BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

ADJUDICATION ORDER NO. EAD-7/BJD /NJMR/2018/19/2343
___________________________________________________________________
UNDER SECTION 15-I OF SECURITIES 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:

Ramchand Tahikandas Chettija HUF

(PAN: AAAHR0799B)
401, Chandralok, 12th Floor
Khar (West)
Mumbai – 400052.

In the matter of Mindvision Capital Ltd.,

BACKGROUND

1. Securities and Exchange Board of India (hereinafter referred to as "SEBI")

conducted an investigation in the scrip of Mindvision Capital Ltd., (formerly
known as Kailash Ficom Ltd.,) (hereinafter referred to as “MCL”) to ascertain
any possible violation of the provisions of SEBI Act, 1992 and SEBI
(Prohibition of Fraudulent and Unfair Trade Practices relating to Securities
Market) Regulations, 2003 (hereinafter referred to as “PFUTP” Regulations)
by certain connected entities during the period June 17, 2009 to February
08, 2010 (hereinafter referred to as “Investigation Period”).

2. The investigation revealed that Ramchand Tahikandas HUF (hereinafter

referred to as “Noticee”) was part of a group of entities connected to each
other, had indulged in circular trading in the scrip of MCL, which resulted in
creation of artificial volume in the scrip of MCL and thereby violated the
provisions of Regulation 3 (a), (b), (c), (d), 4 (1), 4 (2) (a) and (g) of SEBI
(PFUTP) Regulations, 2003.

Adjudication Order in the matter of Mindvision Capital Ltd., Page 1 of 26

 APPOINTMENT OF ADJUDICATION OFFICER

3. Based on the findings of the investigation, SEBI initiated Adjudication

proceedings against the Noticee and appointed the undersigned as
Adjudicating Officer vide Order dated July 17, 2017 under Section 19 of SEBI
Act read with Sub-section (1) of Section 15-I of the SEBI Act, 1992 and Rule
3 of SEBI (Procedure for Holding Inquiry and Imposing Penalties by
Adjudicating Officer) Rules, 1995 (hereinafter referred to as “Adjudication
Rules”) to inquire into and adjudge under Section 15HA of SEBI Act for the
alleged violation of the provisions of SEBI (PFUTP) Regulations committed
by the Noticee.

SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

4. A common Show Cause Notices (SCN) bearing ref. no.,

EAD/BJD/NJMR/28740/2017 dated November 20, 2017 was issued to 12
entities under Rule 4(1) of the SEBI Adjudication Rules to show cause as to
why an inquiry should not be held against them and penalty be not imposed
under Section 15 HA of the SEBI Act for the violation of the provisions of
SEBI (PFUTP) Regulations.

5. Out of the 12 entities, the proceedings against Chandan Shrichand Jain, one
of the Noticees, since deceased, were abated vide Order ref. no., EAD/BJD
/NJMR/152/2017-18 on February 7, 2018.

6. In respect of 10 entities viz., Nilesh Krushna Palande, Dadima Capital (P)

Ltd., Universal Credit & Securities Ltd., Mahesh Ramanlal Shah, Kumar
Raichand Madan, Fast Track Entertainment Ltd., Pooja Vinay Jain,
Pragjibhai Mohanbhai Sukhadiya, Manjulaben P Sukadiya and Mangilal C
Doshi HUF, an Adjudication Order was passed against them vide ref. no.
EAD-7/BJD/NJMR/2018/19/1863-72 on January 11, 2019 by imposing

Adjudication Order in the matter of Mindvision Capital Ltd., Page 2 of 26

 suitable penalty on the 10 entities for violation of the provisions of SEBI
(PFUTP) Regulations.

7. In respect of Ramchand Tahikandas Chettija HUF, I note that the Noticee

had filed an application for settlement on January 9, 2018 under the
provisions of SEBI (Settlement of Administrative and Civil Proceedings)
Regulations, 2014 (hereinafter referred to as “Settlement Regulations”).
Accordingly, the Adjudication proceedings against Ramchand Tahikandas
Chettija HUF were kept in abeyance. Consequent upon rejection of consent
application filed by the Noticee, the Adjudication proceedings have been
recommenced. Accordingly, vide a notice of hearing dated January 22, 2019
the Noticee was given an opportunity to file his reply to the charges alleged
in the SCN by February 11, 2019, besides being provided with an opportunity
of personal hearing on February 15, 2019.

8. I note that the Noticee appeared for personal hearing on February 15, 2019,
made oral submissions and undertook to furnish his reply to the SCN along
with the following documents by February 25, 2019.

a) Copies of KYC forms;

b) Demat Account statement from April 1, 2009 to December 31, 2009;
c) Bank account statement from April 1, 2009 to December 31, 2009;
d) Ledger maintained with the stock broker, in respect of the
transactions carried out during the period April 1, 2009 and
December 31, 2009;
e) Copies of contract notes in respect of the transactions carried out in
the scrip of Mindvision Capital Ltd.,

9. Accordingly, the Noticee vide email dated February 25, 2019 furnished his
reply and submitted the documents except copies of KYC forms and ledger
maintained with the stock broker, since the same were not available with him.
The reply furnished by the Noticee is summarized hereunder:

(a) I am not a regular market dealer and very occasionally deal in securities
which is evidenced by the fact that for the past 10 years I have not dealt

Adjudication Order in the matter of Mindvision Capital Ltd., Page 3 of 26

 in more than a few transactions that too at a gap of more than a number
of months between any two transaction. Further the few transactions
which I have entered into were with the intent of long term investments
and without any intent of committing any fraud.

(b) Based on the advise of G R Pandya Share Broking Ltd., I purchased

shares of MCL with an intent to earn on a long term basis for which a
payment was duly made by me to G R Pandya Share Broking Ltd.,
Pursuant to purchase of shares through G R Pandya Share Broking Ltd.,
I was issued a contract cum bill note dated April 8, 2009.

(c) After purchase of shares of MCL, for a long time, I could not see the
shares in my account and therefore the matter was taken up with G R
Pandya Share Broking Ltd., and after long follow up with them with great
difficulty I could get the shares in my account and upon receipt of the
shares in my account, I immediately sold the shares in the open market
through another broker as the intent of G R Pandya Share Broking ltd.,
was not clear to me and the price of the shares was increasing.

(d) I have no knowledge of any transaction as alleged in the SCN. Even, if

there has been any violation in the said transaction the same has not
been within my knowledge, as I am not aware of any of the entities as
mentioned in the SCN. In fact through the present SCN for the first time I
came to know about Dadima Capital (P) Ltd., I have no relation /
connection with the counterparty or the company.

(e) It is impossible for me as a client of a broker to identify that the trades

executed by the broker are for the purpose of manipulating the market,
since the intention of a broker cannot be known to me.

(f) The SCN has failed to establish any relation between me and the alleged
group. To indulge in circular trading, a commonality of purpose and
objective, a meeting of minds is required which is absent in the current
situation. There is not an iota of evidence or mention in the SCN that the
alleged group acted with a pre-determined and pre-meditated common
malafied intent.

(g) There is no element of manipulative or fraudulent intention that is

attributable to me for my acts as referred above.

CONSIDERATION OF ISSUES AND FINDINGS

10. After perusal of the material available on record, I have the following issues
for consideration viz.,

Adjudication Order in the matter of Mindvision Capital Ltd., Page 4 of 26

 I. Whether the Noticee has violated the provisions of Regulations 3
(a), 3(b), 3(c), 3 (d), 4 (1), 4 (2) (a) and 4 (2) (g) of SEBI (PFUTP)
Regulations, 2003?

II. Whether the Noticee is liable for monetary penalty under Section
15HA of the SEBI Act (as applicable)?

III. If so, what quantum of monetary penalty should be imposed on the

Noticee?

