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BEFORE THE ADJUDICATING OFFICER
SECURITIES AND EXCHANGE BOARD OF INDIA

ADJUDICATION ORDER NO. JJ/AM/AO174-176/2014
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:
Name
PAN
Order Number
Ms. Kokilaben Patel
AWOPP8899A
JJ/AM/AO-174/2014
Ms. Sushila Purushottambhai Patel
ANZPP9934A
JJ/AM/AO-175/2014
Mr. Purushottambhai Tulsidas Patel
ACMPP3103H
JJ/AM/AO-176/2014
In the Matter of:
Shree Surgovind Tradelink Limited

BACKGROUND
1. An Open Offer was made by Mr. Virat Sevantilal Shah, Mr. Alok Virat Shah
and Mr. Rajan Sevantilal Shah (Acquirers) to acquire 26% shares of
Shree Surgovind Tradelink Limited (Target Company) in terms of SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011
(SAST Regulations, 2011) to the shareholders of the Target Company
and Public Announcement for the same was issued on February 05, 2013.
The shares of the Target Company are listed at Bombay Stock Exchange
(BSE) and Ahmedabad Stock Exchange (ASE).
2. While examining the offer document pertaining to the afore-mentioned
Open Offer, SEBI observed the following non compliances of Regulation
7(1A) read with 7(2) of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997 (SAST Regulations, 1997).
3. Following non-compliances with regard to provisions of Chapter II of the
SAST Regulations, 1997 was observed.
Adjudication Order in respect of Kokilaben Patel, Sushila Purushottambhai Patel and Purushottambhai
Tulsidas Patel in the matter of Shree Surgovind Tradelink Limited
Page 1 of 8
December 31, 2014
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By Promoter Group:
Name of the acquirer
Kokilaben Patel
Sushila
Purushottambhai Patel
Purushottambhai
Tulsidas Patel
Regulation Due date for Actual date

compliance
of
compliance
7(1A)/7(2) 18.01.2009
08.06.2012
Delay (in
no
of
days)
1237
7(1A)/7(2)
21.03.2009
08.06.2012
1175
7(1A)/7(2)
02.08.2009
08.06.2012
1041
4. Shri Piyoosh Gupta was appointed as the Adjudicating Officer vide order
dated July 24, 2013 and the said appointment was conveyed vide
proceedings of the Whole Time Member dated August 19, 2013 to inquire
and adjudge under Section 15A(b) of the SEBI Act, 1992, the violations of
provisions of Regulation 7(1A) read with 7(2) of SAST Regulations, 1997
read with Regulation 35 of SAST Regulations, 2011 alleged to have been
committed
by
Ms.
Kokilaben
Patel
(Kokilaben),
Ms.
Sushila
Purushottambhai Patel (Sushilaben) & Mr. Purushottambhai Tulsidas

Patel (Purushottambhai) (collectively referred as Promoter Group /
Noticees). Pursuant to the transfer of Shri Piyoosh Gupta, the
undersigned was appointed as Adjudicating Officer vide Order dated
November 08, 2013.
SHOW CAUSE NOTICE, HEARING & REPLY
5. Show Cause Notices (SCNs) in terms of the provisions of Rule 4(1) of SEBI
(Procedure for Holding Inquiry and Imposing Penalties by Adjudicating
Officer) Rules, 1995 (hereinafter referred to as Adjudication Rules)
were issued to the Noticees on September 17, 2013, calling upon the
Noticees to show cause why an inquiry should not be held against them
under Rule 4(3) of the Adjudication Rules for the alleged violations and
penalty be not imposed under Section 15A(b) of SEBI Act, 1992.
6. The aforesaid SCNs were duly sent to the Noticees by Speed Post. SCN
issued to Kokilaben got delivered, however, SCNs issued to Sushilaben
and
Purushottambhai
returned
undelivered.
Subsequent
to
the
appointment of the undersigned, copies of the SCNs were duly forwarded

to Sushilaben and Purushottambhai vide letters dated January 31, 2014
and the same was served by way of affixture on February 14, 2014. As no
reply was received from the Noticees, vide Hearing Notices dated July 22,
Page 2 of 8
December 31, 2014
2014, opportunity of personal hearing was granted to the Noticees on

