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Client ID : inapu-1
Title : Videocon International Limited v Securities
and Exchange Board of India and Others.
V. N. Dhoot Versus Securities and
Exchange Board of India and Others. S.
M. Hegde Versus Securities and
Exchange Board of India and Others. S. K.
Shelgikar Versus Securities and Exchange
Board of India and Others
Delivery selection : Current Document
Number of documents delivered : 1
Videocon International Limited v Securities and Exchange Board of India and
Others. V. N. Dhoot Versus Securities and Exchange Board of India and
Others. S. M. Hegde Versus Securities and Exchange Board of India and
Others. S. K. Shelgikar Versus Securities and Exchange Board of India and
Others
Securities Appellate Tribunal
20 June 2002

Case Analysis

Bench C. ACHUTHAN

Where Reported 2002 Indlaw SAT 14; 2002 (3) CLC 1000

Case Digest Subject: Corporate; Securities Exchange Board of India

Keywords: Beneficial Owner, Same Management, Takeover,
Delinquent, Paid-Up Capital, Record Date, Fii, Appeals allowed to
the extent stated above.
Summary: Securities Exchange Board of India - Corporate -
Companies Act, 1956 - Securities and Exchange Board of India Act,
1992, ss.11,11B, 24, 26, 27 - Share capital - Manipulation -
Appellant/Public Ltd Company was engaged in business of
manufacturing and selling of consumer electronic item - Appellant
share capital are listed on stock exchange traded as permitted
securities on National Stock Exchange - Respondent/SEBI carried
out investigation into alleged price manipulation in shares of
companies including appellant/company - During investigation it was
revealed that set of brokers and sub-brokers acting in concert built
up unusually large positions in scrips resulting in distortion of market
equilibrium and creation of artificial market in scrips - Respondent
No. 3, issued show cause notice to appellants -
Appellant-company's shares, as cause of market distortion and held
appellant-company guilty of violating regn. 4(a) and (d) -
Appellant-company, contended that impugned order has been
passed by respondent-chairman in gross violation of principles of
natural justice and fair play - Hence, instant appeal.
Held, it was promoters who purchased shares in public offer and as
such for impact of such public offer if any, company cannot be held
liable, unless company's involvement therein is clearly established,
which respondents have failed to do. It is to be noted that
respondents have failed to identify exact source of funds flow to
market that as to whether it was appellant's money or VPL's.
Evidence shows that it was VPL's and appellant was only one of
links in chain of fund movement to market. Even if it is assumed that
it was appellant's fund, in absence of reasonable evidence to show
nexus between appellant-company and Damayanti group and
further that said Damayanti group acted at behest of
appellant-company, it is not possible to hold appellant liable for
activities of Damayanti group, especially in view of seriousness of
allegation and legal consequences thereof. Bail out per se is not an
act of manipulation. Respondents have not made out any case that
brokers who faced payment problem were holding large positions on
appellant's account. On contrary respondents stated that it was
Damayanti group for who cornered shares. But relevance of that
again depends on evidence showing as to whether it was quid pro
 quo measure. No enough evidence in this regard has been adduced
by respondents. Appeals disposed of.