FINDINGS

11. On perusal of the material available on record and giving regard to the facts
and circumstances of the case and submissions of the Noticee, I record my
findings hereunder.

ISSUE I: Whether the Noticee has violated the provisions of

Regulations 3 (a), 3(b), 3(c), 3 (d), 4 (1), 4 (2) (a) and 4 (2) (g) of SEBI
(PFUTP) Regulations, 2003?

12. Before moving forward, it is pertinent to refer to the relevant provisions of

SEBI (PFUTP Regulations), 2003 which reads as under:

Regulation 3 of SEBI (PFUTP) Regulations: - Prohibition of certain

dealings in securities

3. No person shall directly or indirectly—

(a) buy, sell or otherwise deal in securities in a fraudulent manner;
(b) use or employ, in connection with issue, purchase or sale of any
security listed or proposed to be listed in a recognized stock exchange,
any manipulative or deceptive device or contrivance in contravention of
the provisions of the Act or the rules or the regulations made thereunder;
(c) employ any device, scheme or artifice to defraud in connection with
dealing in or issue of securities which are listed or proposed to be listed
on a recognized stock exchange;
(d) engage in any act, practice, course of business which operates or
would operate as fraud or deceit upon any person in connection with any

Adjudication Order in the matter of Mindvision Capital Ltd., Page 5 of 26

 dealing in or issue of securities which are listed or proposed to be listed
on a recognized stock exchange in contravention of the provisions of the
Act or the rules and the regulations made thereunder.

Regulation 4 of SEBI (PFUTP) Regulations: - Prohibition of

manipulative, fraudulent and unfair trade practices

(1) Without prejudice to the provisions of regulation 3, no person shall

indulge in a fraudulent or an unfair trade practice in securities.

(2) Dealing in securities shall be deemed to be a fraudulent or an unfair

trade practice if it involves fraud and may include all or any of the
following, namely:-
(a) indulging in an act which creates false or misleading appearance of
trading in the securities market;
(g) entering into a transaction in securities without intention of
performing it or without intention of change of ownership of such
security;

13. It was observed that there was a group of entities connected to each other
through off-market transfer of shares, common address, telephone number,
Email ID and the Promoter of MCL, found to be actively trading in the scrip
of MCL. The connections as evidenced by KYC data, Depositories data viz.,
client master & transaction statements, MCA database and, BSE UCC
database are furnished hereunder:

Sr. Client Name Basis of Connection Nature of evidence

No.
Abhijay Investments &
1. Narendra Ramanlal Shah
(PAN-AAPPS6559P)
Akash Mukesh Udani (PAN-
2. ABDPU0828L)
Alpha Graphic India LTD.
3. (PAN-AABCA8299H)
Anushree Trade Link Pvt.Ltd.
4. (PAN-AADCA9333L)
Anish Vinodchandra Shah
5. (PAN: AWWPS3129G)
Arpita Pritesh Jain (PAN-
6. AFJPJ1463N)
Ashok Tahikandas Chhetija
7. (PAN-AABPC5326J)
Narendra Ramanlal Shah and Abhijay KYC of the client.
Investments share common PAN - Shareholding pattern
AAPPS6559P. Narendra Ramanlal Shah is quarter ending
a promoter of the Company- Mindvision September 2009 &
Capital Ltd. December 2009
Off market transactions with Shrichand CDSL Statement of
Shadilal Jain (Sr.No.68) Transactions
Off market transactions with Dolly Shah. CDSL Statement of
(Sr.No. 22) Transactions
Same as Sawaria Trading P Ltd., (Sr. No. CDSL Statement of
65) Transactions
Off-market transactions with Vaishali Shad CDSL / NSDL
Gawade (Sr. No. 73) Statement of
Transactions
Off market transactions with Dadima CDSL Statement of
Capital P. Ltd. (Sr.No. 18) Transactions
Off market transactions with Vaishali Off market transactions
Gawde (Sr.No. 73)

Adjudication Order in the matter of Mindvision Capital Ltd., Page 6 of 26

 Asmita Ketan Sukhadiya Off market transactions with Dadima CDSL Statement of
8. (PAN-BDBPS6969P) Capital P. Ltd. (Sr.No. 18) Transactions
Better Mercantile Pvt., Ltd., Off-market transactions with Vaishali Shad NSDL Client Master &
9. (PAN: AAICS6024M) Gawade (Sr. No. 73). Transaction Statements
The address, contact nos., and Email IDs of
Better mercantile Pvt., Ltd., Sawaria
Trading Pvt., Ltd., and Class Commercial
Pvt., Ltd., are same.
Bharatbhai P Padia HUF Off market transactions with Universal CDSL Statement of
10. (PAN-AABHB0302H) Credit & Securities Ltd. (Sr.No. 71) and Transactions
Jayashree Bhosle (Sr.No. 31)
Bharat Kumar HUF (PAN- Off market transactions with Dadima CDSL Statement of
11. AAFHB8182F) Capital P. Ltd. (Sr.No. 18) Transactions
Bhavarlal Jain HUF (PAN- Off market transactions with Dadima BSE UCC database
12. AAAHB1343P) Capital P. Ltd. (Sr.No. 18) and having
Common address with Girdharilal Jain (Sr
No. 28)
Bhavik B Padia (PAN- Off market transactions with Universal CDSL Statement of
13. ANFPP8202R) Credit & Securities Ltd (Sr.No. 71) and Transactions
Jayashree Bhosle (Sr.No. 31)
Bipin Babulal Shah (PAN- Off market transactions with Mahesh Shah CDSL Statement of
14. ABHPS7041P) (Sr No. 41) (Director of the Company) Transactions
Chandan Shrichand Jain Off market transactions with Dadima CDSL Statement of
15. (PAN-AAIPJ8788J) Capital P. Ltd. (Sr.No. 18), Jayashree Transactions
Bhosle (Sr.No. 31) and Kumar Raichand
Madan (Sr.No. 38)
Chetan Sukhdev Pandit (PAN: Off market transactions with Dadima CDSL Statement of
16. AGJPP0477F) Capital P. Ltd. (Sr.No. 18) and Megha Transactions
Dhimant Mehta (Sr. No. 45)
Class Commercial Pvt., Ltd., Off-market transactions with Better NSDL Client Master &
17. (PAN: AAICS6023N) Mercantile Pvt., Ltd., (Sr. No. 9) Transaction Statements
The address, contact nos., and Email IDs of
Better mercantile Pvt., Ltd., Sawaria
Trading Pvt., Ltd., and Class Commercial
Pvt., Ltd., are same.
Dadima Capital (P) Ltd (PAN- Off market transfers with Arpita Pritesh Jain CDSL Statement of
18. AABCD2140E) (Sr No. 6), Asmitaben Ketanbhai Sukhadiya Transactions
(Sr No. 8), Bharat Kumar HUF (Sr No. 11),
Bhavarlal N Jain HUF (Sr No. 12), Chandan
Shrichand Jain (Sr No.15), Dinesh Kumar
(Sr No. 20), Dolly N Shah (Sr No. 22),
Falguni Nayneshbhai Mehta(Sr No. 23),
Geeta Narendra Shah (Sr No. 27),
Girdharilal Nihalchand Jain (Sr No. 26),
Jayshree Shankar Bhosle (Sr No. 31),
Kanchanben Jayantilal Korat (Sr. No. 37),
Kantilal Bhawarlalji (Sr. No. 34), Kishor N
Jain Huf (Sr No. 35), Korat Jayantilal G (Sr
No. 31), Lalita Girdharilal Jain (Sr No. 39),
Mahesh Ramanlal Shah (Sr. No. 41),
Mangilal Chandanmal Doshi (HUF) (Sr No.
42), Manju Devi (Sr No. 43), Manjulaben P
Sukhadiya (Sr No. 43), Motiram T. Chhetija
HUF (Sr No. 46), Narendra Ramanlal Shah
(Sr No. 1), Nilesh Palande (Sr.No. 50),
Pankaj Agrawal HUF (Sr No. 51), Pooja
Vinay Jain (Sr No. 53), Pragjibhai
Mohanbhai Sukhadiya (Sr No. 54), Rajesh
Dalmia HUF (Sr No. 58), Ramchand