August 07, 2014. The said Hearing Notices were duly delivered to
Sushilaben and Purushottambhai by way of affixture. However, the
Hearing Notice issued to Kokilaben returned undelivered.
7. Subsequently, vide Hearing Notices dated December 05, 2014,
opportunity of personal hearing was granted to the Noticees on
December 23, 2014. Vide letter dated December 15, 2014 the Noticees
expressed their inability to attend the hearing and inter alia made the
following submissions:
We would like to mention that we faced badly due to the business of the
company, which resulted in our poor financial position.
The transfer transaction was carried out by us to meet the financial pressure
that was received from the other party (investor). Also we were not aware
about the SEBI guidelines, as a result we did not received guidance from any
professionals. Hence, the filing of disclosure was not made on time. At, present,
we have no record with us, regarding the disclosures made with SEBI.
We stay in a small town Named unjha, Near Mehsana and there is no
Correspondence office in Ahmadabad, in operating mode since last 5 years.
Company Surgovind Tradelink Limited was not operative in Ahmadabad Stock
Exchange and Bombay Stock Exchange. The Sale and Purchase of Shares of the
Company was not Easily Executed and the investors were in much difficulty.
Companys Position was as such that it was unable to pay the annual filing fees
regularly, with the stock exchanges. The transaction which you have
mentioned in your notice has not caused any harm to the other investors and
our intension was not to do anything wrong or increase or decrease the price
or control in the Company.
The Transactions were carried out without any bad intentions. At Present, The
Company is in the hands of other Promoters.
We are suffering from financial crises and medically too. We are not fit. I
Purushottambhai is retired person having age of 60 years and a heart patient.
Also Sushilaben is also retired & 58 yrs old and also do farming. Kokilaben is
also required & 60 yrs old and also do farming.
We are enclosing herewith our PAN copies, so that you can verify our income
and our Financial Status. We are not physically fit to attend the hearing on 23rd
December; 2014. We would like to bring to your notice, that in the state of
Gujarat, people are not much aware about the SEBI norms. Also, our share
were delisted in stock exchanges couple of years back, due to some noncompliances.
Because of the Pressurization from small investors for encashment, we help
them by transferring these shares. At this time, it is not justified on the part of
SEBI to penalize fines and prosecute us. The Capital of the Company was small
and the transactions in stock exchanges were negligible.
We executed the sale transaction with clear intention to save the interest of
small investors. But somewhere we made the mistake by not filing the
disclosures on time with SEBI.
Page 3 of 8
December 31, 2014
We regret that we wont be able to attend the hearing as we are not medically
fit and so we leave all the decision for you. But you kindly go through our
request and take appropriate Action.
8. In view of the reply of the Noticees, I am proceeding with the inquiry

