In the matter of SCORES Adjudications - Adjudication Order No.

: SM/AO–8/2014 dated August 12, 2014
Adjudication Order in the matter of Hatigor Tea Estates Limited. Page 1 of 6
BEFORE THE ADJUDICATING OFFICER
SECURITIES AND EXCHANGE BOARD OF INDIA
(ADJUDICATION ORDER NO.: SM/AO–8/2014)
_______________________________________________________________________________
UNDER SECTION 15 - I OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT,
1992 READ WITH RULE 5 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
(PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES BY
ADJUDICATING OFFICER) RULES, 1995.
In respect of:
HATIGOR TEA ESTATES LIMITED
(PAN AAACH6672G)

In the matter of SCORES

Background:

1. Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) vide
Circulars No. CIR/OIAE/1/2012 dated August 13, 2012 and CIR/OIAE/1/2013
dated April 17, 2013 had directed all listed companies to obtain SEBI Complaints
Redressal System (SCORES) authentication and also redress the pending
investor grievances within the stipulated time period.

2. SEBI observed that certain companies including Hatigor Tea Estates
Limited(hereinafter referred to as 'the Noticee/the Company') had neither
obtained the SCORES authentication nor redressed the grievance of investor(s)
and therefore, had failed to comply with the aforesaid SEBI Circulars

3. Thereafter, vide letter dated July 18, 2013, the aforesaid companies were again
advised to submit the requisite information regarding SCORES authentication and
redress the pending investor complaints by August 05, 2013. However, the
Noticee once again failed to comply with the SEBI directive.

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4. Based on the aforesaid observations, it was alleged that by failing to obtain
SCORES authentication and to redress the pending investor grievances,the
Noticee has violated the aforesaid SEBI Circulars No. CIR/OIAE/1/2012 dated
August 13, 2012 and CIR/OIAE/1/2013 dated April 17, 2013. The alleged violation,
if established, makes the Noticee liable for monetary penalty under Sections 15HB
and 15C of the Securities and Exchange Board of India Act, 1992 (hereinafter
referred to as ‘SEBI Act’).

Appointment of Adjudicating Officer:

5. The undersigned was appointed as Adjudicating Officer under section 15-I of the
SEBI Act read with Rule 3 of the SEBI (Procedure for Holding Inquiry and
Imposing Penalties by Adjudicating Officer) Rules, 1995 (hereinafter referred to as
‘Adjudication Rules’), to inquire into and adjudicate under Section 15HB and
15C of the SEBI Act, the alleged violations by the Noticee.

Show Cause Notice, Reply of Noticee and Personal Hearing:

6. A Show Cause Notice SEBI/ERO/SM/ADJ/3419/2014 dated January 30, 2014
(hereinafter referred to as “SCN”) was issued to the Noticee under Rule 4 (1) of
the Adjudication Rules, to show cause as to why an inquiry be not held against the
Noticee and penalty be not imposed under Sections 15HB and 15C of the SEBI
Act, for the violations alleged to have been committed by the Noticee, namely,
failure to obtain SCORES authentication and failure to redress investor grievance.
The copies of the documents/evidence relied upon in the SCN were provided to
the Noticee along with the SCN.

7. The Noticeesubmitted their reply to the SCN vide letter dated February 13, 2014.
Thereafter, the Noticee was granted an opportunity of personal hearing on April
25, 2014. Shri Vinod Agarwal, the Authorized Representative (AR) of the Noticee
appeared for the hearing, and made submissions on behalf of the Noticee,
reiterating the earlier written submissions.

8. The submissions made by the Noticeeare summarized below:
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In the matter of SCORES Adjudications - Adjudication Order No.: SM/AO–8/2014 dated August 12, 2014
Adjudication Order in the matter of Hatigor Tea Estates Limited. Page 3 of 6
The Noticeestated that the securities of the company are not listed under any
stock exchange and hence, they were not required to comply with the
directions of SEBI issued under the said Circulars. To substantiate the
aforesaid contentions, the MCA data printout was also enclosed.
However, company was shown as listed in the Calcutta Stock Exchange but
the shares of the Noticee have been stopped from trading for last several
years.
The Noticee had now sent the requisite data to SEBI on April 09, 2014 and
received the SCORES authentication on April 15, 2014.