Adjudication Order in the matter of Mindvision Capital Ltd., Page 7 of 26

 Tahikandas Chhetija HUF (Sr No. 59),
Rangeela Devi (Sr No. 61), Rekha Devi (Sr
No. 62), Rita Ashok Pandey (Sr No. 63),
Universal Credit & Securities Ltd. (Sr.No.
71), Vaishali Sharad Gawde (Sr.No. 73)
and Vinodkumar Soni (Sr No. 76)
Dharmesh Naginchand Jain Off market transactions with Universal CDSL Statement of
19. (PAN-ACVPJ5888J) Credit & Securities Ltd (Sr.No. 71) Transactions
Dinesh kumar (PAN- Off market transactions with Dadima CDSL Statement of
20. AADHD9740H) Capital P. Ltd. (Sr.No. 18) Transactions
Dineshbhai Dayalal Koradiya Off market transfers with Surendra Shah CDSL Statement of
21. (PAN-ACUPK3696A) (Sr. No. 69) Transactions
Surendra Shah has purchased 65,000
shares in off-market from Dadima Capital
(P) Ltd. (Sr no. 18) and sold in off-market
35,000 shares to Dineshbhai Dayalal
Koradiya , 20,000 shares to Pinal Ankit
Patel (Sr No. 52) and 10,000 shares to
Pravinbhai Dahyalal Koradiya (Sr No. 56).
Dolly Shah (PAN- Off market transfers with Alpha Graphic CDSL Statement of
22. BISPS4540Q) India Ltd., (Sr. No. 3) Gajraj Jethmal Jain Transactions
(Sr No. 25), Gajraj Jain (HUF) (Sr. No. 24)
and Dadima Capital P. Ltd. (Sr.No. 18)
Falguni Nayneshbhai Mehta Off market transactions with Dadima CDSL Statement of
23. (PAN-AFCPM5922Q) Capital P. Ltd. (Sr.No. 18) Transactions
Gajraj Jain HUF (PAN- Off market transactions with Dolly Shah CDSL Statement of
24. AAFHG2641N) (Sr.No. 22) Transactions
Gajraj Jethmal Jain (PAN- Off market transactions with Dolly Shah CDSL Statement of
25. AFTPJ4591B) (Sr.No. 22) Transactions
Gangabai Pukhraj Jain (PAN- Off market transactions with Jayashree CDSL Statement of
26. ADFPJ3430K) Bhosle (Sr.No. 31) Transactions
Geeta Shah (PAN- Promoter of the Company. Shareholding pattern.
27. AAOPS2033H) Off market transactions with Dadima CDSL Statement of
Capital P. Ltd. (Sr.No. 18) Transactions
Girdharilal Jain (PAN- Off market transactions with Dadima CDSL Statement of
28. AFDPJ9860R) Capital P. Ltd. (Sr.No. 18) Transactions. BSE UCC
Common address with Kishor Jain database.
(Sr.no.35)
Hansika Udani (PAN- Having common address with Mukesh BSE UCC database
29. AAAPU3742R) Udani (Sr.No. 48)
Haresh Tahikandas Chhetija Off market transactions with Vaishali CDSL Statement of
30. (PAN-AABPC5328G) Gawde (Sr.No. 73). Transactions
Jayashree Shankar Bhosle Off market transfers with Bharatbhai P CDSL Statement of
31. (PAN-AFMPB0449P) Padia (Sr. No. 10), Bhavika B Padia (Sr. Transactions
No. 13), Chandan Shrichand Jain (Sr. No.
15), Dadima Capital (P) Ltd. (Sr.No. 18),
Ganga Pukhraj Jain (Sr. No. 26),
Nihalchand D Jain HUF (Sr. No. 49), Nilesh
Krishna Palande (Sr. No. 50), Sarojben
Bharatbhai Padia (Sr. No. 68), Shrichand
Jain HUF (Sr. No. 67), Shrichand Shadilal
Jain (Sr. No. 68), Tejal Bharatkumar Padia
(Sr. No. 70), Universal Credit & Securities
Ltd (Sr.No. 71)
Kailash Prasad Dhyawala Off market transaction with Better NSDL Client Master &
32. (PAN: ADEPD9506B) Mercantile Pvt., Ltd., (Sr. No. 9). Transaction Statements`

The address, contact nos., and Email IDs of

Better Mercantile Pvt., Ltd., Sawaria

Adjudication Order in the matter of Mindvision Capital Ltd., Page 8 of 26

 Trading Pvt., Ltd., and Class Commercial
Pvt., Ltd., are same.
Kamlaben Shah (PAN- Having common mobile number with BSE UCC database
33. AFQPS2519R) Uttamlal Shah (Sr.No. 72)
Kantilal Bhawarlalhi HUF Off market transactions with Dadima CDSL Statement of
34. (PAN-AAGHK8736B) Capital P. Ltd. (Sr.No. 18) Transactions
Kishor N Jain (PAN- Off market transactions with Dadima CDSL Statement of
35. AAEHK1410J) Capital P. Ltd. (Sr.No. 18) Transactions
Korat Jayantilal G (PAN- Off market transactions with Dadima CDSL Statement of
36. ABOPP5766B) Capital P. Ltd. (Sr.No. 18) Transactions
Korat Kanchanben J (PAN- Off market transactions with Dadima CDSL Statement of
37. AFUPK7820D) Capital P. Ltd. (Sr.No. 18) Transactions
Kumar Raichand Madan (PAN- Kumar Raichand Madan and Narendra Kumar Raichand Madan
38. AAHPM0952C) Shah (Sr.No. 1) are Directors in company is a director of
Tribhuvan Housing Ltd. Tribhuvan Housing Ltd
Narendra Shah is Promoter of Mindvision (A listed company at
Capital Ltd. BSE). CDSL Statement
Off market transactions with Chandan of Transactions
Shrichand Jain (Sr. No. 15)
Lalita Girsharilal Jain (PAN- Off market transactions with Dadima CDSL Statement of
39. ADFPJ3432M) Capital P. Ltd. (Sr.No. 18) Transactions
Madhu Bhiwaniwala (PAN: Off market transaction with Sawaria Trading NSDL Client Master &
40. AGOPB1751B) Pvt., Ltd., (Sr. No. 65) Transaction Statements
The address, contact nos., and Email IDs of
Better Mercantile Pvt., Ltd., Sawaria
Trading Pvt., Ltd., and Class Commercial
Pvt., Ltd., are same.
Mahesh Ramanlal Shah (PAN- Director of the Company. Off market MCA database. CDSL
41. AAOPS2034A) transactions with Dadima Capital P. Ltd. Statement of
(Sr.No. 18) and Bipin Babulal Shah (Sr.No. Transactions
14)
Mangilal C Doshi HUF (PAN- Off market transactions with Dadima CDSL Statement of
42. AADHM2680K) Capital P. Ltd. (Sr.No. 18) Transactions
Manju Devi (PAN- Off market transactions with Dadima CDSL Statement of
43. AEBPM5412P) Capital P. Ltd. (Sr.No. 18) Transactions
Manjulaben Sukhadiya (PAN- Off market transactions with Dadima CDSL Statement of
44. ACIPP6020B) Capital P. Ltd. (Sr.No. 18) Transactions
Megha D Mehta (PAN- Off market transactions with Chetan Pandit. CDSL Statement of
45. AEXPM3422M) (Sr. No. 16) Transactions
Chetan Pandit is one of the director of
Universal Credit & Securities Ltd. (Sr.No.
71)
Motiram T Cheetija (HUF) Off market transactions with Dadima CDSL Statement of
46. (PAN-AAFHM0889L) Capital P. Ltd. (Sr.No. 18) Transactions
Motiram Tahikandas Cheetija Off market transactions with Vaishali CDSL Statement of
47. (PAN-AABPC0193M) Gawde (Sr.No. 73) Transactions
Mukesh Udaykumar Udani Off market transactions with Shrichand CDSL Statement of
48. (PAN-AAAPU1537G) Shadilal Jain (Sr.No.68) Transactions
Nihalchand D Jain HUF (PAN: Off market transactions with Jayashree CDSL Statement of
49. AAAHN2269J) Bhosle (Sr. No. 31) Transactions
Nilesh Krushna Palande (PAN- Nilesh Palande & Tribhuvan Housing Ltd BSE UCC Database.
50. AGLPP8818Q) share common address. Their address is Narendra Shah is a
23, Jalaram Nagar, S.V.P. Road, 02nd director of Tribhuvan
Floor, Chamunda Circle, Borivali (W) Housing Ltd. (A listed
Mumbai – 400092. company at BSE) CDSL
Statement of
Narendra Shah (Sr No. 1 is Promoter of Transactions.
Mindvision Capital Ltd.) is director of
Tribhuvan Housing Ltd.

