Tripta Bhandari vs Securities And Exchange Board Of India

M. T. Joshi, J

For the reasons stated in the misc. application, the delay in the filing of the appeal is condoned. The Misc. Application No. 443 of 2019 is allowed

Aggrieved by the order dated January 17, 2019 confirming the ad-interim order dated March 20, 2018 passed by the Whole time Member

(“WTM†for convenience) of the Securities and Exchange Board of India (“SEBI†for convenience) in terms of Section 19 of the SEBI Act,

1992 read with Sections 11, 11B and 11D thereby the present appeal is filed by original noticee no. 8.

The ad-interim order as refereed above was as under:-

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a. Ficus Securities Pvt. Ltd., Ficus Commodities Pvt. Ltd., Mr. Vinod Kumar Bansal, Mr. Surender Singh, Ms. Neena Bansal, Mr. Prashant Kumar

Nayak, Ms. Poonam Rajbhar, Ms. Tripta Kapoor and Ms. Shabnam John are restrained from accessing the securities market and are further

prohibited from buying, selling or otherwise dealing in securities, either directly or indirectly, or being associated with the securities market in any

manner whatsoever, till further directions;

b. The aforesaid entities and persons shall cease and desist from undertaking any activity in the securities market, directly or indirectly, in any manner

whatsoever till further directions;

c. The aforesaid entities and persons are directed to provide a full inventory of all their assets, whether movable or immovable, or any interest or

investment or charge in any of such assets, including details of all their bank accounts, demat accounts and mutual fund investments immediately but

not later than 5 working days from the date of receipt of these directions.

d. The aforesaid entities and persons are directed not to dispose of or alienate any assets, whether movable or immovable, or any interest or

investment or charge in any of such assets excluding money lying in bank accounts except with the prior permission of SEBI.

e. Till further directions in this regard, the assets of these entities shall be utilized only for the purpose of payment of money and/or delivery of

securities, as the case may be, to the clients/investors under the supervision of the concerned stock exchange(s).

f. The depositories are directed to ensure that no debits are made in the demat accounts, held jointly or severally, of the aforesaid entities and persons

except for the purpose mentioned in sub-para (e) after confirmation from the concerned stock exchange in this regard.â€​

The facts and brief are that Ficus Securities Pvt. Ltd. (hereinafter referred to as “the Company†or “Ficusâ€) was working as a stock

broker with National Stock Exchange of India Ltd. (“NSEâ€), Bombay Stock Exchange Ltd. (“BSEâ€), Metropolitan Stock Exchange of India

Ltd. (“MSEIâ€) as well as, as a Depository Participant of Central Depository Services Ltd. (“CDSLâ€). Its registered office was at New Delhi

as detailed in the impugned order. While one Mr. Vinod Kumar Bansal and Mr. Surender Singh were the present directors during the relevant period

i.e. in the year 2017 the present appellant along with some other entities as detailed in the impugned order are the past directors. In the year 2017 it

was found that the company had engaged in various irregularities of misappropriation of the client securities, funds, non-settlement of the client

accounts, false reporting of margin, non-disclosure of the DP account details to the exchange, non-maintaining sufficient balances in bank account to

cover the client credit balances etc. NSE therefore, on the basis of inspection report had taken action of sending the said inspection report to the

respondent SEBI. Respondent SEBI also conducted a surprise inspection on January 23, 2018. During inspection none of the directors or any of the

broker was present. Only 5 employees were carrying some mutual fund distribution related work. Compliance officer had already left the job. When

back office data etc. was inspected by SEBI personnel for a period from April 01, 2015 till January 23, 2018, it confirmed that no funds or securities

were available. Further, there was unexplained transfer of funds from the company with another sister company namely Ficus Commodities Pvt. Ltd.

(hereinafter referred to as “FCPLâ€). Therefore various observations were made of violation of various Circulars as detailed in paragraph no. 7 of

impugned order. From the impugned order it appears that Mr. Vinod Kumar Bansal, the director was also arrested in the criminal case launched on

this fact.

The learned WTM had eventually passed the interim order dated March 20, 2018 as detailed (supra). After hearing all the noticees including the

present appellant the confirmatory order as detailed (supra) came to be passed.

The case of the appellant Tripta Bhandari (Kapoor) in the situation is as under:-

That in the year 2004 Mr. Vinod Kumar Bansal, had directed her to become the director in the Company, Ficus. Therefore since 2006 she became the

director of Ficus. In fact she was merely an employee of the company whose job was to do trading, opening the account of clients; carrying back up

work with the stock exchanged etc. Regular salary was being paid and memos were issued to her if she reported late to the office some times. Her

provident fund account was also opened and deduction from the salary used to be there. All the documents in this regard like salary slips, passbook of

the Employees Provident Fund Organisation, identity card of the employee were filed on record. During personal hearing she submitted that she was

director for a period from October 06, 2006 to November 03, 2017.

The learned WTM however did not agree with the submission. It was noted that the appellant had attended five Board meetings of the Ficus for the

period 2015-2016. As a director she was designated-director of the Ficus for the purposes of all the statutory and regulatory filing. Her digital

signature was found on the annual returns and balance sheets in the e-filings on the MCA portal. Beside this, Form-MGT 7 dated November 14, 2016

filed on behalf of Ficus would shows that appellant Tripta was 49% shareholder of the Ficus. Therefore, finding no merit in the submissions of the

appellant the confirmatory order came to be passed in the present appeal.

Heard Mr. Amit Gupta, the learned counsel assisted by Ms. Kapila Mahendroo, Advocate for the Appellant and Mr. Suraj Chaudhary, the learned

counsel assisted by Mr. Abhiraj Arora, Mr. Karthik Narayan and Ms. Rashi Dalmia, Advocates for the Respondent.

Mr. Amit Gupta advocate, submitted that appellant was merely an employee and was appointed as a director merely for the namesake. In any of

the bank accounts of the company she was not the signatory and all the work used to be looked after by Mr. Vinod Kumar Bansal and submitted that

the WTM had wrongly found her responsible for the misconduct of others.

On the other hand, learned counsel for the respondent submitted that all the record would show that the appellant was employee as well as director.

She was responsible for all regulatory filing as is evident from the documents. She was 49% shareholder of the company, attending board meetings,

signing annual financial reports and therefore she can not escape from the liability.

Upon hearing both the sides, we find that there is no merit in the appeal. The documents clearly show that the appellant was 49% shareholder and

active directoor of the Ficus during the relevant period. She was signatory to the statutory filing with the various public bodies. Thus, she was

employee-cum-director during the relevant period. Therefore, she would be fully responsible along with other noticees for the default committed by the

company.

In the result the following order:

ORDER

The appeal is hereby dismissed without any order as to costs.

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.