Consideration of Issues and Finding:

9. I have examined the SCN, and other documents available on record.

10. The issues that arise for consideration in the present case are :
a) Whether the Noticee by failing to obtain SCORES authentication and by failing
to redress the investor grievances has violatedthe aforesaid SEBI Circulars?
b) Does the violation, if any, on the part of the Noticee attract monetary penalty
under Sections 15HB and 15C of the SEBI Act?
c) If so, what would be the monetary penalty that can be imposed taking into
consideration the factors mentioned in Section 15J of the SEBI Act?

11. It is observed from the records that SEBI had advised the Noticee to furnish the
authentication details for implementation of SCORES within a specific time period
as per the format/annexure enclosed with the said Circulars (in both hard copy
and soft copy) and toresolve the investors grievances in SCORES. It was also
stipulated that failure on the part of the company to update the ATR in SCORES,
would be treated as non-redressal of investors' complaints.

12. In the instant case, it is noted that the Noticee had not complied with the aforesaid
SEBI Circulars. The plea taken by the Noticee that they were an unlisted company
and hence outside the ambit of the aforesaid SEBI Circulars is not tenable since
by their own admission, they were shown as listed at the Calcutta Stock
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Exchange. Moreover, the Noticee did furnish the requisite details to SEBI, albeit
with considerable delay and was provided the SCORES authentication on April
15, 2014. It is also observed that there was one complaint pending against the
Noticee.

13. Based on the material on record, I am of the view that the violation is established
against the Noticee since they had not complied with the requirements of
SCORES within the given time period. The statement that the Noticeewere
ignorant of the listing status/regulatory provisions is not justified. It is a well
established legal maxim that "Ignorantiajuris non excusat", or "ignorance of the
law excuses no one". A listed company is expected to comply with the extant
regulatory and statutory requirements. I find that in the instant matter, the Noticee
failed to exercise reasonable care and diligence in discharge of its duty as a listed
company and therefore is liable for penalty.

14. In view of the above and also taking into account the available material on
records, I am of the opinion that the Noticee had failed to abide by the directives
issued by SEBI vide Circulars No. CIR/OIAE/1/2012 dated August 13, 2012 and
No. CIR/OIAE/1/2013 dated April 17, 2013, and thereby violated Sections 15HB
and 15C of the SEBI Act and had neither obtained the SCORES authentication
nor redressed the grievance of investor(s) and had failed to submit the information
within the stipulated time. Therefore, the alleged violation of the provisions of the
aforesaid SEBI Circulars by the Noticee as specified in the SCN stand
established.

15. The Hon’ble Supreme Court of India in the matter of SEBI Vs. Shri Ram Mutual
Fund [2006] 68 SCL 216(SC) and (2006) 131 Comp. Cas. 591 (SC) 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.

16. In view of the above violation, the Noticee is liable for monetary penalty under
Sections 15HB and 15C of the SEBI Act which read as follows:

15HB.Penalty for contravention where no separate penalty has been provided.-
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15HB.Whoever fails to comply with any provision of this Act, the rules or the regulations made or
directions issued by the Board thereunder for which no separate penalty has been provided, shall be liable to
a penalty which may extend to one crore rupees.

15C.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, 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.

17. While determining the quantum of penalty under Section 15 HB of SEBI Act, 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:
15J.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.”

18. It is difficult, in cases of such nature, to quantify the disproportionate gains or
unfair advantage enjoyed by an entity because of the default and also the
magnitude of consequent losses suffered by the investors. I note that there was
an investor complaint pending against the Noticee. In the absence of complete
details, it is difficult to quantify the quantum of penalty. However, the 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

19. In view of the above, after considering all the facts and circumstances of the case
and exercising the powers conferred upon me under Section 15 I of the SEBI Act
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and Rule 5 of the Adjudication Rules, I hereby impose a penalty of Rs.1,50,000/-
(Rupees One Lakh Fifty Thousands) only under the provisions of Section 15HB of
the SEBI Act and Rs.1,50,000/- (Rupees One Lakh Fifty Thousands) only under
the provisions of Section 15C of the SEBI Act, on the Noticee, thereby resulting
into consolidated penalty of Rs.3,00,000/- (Rupees Three Lakhs) only. I am of the
view that the said penalty would be commensurate with the aforesaid failure
committed by the Noticee.

20. 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 Demand Draft shall be forwarded to the
Regional Director, Securities and Exchange Board of India, Eastern Regional
Office, L & T Chambers, Third Floor, 16, Camac Street, Kolkata - 700017.

21. Copy of this order is being sent to the Noticee and also to the SEBI, in terms of
the Adjudication Rules.




Date:August 12, 2014 SOMA MAJUMDER
Place: Kolkata ADJUDICATING OFFICER

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