Adjudication Order in the matter of Mindvision Capital Ltd., Page 9 of 26

 Nilesh Palande has off market transactions
with Vaishali Gawde (Sr.No. 73), Dadima
Capital (P) Ltd. (Sr.No. 18), Jayashree
Bhosle (Sr.No. 31), and Uttamlal
Jaychandbhai Shah (Sr.No. 72)
Pankaj Kumar Agrawal HUF Off market transactions with Dadima CDSL Statement of
51. (PAN-AAIHP2386N) Capital (P) Ltd. (Sr.No. 18) Transactions
Pinal Ankit Patel (PAN- Off market transactions with Surendra CDSL Statement of
52. BDIPP6030P) Shah. Transactions
Surendra Shah has purchased 65,000
shares in off-market from Dadima Capital
(P) Ltd. (Sr no. 18) Surendra Shah has
sold in off-market 35,000 shares to
Dineshbhai Dayalal Koradiya (Sr No. 21),
20,000 shares to Pinal Ankit Patel (Sr No.
52) and 10,000 shares to Pravinbhai
Dahyalal Koradiya (Sr No. 55).
Pooja Vinay Jain (PAN- Off market transactions with Dadima CDSL Statement of
53. ACTPJ1557C) Capital (P) Ltd. (Sr.No. 18) Transactions
Pragjibhai Mohan Sukhadiya Off market transactions with Dadima CDSL Statement of
54. (PAN-AARHS1476H) Capital (P) Ltd. (Sr.No. 18) Transactions
Pravinbhai Dahyalal Koradiya Off market transactions with Surendra Shah CDSL Statement of
55. (PAN-ACRPK1218R) (Sr. No. 69) Transactions
Surendra Shah has purchased 65,000
shares in off-market from Dadima Capital
(P) Ltd. (Sr no. 18). Surendra Shah has
sold in off-market 35,000 shares to
Dineshbhai Dayalal Koradiya (Sr No. 21),
20,000 shares to Pinal Ankit Patel (Sr No.
52) and 10,000 shares to Pravinbhai
Dahyalal Koradiya.
Prikshit Sohan Soni (PAN- Off market transactions with Dadima CDSL Statement of
56. AAJHP2204E) Capital (P) Ltd. (Sr.No. 18) Transactions
Rajesh Dalmia (HUF) (PAN- Off market transactions with Dadima CDSL Statement of
57. AAMHR9015G) Capital (P) Ltd. (Sr.No. 18) Transactions
Ramchand Tahikandas Off market transactions with Dadima CDSL Statement of
58. Chhetija (PAN-AAAHR0799B) Capital (P) Ltd. (Sr.No. 18) Transactions
Ramesh L Ranpariya HUF Off market transactions with Asmita CDSL Statement of
59. (PAN-AALHR3315L) Sukhadiya (Sr.No.8) Transactions
Rangeela Devi (PAN- Off market transactions with Dadima CDSL Statement of
60. AEIPD8565P) Capital (P) Ltd. (Sr.No. 18) Transactions
Rekha Devi (PAN- Off market transactions with Dadima CDSL Statement of
61. AGYPD3816H) Capital (P) Ltd. (Sr.No. 18) Transactions
Rita Ashok Pandey (PAN- Off market transactions with Dadima CDSL Statement of
62. AYWPP2525P) Capital (P) Ltd. (Sr.No. 18) and Narendra Transactions
Ramanlal Shah (Sr.No. 1)
Sarojben Bharatbhai Padia Off market transactions with Universal CDSL Statement of
63. (PAN-AHJPP8699Q) Credit & Securities Ltd (Sr.No. 71) and Transactions
Jayashree Bhosle (Sr.No. 31)
Sawaria Trading Pvt., Ltd., Off market transactions with Vaishali CDSL Statement of
64. (PAN: AADCA9333L) Gawde (Sr. No. 73) Transactions
Shankutala Bhanwarlal Jain Off market transactions with Vaishali CDSL Statement of
65. (PAN-AFDPJ9864M) Gawde (Sr. No. 73) Transactions
Shrichand Jain (HUF) (PAN- Off market transactions with Jayashree CDSL Statement of
66. AAJHS4184G) Bhosle (Sr.No. 31) Transactions
Shrichand Shadilal Jain (PAN- Off market transactions with Akash Mukesh CDSL Statement of
67. AFHPJ6824K) Udani (Sr.No. 2), Vaishali Gawde (Sr.No. Transactions
73), Mukesh Uday Udani (Sr.No. 48) and
Jayashree Bhosle (Sr.No. 31)

Adjudication Order in the matter of Mindvision Capital Ltd., Page 10 of 26

 Surendrakumar Shantilal Shah Off market transactions with Dadima CDSL & NSDL
68. (PAN: ACDPS9648H) Capital P Ltd., (Sr. No. 18), Pravinbhai Statement of
Dahyalal Koradiya (Sr. No. 56) and Transactions
Dineshbhai Dayalal Koradiya (Sr. No. 27)
Tejal Bharat Padia (PAN- Off market transactions with Universal CDSL Statement of
69. AHWPP2755Q) Credit & Securities Ltd (Sr.No. 71) and Transactions
Jayashree Bhosle (Sr.No. 31)
Universal Credit & Securities Narendra Ramanlal Shah (Sr. No. 1) is one MCA database. CDSL
70. Ltd (PAN-AAACU2627G) of the director in Universal Credit & Statement of
Securities Ltd. Off market transactions with Transactions.
Dadima Capital (P) Ltd. (Sr.No. 18),
Jayashree Bhosle (Sr.No. 31), Bharatbhai P
Padia HUF (Sr.No. 10), Dharmesh
Naginchand Jain (Sr.No. 19), Saroj Bharat
Padia (Sr.No. 64), Tejal Bharat Padia
(Sr.No. 69) and Bhavik B Padia (Sr.No. 13)
Uttamlal Jaychandbhai Shah Off market transactions with Nilesh Palande CDSL Statement of
71. (PAN-AIOPS8100P) (Sr.No. 50) Transactions
Vaishali Gawde (PAN- Off market transfers with Anish CDSL Statement of
72. AKZPG4168Q) Vinodchandra Shah (Sr. No. 5),Sawaria Transactions
Trading Pvt., Ltd., (Sr.No. 65), Ashokkumar
Tahikandas Chhetija (Sr.No. 7), Dadima
Capital (P) Ltd. (Sr.No. 18), Hareshkumar
Tahikandas Chhetija (Sr.No. 30), Motiram
Tahikandas Chhetija (Sr.No. 46), Nilesh
Krushna Palande (Sr.No. 50), Shakuntala
Bhanwarlal Jain (Sr.No. 66), Shrichand
Shadilal Jain (Sr.No. 68)
Vinod Laljibhai Godhan HUF Off market transfers with Manjula CDSL Statement of
73. (PAN: AAEHG5633H) Sukhadiya (Sr. No. 44) Transactions
Vinod Sohanlal Soni (PAN: Off market transactions with Dadima CDSL Statement of
74. AAFHV3152D) Capital (P) Ltd. (Sr.No. 18) Transactions
Rajesh Uttamlal Shah (PAN: Off market transactions with Mahesh CDSL/NSDL Statement
75. ANDPS8072N) Ramanlal Shah (Sr.No. 41) of Transactions

