complainant on
30.07.2013 after
receipt of bank
verification from the
complainant and
requested for the
address proof, after
receipt of which
necessary action
will be taken.
MC Sheth
Non-receipt of
bonus
The RTA of the
company had sent a
reply to the
complainant
The shares were
transferred in the
name of Mr.
Kalpesh T. Parikh.
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regarding his query,
the reply letter
alongwith the
dispatch proof is
attached on
SCORES
MC Sheth
Non-receipt of
dividend
We have attached
the confirmation
mail as received
from the bank
confirming the
payment of the
dividend to the
complainant on
SCORES
Our RTA has
already given reply
regarding the
complaint. Since the
shares were in the
name of Kalpesh T.
Parikh, the
dividends were paid
to him.

6. An opportunity of hearing was granted to the Noticee vide hearing notice dated
November 13, 2013 to appear before the undersigned for personal hearing on
November 28, 2013 at 15:00 hrs. at SEBI Bhavan, Mumbai. Noticee vide its letter
dated November 27, 2013 requested for a later date for the personal hearing.
Acceding to the request of the Noticee, final opportunity of hearing was granted
to the Noticee vide hearing notice dated J anuary 3, 2014 to appear before the
undersigned on J anuary 22, 2014 at 12:30 hrs. at SEBI Bhavan, Mumbai.
Noticee vide its letter dated authorized Ms. Darshi Shah, Company Secretary of
the Noticee and Mr. Kamlesh Singh, Sr. Manager as its Authorized
Representatives (ARs). During the course of the hearing, ARs while reiterating
the submissions made vide reply dated August 13, 2013, further stated that as of
now no investor complaints are pending.

CONSIDERATION OF EVIDENCE AND FINDINGS

7. I have taken into consideration the facts and circumstances of the case and the
material made available on record.

8. On perusal of the records, it is noted that five complaints were pending against
the Noticee, the details are given as follows:


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Name Category Date Days (pending)
Vinay Lohia Non- receipt of shares in
Public/ Rights issue
17.04.2012 408
Shankar Raman Others 20.06.2012 344
Shah Mona kumari No-receipt of bonus 31.01.2013 119
MC Sheth No-receipt of bonus 03.05.2013 27
MC Sheth Non-receipt of dividend 03.05.2013 27


9. With respect to the complaint of Mr. Vinay Lohia, Noticee states to have
submitted an online transaction report evidencing the proof of credit of shares in
his account. It can be seen from the copy of the transaction page of BO account,
that on April 17, 2012, 50 bonus shares were credited into the account of the
complainant. Noticee had also written a letter dated April 26, 2012 to the Noticee
stating that "the shares were allotted on 14.04.2012 to the eligible share holders, the
same became tradable with effect from 19.04.2012, before which the bonus shares
could not be sold. Mr. Lohia seems to have sold the bonus shares before the
same got credited in his account, and that is the only reason why the bonus shares got
auctioned". From these letters it can be seen that the Noticee had credited/
transferred the shares on April 17, 2012 itself. Noticee had also written an email
dated November 23, 2012 to the complainant stating that "if your grievance is still
unresolved, you may kindly furnish us a letter giving the complete details of your query/
complaint to enable us to investigate and reply". No records are made available to
show that the complainant has reverted.

10. With respect to the complaint of Mr. Shankar Raman, Noticee has produced the
list of allotees, where complainant was allotted 2870 shares. Noticee vide its
email dated November 23, 2012 had stated that as the matter is five months old,
we trust the same might have been resolved by now. However, "if your
grievance is still unresolved, you may kindly furnish us a letter giving the complete
details of your query/ complaint to enable us to investigate and reply". No records are
made available to show that the complainant has reverted.

11. With respect to the complaint of Shah Mona Kumari, Noticee in its reply has
stated that it had asked for bank verification and address proof from the
complainant from which the complainant has only submitted bank verification on
J uly 29, 2013. Further the Noticee had called the complainant on 30.07.2013
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after receipt of bank verification from the complainant and requested for the
address proof, after receipt of which necessary action will be taken.

12. With respect to the complaint of Mr. MC Sheth regarding non-receipt of bonus
shares, the Noticee had stated that the RTA of the company had sent a reply
dated May 8, 2013 to the complainant regarding his query. However, SEBI -
Office of Investor Assistance and Education (OIAE) has confirmed that the said
complaint has been resolved.

13. With respect to the another complaint of Mr. MC Sheth regarding non-receipt of
dividend, Noticee had submitted a letter dated May 8, 2013 stating that the
"dividend warrants for the financial- year 2007 to 2010 have already been
dispatched to Mr. Kalpesh T Parikh (KTP). The Noticee has submitted the
dispatch proof of this letter. Noticee has also submitted the confirmation emails
dated August 13, 2013 and August 6, 2013 as received from the bank confirming
the payment of the dividend to KTP. These email shows the paid status of the
dividend warrant to KTP.

14. Further, a confirmation was sought from OIAE as to whether the aforesaid
complaints have been resolved or not on SCORES and OIAE via e-mail dated
August 06, 2014 confirmed that all the complaints have been resolved by the
Noticee.

15. In light of the above discussions, it can be seen that the Noticee has resolved all
the complaints but with delay. Therefore the charge of violation of Section 15C is
established against the Noticee.

16. The Honble Supreme Court of India in the matter of SEBI Vs. Shri Ram Mutual
Fund held that once the violation of statutory regulations is established, imposition of
penalty becomes sine qua non of violation and the intention of parties committing such
violation becomes totally irrelevant. Once the contravention is established then the
penalty is to follow.

17. The provisions of sections 15C of SEBI Act are reproduced hereunder:
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,
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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.

18. While determining the quantum of monetary penalty, it is important to consider
the factors stipulated in section 15J 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.

19. 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 delay on the part of
the noticee to redress the investor grievances are not available on record.
Further, it may also be added that it is difficult to quantify the unfair advantage
made by the noticee or the loss caused to the investors in a default of this nature.

20. Having considered the facts and circumstances of the case, submissions made
by the noticee and after taking into account the factors under Section 15J of the
SEBI Act, 1992, I find that a penalty of ` 2,00,000 /-(Rupees Two Lakhs Only)
under Section 15C of the SEBI Act on the Noticee would commensurate for delay
in redressing investor grievances.

ORDER
21. In exercise of the powers conferred under Section 15-I of the Securities and
Exchange Board of India Act, 1992, and Rule 5 of Securities and Exchange
Board of India (Procedure for Holding Inquiry and Imposing Penalties by
Adjudicating Officer) Rules, 1995, I hereby impose a penalty of ` 2,00,000 /-
(Rupees Two Lakhs Only) on Vakrangee Softwares Ltd. in terms of the
provisions of Section 15C of the Securities and Exchange Board of India Act,
1992 for the non redressal of the complaints. In the facts and circumstances of
the case, I am of the view that the said penalty is commensurate with the delay in
redressal of the investor complaints.
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22. The penalty shall be paid by way of Demand Draft drawn 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 shall be forwarded to Chief
General Manager- OIAE, Securities and Exchange Board of India, Plot No. C4-A,
G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400051.


23. In terms of the provisions of Rule 6 of the Securities and Exchange Board of
India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating
Officer) Rules 1995, copy of this order is being sent to Vakrangee Softwares Ltd.
and also to Securities and Exchange Board of India Mumbai.





Place: Mumbai D. RAVI KUMAR
Date: August 07, 2014 CHIEF GENERAL MANAGER &
ADJUDICATING OFFICER

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