Cases Cited Referred

Bank of India and Another v Degala Suryanarayana1999 Indlaw SC
866, (1999) 5 SCC 762, (1999) SCC (L&S) 1036, AIR 1999 SC
2407, 1999 (5) ALD(SC) 1, 1999 (3) ESC 1927, JT 1999 (4) SC 489,
1999 (2) LLJ 682, [1999] 3 S.C.R. 824, 1999 (6) Supreme 39, 1999
(3) UPLBEC 1743
Securities and Exchange Board of India v Alka Synthetics Ltd. and
Others.1998 Indlaw GUJ 372, AIR 1999 GUJ 221, [1999] 95 Comp
Cas 772, 1999 (1) CompLJ 396
M.S. Bindra v Union of India and Others1998 Indlaw SC 611, (1998)
7 SCC 310, (1998) SCC (L&S) 1812, AIR 1998 SC 3058, 1998 (2)
CLR 852, 1998 (78) ECR 502, 1998 (80) FLR 452, JT 1998 (6) SC
34, 1998 LabIC 3491, 1999 (1) LLJ 923, 1998 (4) LLN 1, 1998(5)
SCALE 45, 1999 (2) SLJ 96, 1998 (3) SLR 358, 1998 (7) SLT 239,
[1998] Supp1 S.C.R. 232, 1998 (7) Supreme 90
Ms. Delux Land Organizers v The State of Gujarat and Others1990
Indlaw GUJ 61, AIR 1992 GUJ 75
An Advocate v Bar Council of India and Another1988 Indlaw SC
242, (1989) Supp2 SCC 25, (1989) SCC (Cr) 625, AIR 1989 SC
245, 1988 (2) CCC 920, JT 1988 (4) SC 376, 1989 (1) KLT 116,
1988(2) SCALE 1362, [1988] 3 S.C.R. 361, [1988] Supp3 S.C.R.
361
Rajinder Nath v Commissioner of Income Tax, Delhi1979 Indlaw SC
136, (1979) 4 SCC 282, AIR 1979 SC 1933, 1979 (12) CTR 201,
[1979] 120 ITR 14, [1979] 1 S.C.R. 272, [1979] 2 TAXMAN 204,
1979 UJ 762
Nand Kishore Prasad v State of Bihar and Others1978 Indlaw SC
172, (1978) 3 SCC 366, (1978) SCC (L&S) 458, AIR 1978 SC 1277,
1978 LabIC 1106, 1978 (2) LLJ 84, 1978 (2) LLN 278, [1978] 3
S.C.R. 708, 1978 SLJ 591, 1978 (2) SLR 46, 1978 UJ 395
Additional Commissioner of Income Tax, Madhya Pradesh v
Kalyanmal Mills Tent Factory1978 Indlaw MP 40, [1979] 116 ITR
881
L. D. Jaisinghani v Naraindas N. Punjabi1975 Indlaw SC 453, (1976)
1 SCC 354, AIR 1976 SC 373, 1976 UJ 68
Khemka and Company v State of Maharashtra1975 Indlaw SC 416,
(1975) 2 SCC 22, (1975) SCC (Tax) 227, AIR 1975 SC 1549, 1975
(4) CTR 106, [1975] 3 S.C.R. 753, 1975 (35) STC 571, 1975 TAXLR
1777
Ch. Razik Ram v Ch. Jaswant Singh Chouhan and Others1975
Indlaw SC 592, (1975) 4 SCC 769, AIR 1975 SC 667
Seth Gulabchand v Seth Kudilal and Others1966 Indlaw SC 359,
AIR 1966 SC 1734, [1966] 3 S.C.R. 623
Union of India v H. C. Goel1963 Indlaw SC 293, AIR 1964 SC 364,
1964 ALJ 38, 1963 CurLJ 153, 1964 (9) FLR 161, 1964 (1) LLJ 38,
1964 (66) PLR 305, [1964] 4 S.C.R. 718
Amba Lal v Union of India and Others1960 Indlaw SC 143, AIR
 1961 SC 264, 1961 CRLJ 326, 1983 ECR 1935, 1983 (13) E.L.T.
1321, 1962 (2) SCJ 549, [1961] 1 S.C.R. 933

Cases Citing this Case In Re : Sai Info Limited, Dealings By Vipul Finport and Lease Limited
(Now Amlagamated With Rajendra Seclease Limited)
2010 Indlaw SEBI 34

Legislation Cited Companies Act, 1956

Criminal Procedure Code, 1963
Criminal Procedure Code, 1963 s. 482
Indian Evidence Act, 1872
Indian Evidence Act, 1872 s. 3
Securities and Exchange Board of India Act, 1992
Securities and Exchange Board of India Act, 1992 s. 11
Securities and Exchange Board of India Act, 1992 s. 11B
Securities and Exchange Board of India Act, 1992 s. 24
Securities and Exchange Board of India Act, 1992 s. 26
Securities and Exchange Board of India Act, 1992 s. 27
Special Courts (Repeal) Act, 1982
Securities and Exchange Board of India (Prohibition of Fraudulent
and Unfair Trade Practices Relating to Securities Markets)
Regulations, 1995

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