 Entities at Sr. No. 1 and 27 are Promoters of the Company MCL;

 Entity at Sr. No. 41 is a Director of the Company and related to Sr. No. as they are
brothers;
 Entity at Sr. No. is a Director of the entity at Sr. No. 71
 Entities at Sr. No. 1 and 38 are Directors of the Company Tribhuvan Housing Ltd.,
 Entity at Sr. No. 50 has common address with a Company Tribhuvan Housing Ltd.,
where Sr. No. 1 and 38 are Directors;
 PAN of Anushree Tradelink Pvt., Ltd., at Sr. No. 4 is the same as that of Sawaria
Tradelnkg Pvt., Ltd., as per NSDL Client Master. Hence, both are the same entities.
 Fast Track Entertainment Ltd. and Mindvision Capital Ltd. have a common director, Shri
Prahlad Panchal.
 No off-market transfers or market purchases / sales were observed to be carried out by
entity at Sr. No. 29 and 33.
 Therefore, the connected entities who traded in the scrip of MCL during the investigation
period comes to 72.

14. From the above table of connection, I note that the Noticee received shares
in off-market from Dadima Capital (P) Ltd., which cannot be refutable and
establishes connection with the group of entities who are connected to each
other. The 72 connected entities have bought / received and sold /

Adjudication Order in the matter of Mindvision Capital Ltd., Page 11 of 26

 transferred shares in the scrip in the market and/or off-market during the
investigation period. The connected entities have been divided into two sub-
groups based on their trading in market and off-market.

Sub Group -1: 22 Entities

These 22 entities, out of the 72 connected entities, have transferred shares

in the off-market within themselves and to the other 50 entities of the
connected entities (mentioned in Category-2) and who, in turn, sold those
shares in the market. Further, they have also purchased some shares in the
market.

Sub Group -2: 50 Entities

These 50 entities have received shares in the off-market only from the
entities mentioned in Sub-Group-1 and sold those shares in the market. They
have not bought any share in the market during the investigation period.

Trading of Sub Group -1: 22 entities out of 72 Connected entities

The names of 22 entities and their trading in the market as well as off-market
during the investigation period (June 17, 2009 to February 08, 2010) is
tabulated below.

Opening
balance (as Received Transferred
Sl. Bought in Sold in
Name of the client PAN on Jul 1, shares in off- shares in
No. market market
2009) market off-market

1. Alpha Graphic India Ltd. AABCA8299H 73 273,689 273,672 - -

2. Madhu Bhiwaniwala AGOPB1751B 17,455 - 17,455 - -

3. Sawaria Trading Pvt. Ltd. AADCA9333L 20,000 17,455 25,455 - 12,000
4. Better Mercantile Pvt. Ltd. AAICS6024M 68,000 49,500 117,500 - -
5. Vaishali Gawde AKZPG4168Q 2,90,748 244,680 535,428 - -
6. Kailash Prasad Dhyawala ADEPD9506B 68,000 - 68,000* - -
7. Class Commercial Pvt. Ltd. AAICS6023N 49,500 - 49,500 - -
8. Nilesh K Palande AGLPP8818Q 5,000 668,503 800,000 394,626 215,604
9. Anish Vinodchandra Shah AWWPS3129G 1,929 - 1,725 - 200
10. Dadima Capital Ltd. AABCD2140E 2,27,848 1,174,285 1,329,000 - -
11. Dolly N Shah BISPS4540Q 0 273,672 273,672 - -

Adjudication Order in the matter of Mindvision Capital Ltd., Page 12 of 26

 Opening
balance (as Received Transferred
Sl. Bought in Sold in
Name of the client PAN on Jul 1, shares in off- shares in
No. market market
2009) market off-market

Universal Credit & Securities

12. AAACU2627G 374,759 395,256 98,256 3,000
Ltd. 0
13. Jaishree Shankar Bhosle AFMPB0449 592 400,000 399,996 - -
14. Narendra R Shah AAPPS6559P 5,980 101,600 4,000 96,427 174,578
15. Akash Mukesh Udani ABDPU0828L 600 3,149 3,504 4,561 1,657

16. Mukesh Udaykumar Udani AAAPU1537G 0 6,201 5,900

8,401 3,148
0
17. Kumar Raichand Madaan AAHPM0952C - 8,500 8,500 -

Surendrakumar Shantilal
18. ACDPS9648H 0 65,000 65,000
Shah
19. Mahesh Ramanlal Shah AAOPS2034A 775 3,000 18,680 19,155 1,250
20. Chetan Sukhdev Pandit AGJPP0477F 0 16,421 16,400
21. Geeta Narendra Shah AAOPS2033H 20,134 - 700 6,345 23,891
22. Rajesh Uttamlal Shah ANDPS8072N 3,000 3,000
Total 3,671,914 4,412,343 636,271 435,328
*shares were transferred to entity at S No. 4 in April 2009.

15. From the above table, the following observations have been made:

(i) The above 22 entities (Sub Group 1) out of 72 connected entities have
received total 43,08,185 shares (i.e. 6,36,271 shares purchased in
market and 36,71,914 shares in off-market) and transferred total
48,47,671 shares (i.e. 4,35,328 shares sold in market and 44,12,343
shares in off-market) during the investigation period.

(ii) Out of total 158 trading days during the investigation period, only 8
entities out of 22 Connected entities of Sub-Group 1 have bought shares
in the market and their gross buy quantity was 6,36,271 shares which
accounted for 10.57% of the total market volume during the investigation
period.

(iii) There are 12 entities of the connected entities who have neither
purchased nor sold any shares in the market during the investigation
period but they have received 24,97,247 shares in off-market from the

Adjudication Order in the matter of Mindvision Capital Ltd., Page 13 of 26

 Connected entities and transferred 31,48,623 shares in off-market within
the Connected entities. Majority of their shares sold to the entities
mentioned in Sub Group-2 of the connected entities who, in turn, have
sold those shares in the market.

Trading of Sub-Group 2: 50 entities out of 72 connected entities

16. The following 50 entities of the connected entities have bought shares in the
off-market from the entities mentioned in Sub-Group 1 and sold those shares
in the market during the investigation period (June 17, 2009 to February 08,
2010). They have not bought single shares in the market. The summary of
their receipt of shares and sale in the market is tabulated below.

