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Judgment
Tarun Agarwala, Presiding Officer
The aforesaid appeals have been filed against a common order dated 24.01.2019 passed by the Adjudicating Officer (AO) imposing a penalty of Rs.25 lakhs for manipulating the price of the scrip during the period 15.11.2012 to 9.10.2014.
The AO, after considering the replies and the material evidence on record, came to the conclusion that the appellants had contributed to the LTP on 14 trades across eight dates. Further, the appellants had contributed to a new high price (NHP) across ten trades and, therefore, came to the conclusion that the appellants had manipulated the price of the scrip.
We have heard Mr. Neville Lashkari, Advocate assisted by Mr. Rihal Kazi and Mr. Harshad Virkar, Advocates for the appellant and Mr. Kumar Desai, Advocate assisted by Mr. Abhiraj Arora, Mr. Karthik Narayan and Ms. Rashi Dalmia, Advocate for the respondent.
The contention of the appellants is that the AO only focused on the trades executed by the appellants which were higher than the LTP. It was contended that the appellants are large traders and volume of trading is very high and that there were hundreds of trades which were lower than the LTP or were at par with LTP. It was contended that the AO did not consider these trades and only focused on the trades which were above the LTP and, in any case, these trades were miniscule which did not impact the price of the scrip.
The Ld. Counsel for the appellants also pointed out that the AO has given a finding that the LTP was Rs.26 as is reflected in the Table on page 5 of the impugned order. It was contended that no evidence has been given by the AO as to how he has arrived at that figure.
We have perused the impugned order and we find from the Table the buy order and sell order has been given and the difference between the two prices can be seen but in the last column, the AO has given a figure of Rs.26 above the LTP. Having read the entire order we do not find any evidence or discussion to show as to how this figure was arrived at. Upon a query raised by us, the Ld. Counsel for the Respondent failed to give a satisfactory reply and only contended that the figure must have been arrived at from the log trades. Be that as it may. The charge leveled against the appellants is that they contributed to the LTP and, thereby, manipulated the price of the scrip. This charge should have been elaborated by a discussion of the evidence on record showing the increase of LTP which, in the instant case, is lacking. Therefore, in our opinion, the impugned order cannot be sustained and is being set aside on this short ground. The Appeals are allowed.
The matter is remitted to the AO to decide the matter afresh in the light of the observations made aforesaid. While reconsidering the matter, the AO will also take into consideration the total number of trades executed by the appellants which were below LTP or at par with LTP and consider the impact of these trades while giving a finding as to whether the appellants had indulged in the manipulation of the price of the scrip.
The present matter was heard through video conference due to Covid-19 pandemic. At this stage it is not possible to sign a copy of this order nor a certified copy of this order could be issued by the registry. In these circumstances, this order will be digitally signed by the Private Secretary on behalf of the bench and all concerned parties are directed to act on the digitally signed copy of this order. Parties will act on production of a digitally signed copy sent by fax and/or email.