Sl. Name of client PAN Received shares in Bought in Sold in market

No. off-market market

1. Arpita Pritesh Jain AFJPJ1463N 10000 10000

2. Ashokkumar Tahikandas AABPC5326J
Chettija 32000 32000
3. Asmitaben Ketanbhai BDBPS6969P
Sukadiya 12000 7450
4. Bharat Kumar AAFHB8182F 9000 9000
5. Bharatbhai P Padia AABHB0302H 52500 66500
6. Bhavarlal N Jain HUF - AAAHB1343P 6000 6000
7. Bhavik P Padia ANFPP8202R 28000 28000
8. Bipin Babulal Shah ABHPS7041P 15000 15000
9. AAIPJ8788J
Chandan Shrichand Jain 35000 35000
10. Dharmesh Naginchand Jain ACVPJ5888J 100000 100000
11. Dinesh Kumar AADHD9740H 9000 9000
12. DINESHBHAI DAYALAL ACUPK3696A
KORADIA 35000 35000
13. AFCPM5922Q
Falguni Nayneshbhai Mehta 29000 29000
14. Gajrai Jain (HUF) AAFHG2641N 90000 90000
15. Gajraj Jethmal Jain AFTPJ4591B 90000 90000
16. Ganga Pukhraj Jain ADFPJ3430K 6000 6000
17. Girdharilal Niharchand Jain AFDPJ9860R 8000 8000
18. Hareshkumar Tahikandas AABPC5328G
Chettija 16000 16000
19. Kanchanben Jayantilal Korat AFUPK7820D 16000 16000
20. Kantilal Bhawarlalji AAGHK8736B 9000 9000

Adjudication Order in the matter of Mindvision Capital Ltd., Page 14 of 26

 Sl. Name of client PAN Received shares in Bought in Sold in market
No. off-market market

21. Kishore N Jain HUF AAEHK1410J 6000 6000

22. KORAT JAYANTILAL G ABOPP5766B 32000 16000
23. Lalita Girdharilal Jain ADFPJ3432M 8000 8000
24. Mangilal Doshi HUF AADHM2680K 7500 7500
25. Manju Devi AEBPM5412P 9000 9000
26. Manjulaben P Sukhadiya ACIPP6020B 18000 4350
27. Megha Dhimant Mehta AEXPM3422M 7000 7000
28. Motiram T Chettija HUF AAFHM0889L 30000 30000
29. Motiram Tahikandas Chettija AABPC0193M 32000 32000
30.
AAAHN2269J
Nihalchand D Jain HUF 6000 6000
31. Pankaj Agarwal AAIHP2386N 10000 10000
32. Parikshit Soni AAJHP2204E 13000 13000
33. Pinal Ankit patel BDIPP6030P 20000
34. Pooja Vinay Jain ACTPJ1557C 30000 30000
35. Pragjibhai Mohanbhai AARHS1476H
Sukhadiya 6000 6000
36. PRAVINBHAI DAHYALAL ACRPK1218R
KORADIYA 10000 10000
37. Rajesh Dalmia (HUF) AAMHR9015G 45000 45000
38. Ramchand Tehikandas
AAAHR0799B
Chettija HUF 30000 30000
39. AALHR3315L
Ramesh Laljibhai Ranpariya 4550 4550
40. Rangeela Devi AEIPD8565P 9000 9000
41. Rekha Devi AGYPD3816H 9000 9000
42. Rita Ashok Pandey AYWPP2525P 14000 4000
43. AHJPP8699Q
Sarojben Bharatbhai Padia 54000 54000
44. AFDPJ9864M
Shakuntala Bhanwarlal Jain 6000 6000
45. Shrichand Jain HUF AAJHS4184G 30000 30000
46. Shrichand Shadilal Jain AFHPJ6824K 25000 25000
47. Tejal Bharatkumar padia AHWPP2755Q 47500 46000
48. Uttamlal Jaichand Shah 60000 60800
49. Vinodbhai L Godhani HUF AAEHG5633H 13650 13650
50. Vinodkumar Soni AAFHV3152D 13000 6000
Total 12,12,700 11,54,800

17. It is observed from the trading details and the above table that the above 50
entities out of the Connected entities (Sub-Group 2) have received 12,12,700
shares in off-market from the entities of Sub-Group 1 and sold 11,54,800

Adjudication Order in the matter of Mindvision Capital Ltd., Page 15 of 26

 shares in the market. Majority of Connected entities’ sale was during the
period from 19th January 2010 to 08th February 2010 during which they sold
10,09,997 shares (61.13% of their total sell of 16,52,263 shares) which
accounted for 47.5% of the total market volume during the said period.

18. Circular trading in stock market refers to a fraudulent trading scheme where
buy/sell orders are entered by a person or by persons acting in collusion with
each other to operate the price of the underlying security. The person(s)
buying or selling knows that the same number of shares at the same time
and for the same price will be entered to neutralize the transaction. Hence,
these trades do not represent a real change in beneficial ownership of the
security. The only intention behind such buying or selling is raising or
depressing prices of the underlying securities by increasing trading volumes.
The participants involved in such trades make use of their prior knowledge
and enter orders knowing that those orders will be covered by reverse orders
of the same size, at the same time and price. This increases the trading
volumes in the underlying security and generates interest from other
investors. When trading volume in a particular script increases, it leads other
investors to believe that something big is afoot (such as a merger or an
acquisition) and that the interest in the underlying security is genuine. In short
– the intention of those who initiate circular trading is to con investors and
traders into buying or a selling the operated script.

19. I note from the trade log that the 2 entities of sub-group 1, viz Dadima Capital
P Ltd. and Kumar Raichand Madan have transferred shares in off-market to
6 entities of sub-group 2, viz., Pooja Vinay Jain, Chandan Shrichand Jain,
Pragjibhai Mohanbhai Sukhadiya, Manjulaben P Sukhadiya, Ramchand
Tehikandas Chettija HUF, Mangilal C Doshu (HUF) and these 6 entities have
subsequently sold these shares on-market to 4 entities of sub-group 1, viz.
Nilesh Krushna Palande, Universal Credit & Securities Ltd., Fast Track
Entertainment Ltd. and Mahesh Ramanlal Shah. The relation / connection
between the aforesaid entities of Sub-group 1 and sub-group 2 are shown
below:

Adjudication Order in the matter of Mindvision Capital Ltd., Page 16 of 26

 Director Narendra Shah Mahesh Ramanlal
(promoter of Shah (director of
Tribhuvan Housing Ltd. Brother
Mindvision Capital Mindvision Capital
Ltd.) Ltd.)
Director Director Director

Kumar Raichand Dadima Capital P Ltd. Universal Credit &

Madaan Securities Ltd.

Off- Off-market
Off-market market transfer
Chandan transfers transfer
Shrichand Jain Pooja Vinay
Jain Ramchand
Tehikandas Mangilal C
Chettija HUF Doshi (HUF)

Pragjibhai
Mohanbhai
Sukhadiya

Director Prahlad Panchal Director

Mindvision
Fast Track
Capital Ltd.
Entertainment Ltd.

20. The instances of the circular transaction between the above sub-groups is
shown below:

Adjudication Order in the matter of Mindvision Capital Ltd., Page 17 of 26

 Dadima Capital P Ramchand
Off-market transfer
Ltd., (sub-group 1) Tahikandas chehejija
)entity) 30,000 shares on 22-Dec-2009 (HUF)

Sold on-market on
23-Dec-2009 (5,625 shares)

24-Dec-2009 (24,375 shares)

Nilesh Krushna
Palande – 26,395
shares (Sub-group 1
entity)

21. I note from the submission that Noticee did not dispute receipt of the 30,000
shares in off market from Dadima capital (P) Ltd on December 22, 2009 and
subsequent sale of those shares in the market on December 23 & 24 2009.
Out of the 30,000 shares received from Dadima Capital (P) Ltd., on
December 22, 2009 in off-market, the Noticee had sold 26,395 shares to
another connected entity of the group viz., Nilesh Krushna Palande on
December 23, 2009. From the above pattern of trades, I note that the Noticee
was involved in circular trading with the connected entities. I note that the
Noticee was alleged to be part of the connected group through Dadima
Capital (P) Ltd, which is an entity where promoter of MCL, Shri Narendra
Shah, was also director of the said Company. In order to deal with the
submissions of the Noticee, it is necessary to examine the transactions of
the Noticee along with the evidences submitted in his support. Firstly, I note
that the Noticee had his own demat account during the period of investigation
and was also holding shares of few companies in such account which
supports his claim that he is not a regular trader. It is clear from the pattern
of its trading that he has knowledge that shares purchased would get credited
in his demat account and therefore it cannot be said that he is not aware of
the trading dynamics of share market, as claimed.

Adjudication Order in the matter of Mindvision Capital Ltd., Page 18 of 26

 22. In light of this observations, I now proceed to examine whether the Noticee
who admittedly bought 30,000 shares of MCL Shares on BSE, through G R
Pandya Share Broking Ltd on April 8, 2009 had received such shares in his
demat account after the said purchase. As per the submissions made by the
Noticee and also upon perusal of demat account statement submitted before
me, I note that there is no evidence on record or evidence produced before
me that the Noticee had received shares in any of his demat account.
Further, as per the copy of the contract note, it is clear that the Noticee made
payment on April 10, 2009 and therefore it is implicit that any rational and
prudent investor, especially when he has his demat account, would demand
delivery of shares and would not keep shares with any broker. It is an
admitted position that the Noticee had not received any shares in his demat
account immediately after purchase of shares. However, I note that the
Noticee received 30,000 shares from Dadima Capital (P) Ltd, a promoter
related entity (one of the connected entities), after a gap of more than 9
months from the date of purchase of shares from his broker. Further, I also
note from the bank account (held with union bank of india bearing account
no 414502010007561) of the Noticee submitted before me that the cheque
no 748328 which was alleged to have been received by broker on April 10,
2009 (as per contract note) was actually paid on December 17, 2009 just 5
days before the date of sale of shares. It is pertinent to note from the contract
cum bill note furnished by the Noticee, wherein the Noticee had written by
hand that cheque no. 748328 for an amount of ` 3,46,122.93 was paid on
April 10, 2009, whereas the amount was paid on December 17, 2009 as
evident from the bank account statement. Thus, I note that the Noticee
misled by giving false information that he had paid on April 10, 2009 for
acquisition of 30,000 shares, whereas actual payment was made after more
than 9 months from the date of alleged purchase of shares as stated in the
contract note submitted before me. In view of the apparent contractions in
submissions in details of payments made, failure to receive shares in demat
account after alleged purchase, receipt of shares in off market from promoter
related entity just a day prior to sale of shares clearly demonstrates that the
Noticee was fully aware of the scheme of things and facilitated routing of

Adjudication Order in the matter of Mindvision Capital Ltd., Page 19 of 26

 promoter related shares through his demat account to disturb the trail of the
actual owner of shares. I also note from the funds flow observed from the
bank account statement of the Noticee, that just three days before debit of `
3,46,122.93, an amount of ` 3,50,000 was received in his bank account. Prior
to credit of ` 3,50,000 in his bank account, the Noticee was having a balance
of ` 5,802.64 only which was inadequate to buy 30,000 shares of MCL.
Similarly, I also note that entire sale proceeds of ` 20,30,813, pursuant to
sale of shares on the market, received from the broker were further
transferred next day. From the above trail of funds, it raises an eyebrow as
regards the actual source of funds for purchase of shares and ultimate
beneficiary of the sale proceeds.

23. In view of the foregoing, it is established that the Noticee indulged in circular
trading by receiving shares in off-market from the connected entity and
subsequently sold shares in on market to the connected entity for creation of
artificial volume in the scrip of MCL, thereby violating the provisions of SEBI
(PFUTP) Regulations, 2003.

24. Details of other circular trades between the entities of sub-group 1 and sub-
group 2 and their contribution to the day’s market volume are given below:

Name of Date of No. of Entity to Date on Quantity Counterparty Market % of

entity off- shares whom which of shares volume circular
(sub- market transferred shares shares sold (sub-group 1) on the trade to
group 1) transfer transferred sold by date market
(B) in volume
(sub-group market
2)
(A) (B) (C) (D) (C) as % of
(D)
Dadima 11/08/09 5,000 Pooja Vinay 18/08/09 5,000 Nilesh 10,503 47.60
Capital P Jain Krushna
Ltd. Palande
Dadima 21/08/09 7,000 Pooja Vinay 25/08/09 4,100 Nilesh
Capital P Jain Krushna
Ltd. Palande
21,400 32.71
2,900 Universal
Credit &
Securities Ltd.
Dadima 27/08/09 7,000 Chandan 31/08/09 5,000 Nilesh 16,887 29.61
Capital P Shrichand Krushna
Ltd. Jain Palande

Adjudication Order in the matter of Mindvision Capital Ltd., Page 20 of 26

 Name of Date of No. of Entity to Date on Quantity Counterparty Market % of
entity off- shares whom which of shares volume circular
(sub- market transferred shares shares sold (sub-group 1) on the trade to
group 1) transfer transferred sold by date market
(B) in volume
(sub-group market
2)
02/09/09 2,000 Nilesh 6,182 32.35
Krushna
Palande
Dadima 04/09/09 5,000 Chandan 09/09/09 5,000 Universal 6,700 74.63
Capital P Shrichand Credit &
Ltd. Jain Securities Ltd.
Dadima 13/11/09 6,000 Pragjibhai 23/11/09 6,000 Fast Track
Capital P Mohanbhai Entertainment
Ltd. Sukhadiya Ltd.
Dadima 13/11/09 18,000 Manjulaben P 23/11/09 4,152 Fast Track
Capital P Sukhadiya Entertainment 34,282 30.19
Ltd. Ltd.
198 Mahesh
Ramanlal
Shah
Kumar 03/12/09 8,500 Chandan 04/12/09 8,500 Nilesh 14,042 60.53
Raichand Shrichand Krushna
Madan Jain Palande
Dadima 04/12/09 18,000 Pooja Vinay 07/12/09 6,435 Universal
Capital P Jain Credit &
Ltd. Securities Ltd.
07/12/09 5,000 Fast Track
Entertainment 32,605 55.21
Ltd.
07/12/09 6,565 Nilesh
Krushna
Palande
Dadima 22/12/09 30,000 Ramchand 22/12/09 26,395 Nilesh
Capital P Tehikandas Krushna 59,533 44.34
Ltd. Chettija HUF Palande

25. This circular nature of trading by the aforesaid entities is spread over the
period from July 27, 2009 to December 22, 2009. The total volume that was
contributed by the circular trading was 94,745 shares which is 12.5% of the
total market volume during the aforesaid period.

26. Further analysis of the trades indicated that the volume traded by the said
entities through circular trades contributed to a significant percentage of that
day’s volume, on some days even going up to 75% of the day’s volume. I
note that the off-market transfer of shares inter-se does not constitute as
illegal transaction. However, in the facts and circumstances brought out in
my above findings, more particularly the fact that the off-market transfers and

Adjudication Order in the matter of Mindvision Capital Ltd., Page 21 of 26

 further on market transfer of shares among the connected entities cannot be
considered as a mere coincidence. The aforesaid trading pattern by the
Noticee does imply collusion, meeting of minds and fraudulent intent to
create artificial volume in the scrip of MCL. I am of the considered view that
the off-market transfers and further on market transfers by the Noticee
among the connected entities, was the whole scheme of manipulating the
volume in the scrip. Therefore, from the trading pattern of the Noticee, I
conclude that the Noticee indulged in circular trades with one leg in off-
market and one leg in the market, which had resulted in creation of artificial
volume in the scrip of MCL, leading to false and misleading appearance of
trading in the scrip.

27. In this connection, I would like to quote the order of Hon’ble Securities
Appellate Tribunal in the matter of Monika Jain Vs. Ms. Barnali Mukherji,
Adjudicating Officer SEBI decided on 11.02.2011, which reads as under:

“…A circular trade is a fictitious trade which is executed on the trading

screen of the exchange which does not result in the transfer of beneficial
ownership in the traded scrip. Such trades only create false or misleading
appearance of trading in the securities market and thereby lure the lay
investors to jump into the fray…”

28. I am of the considered view that the scheme, plan, device and artifice
employed by the Noticee in this case of circular trading, tantamount to fraud
on the securities market in as much as it involves manipulative transactions
in securities and misuse of the securities market.

29. The manipulative / deceptive transactions of the Noticee is, prima-facie,

covered under the definition of 'fraud' and the dealings of the Noticee as
discussed herein above were “fraudulent”, as defined under regulation
2(1)(c) of the SEBI (PFUTP) Regulations, 2003 and prohibited under the
provisions of Regulations 3(a), (b), (c) and (d) and 4(1), 4(2)(a) and (g)
of SEBI (PFUTP) Regulations, thereof.

Adjudication Order in the matter of Mindvision Capital Ltd., Page 22 of 26

 30. I note that in the screen based trading, the manipulative or fraudulent intent
can be inferred from various factors such as conduct of the party, pattern of
transactions, etc., In this context, I deem it appropriate to refer to the
Hon’ble SAT order dated July 14, 2006, in the case of Ketan Parekh vs.
SEBI (Appeal no. 2/2004), wherein, Hon’ble SAT has observed that:

"The nature of transactions executed, the frequency with which such

transactions are undertaken, the value of the transactions, the conditions
then prevailing in the market are some of the factors which go to show the
intention of the parties. This list of factors, in the very nature of things, cannot
be exhaustive. Any one factor may or may not be decisive and it is from the
cumulative effect of these that an inference will have to be drawn."

31. In this connection, I would like to quote the observations made by the Hon’ble
Supreme Court in the matter of SEBI vs. Rakhi Trading Private Ltd., in Civil
appeals no., 1969 of 2011 with Civil Appeal Nos., 3174-3177 of 2011 and
Civil Appeal No., 3180 of 2011 decided on February 8, 2018, which reads as
under:

“the price discovery system itself was affected by synchronization and rapid
reverse trade, which also had the impact of excluding other investors from
participating in the market. The Supreme Court, therefore found that the
traders having engaged in a fraudulent and unfair trade practice while
dealing in securities, are hence liable to be proceeded against for violation
of Regulations 3(a), 4(1) and 4(2)(a) of PFUTP Regulations”.

32. In view of the findings which indicts the role of the Noticee in creation of
artificial volume by way of circular trading and in view of the judgements of
Hon’ble Apex Court and Hon’ble SAT as discussed above, I conclude that
the Noticee has violated the provisions of Regulation 3 (a), (b), (c), (d), 4(1),
4(2) (a) & 4(2) (g) of SEBI (PFUTP) Regulations, 2003.

ISSUE-II: Whether the Noticee is liable for monetary penalty under

Section 15HA of the SEBI Act (as applicable)?

Adjudication Order in the matter of Mindvision Capital Ltd., Page 23 of 26

 33. It is established that the acts of Noticee by indulging in circular trades were
not just a coincidence and the same indicates the concerted effort and
manipulative intent to crate false and artificial volume of the scrip, along with
the connected entities. The trading pattern of the Noticee, who is part of a
group connected to each other, was with the intention to operate only as a
device to create false, misleading appearance of trading and also to create
artificial volume in the scrip of MCL, which is in violation of the provisions of
Regulations 3 (a), 3(b), 3(c), 3 (d), 4 (1), 4 (2) (a), and 4 (2) (g) of SEBI
(PFUTP) Regulations, 2003. Therefore, the Noticee is liable for monetary
penalty under Section 15HA of SEBI Act, the provisions of which are
furnished hereunder.

Section 15HA of SEBI Act - Penalty for fraudulent and unfair trade
practices

“If any person indulges in fraudulent and unfair trade practices relating
to securities, he shall be liable to a penalty which shall not be less than
five lakh rupees but which may extend to twenty five crore rupees or
three times the amount of profits made out of such practices, whichever
is higher”.

ISSUE III: If so, what quantum of monetary penalty should be imposed

on the Noticee?

34. While determining the quantum of monetary penalty under Section 15HA of
SEBI Act, I have considered the factors stipulated in Section 15-J of SEBI
Act, which reads as under:

Section 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;

Adjudication Order in the matter of Mindvision Capital Ltd., Page 24 of 26

 (c) the repetitive nature of the default.

35. The material made available on record has not quantified the amount of
disproportionate gain or unfair advantage made by the Noticee and the loss
suffered by the investors as a result of their trading pattern, which was
fraudulent. There is also no material made available on record to assess the
amount of loss caused to investors or the amount of disproportionate gain or
unfair advantage made by the Noticee. It is difficult, in cases of such nature,
to quantify with mathematical precision the disproportionate gains or unfair
advantage enjoyed by an entity and the consequent loss suffered by the
investors or group of investors also cannot be quantified on the basis of
available facts and data. Even though the monetary loss to the investors
cannot be computed, any manipulation in the volume or price of the stocks
caused by vested interest always erodes investor confidence in the market
so that investors find themselves at the receiving end of market
manipulators. Hence, anyone could have been carried away by the unusual
fluctuations in the volume/price and been induced into investing in the said
scrip. Besides, this kind of activity seriously affects the normal price
discovery mechanism of the securities market. People who indulge in
manipulative, fraudulent and deceptive transactions, or abet the carrying out
of such transactions which are fraudulent and deceptive, should be suitably
penalized for the said acts of omissions and commissions.

ORDER

36. Having considered all the facts and circumstances of the case, I, in exercise
of the powers conferred upon me under Section 15I of the SEBI Act read with
Rule 5 of the SEBI Adjudication Rules, hereby impose monetary penalty of
`5,00,000/- (Rupees Five lakhs only) on the Noticee i.e., Ramchand
Tahikandas Chhetija HUF, under Section 15HA of SEBI Act.

37. The said penalty imposed on the Noticee, as mentioned above, shall
commensurate with the violation committed and acts as a deterrent factor for
the Noticee and others in protecting the interest of investors.

Adjudication Order in the matter of Mindvision Capital Ltd., Page 25 of 26

 38. The Noticee shall remit / pay the said amount of penalty within 45 days of
receipt of this order either by way of Demand Draft in favour of “SEBI -
Penalties Remittable to Government of India”, payable at Mumbai, OR
through e-payment facility into Bank Account the details of which are given
below:

Account No. for remittance of penalties levied by Adjudication Officer

Bank Name State Bank of India

Branch Bandra-Kurla Complex
RTGS Code SBIN0004380
Beneficiary SEBI – Penalties Remittable To Government of
Name India
Beneficiary 31465271959
A/c No

39. The Noticee shall forward said Demand Draft or the details / confirmation of
penalty so paid through e-payment to the Deputy General Manager,
Enforcement Department-1, DRA-IV, SEBI, in the format as given in table
below:
Case Name
Name of Payee
Date of payment
Amount Paid
Transaction No
Bank Details in which payment is made
Payment is made for (like Penalty
penalties/disgorgement/recovery/Settlement
amount and legal charges along with order
details)

40. In terms of rule 6 of the SEBI Adjudication Rules, copies of this order are
sent to the Noticee and also to SEBI.

Date: 28 February 2019 B J DILIP

Place: Mumbai Adjudicating Officer

Adjudication Order in the matter of Mindvision Capital Ltd., Page 26 of 26