taking into account the material available on record.
ISSUES FOR CONSIDERATION
9. After perusal of the material available on record, I have the following
issues for consideration, viz.,
A. Whether the Noticees have violated provisions of Regulation 7(1A)
r/w 7(2) of SAST Regulations, 1997?
B. Whether the Noticees are liable for monetary penalty under Section
15A(b) of the SEBI Act, 1992?
C. What quantum of monetary penalty should be imposed on the
Noticees taking into consideration the factors mentioned in Section
15J of the SEBI Act, 1992?
FINDINGS
10. On perusal of the material available on record and giving regard to the
facts and circumstances of the case, I record my findings hereunder.
ISSUE 1: Whether the Noticees have violated provisions of Regulation
7(1A) r/w 7(2) of SAST Regulations, 1997?
11. The provisions of Regulation 7(1A) and 7(2) of SAST Regulations, 1997
read as under:
SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1997
Continual disclosures
7 (1A) Any acquirer who has acquired shares or voting rights of a company under subregulation (1) of regulation 11, or under second proviso to sub-regulation (2) of
regulation 11 shall disclose purchase or sale aggregating two per cent or more of
the share capital of the target company to the target company, and the stock
exchanges where shares of the target company are listed within two days of such
purchase or sale along with the aggregate shareholding after such acquisition or
sale.
Explanation.For the purposes of sub-regulations (1) and (1A), the term
acquirer shall include a pledgee, other than a bank or a financial institution and
such pledgee shall make disclosure to the target company and the stock exchange
within two days of creation of pledge.
Page 4 of 8
December 31, 2014
(2) The disclosures mentioned in sub-regulations (1) and (1A) shall be made within
two days of, (a) the receipt of intimation of allotment of shares; or (b) the
acquisition of shares or voting rights, as the case may be.
12. From the material available on record, I note that the shareholding of the
Promoter Group had changed as a result of the transactions mentioned
below:
Name of the
Acquirer
Date of the
transaction
Sale (-ve)/
purchase
Kokilaben Patel
16.01.2009
Sushila
Purushottambhai
Patel
Patel
Purushottambhai
Tulsidas
19.03.2009
-162,500
(3.24%)
-175,000
(3.49%)
31.07.2009
-169,300
(3.38%)
Shareholding of the
acquirer (in %)
Before
After
acquisiti acquisiti
on
on
3.24
0.00
Total promoters
shareholding in %
PrePostacquisit acquisit
ion
ion
29.84
26.60
3.99
0.05
26.60
23.10
3.38
0.00
23.10
19.72
13. From the aforesaid table I note that all the three Noticees had sold
substantial quantity of shares on different dates and had taken their
holding to zero after the transactions. Kokilaben sold more than 3% of
the shareholding of the Target Company on 16.01.2009; Sushilaben sold
more than 3% of the shareholding of the Target Company on 19.03.2009
and Purushottambhai sold more than 3% of the shareholding of the
Target Company on 31.07.2009. The Noticees were required to make the
necessary disclosures under Regulation 7(1A) of SAST Regulations, 1997
within two days of the sale of shares. However, the Noticees failed to
make the disclosures within the prescribed time limit. I note that the
Noticees have accepted their default of not making the disclosures on
time by submitting that The transfer transaction was carried out by us to
meet the financial pressure that was received from the other party
(investor). Also we were not aware about the SEBI guidelines, as a result we
did not received guidance from any professionals. Hence, the filing of
disclosure was not made on time.
14. I note that the Noticees have neither denied nor disputed the
transactions, as mentioned in the SCN, but have inter alia submitted that
Because of the Pressurization from small investors for encashment, we help
them by transferring these shares. At this time, it is not justified on the part
Page 5 of 8
December 31, 2014
of SEBI to penalize fines and prosecute us. The Capital of the Company was
small and the transactions in stock exchanges were negligible. However, I
do not find any merit in the submissions of the Noticees. The fact that the
Noticees had a legal duty of making the disclosures under Regulation
7(1A) of SAST Regulations, 1997 within the prescribed time limit and that
such non disclosure has been made penal, it is clear that the provisions of
Regulation 7(1A) of SAST Regulations, 1997 are mandatory in nature and
the Noticees cannot escape their liability.
15. Since, in the instant case, all the Noticees had individually sold shares
representing more than two per cent of the share capital of the Target
Company, they should have made disclosures under Regulation 7(1A) of
SAST Regulations, 1997 within 2 days of their transaction; which they
have failed to make. Hence, I hold that the Noticees have violated the
provisions of Regulation 7(1A) r/w 7(2) of SAST Regulations, 1997.
ISSUE 2: Whether the Noticees are liable for monetary penalty under
Section 15 A (b) of the SEBI Act, 1992?
16. The provisions of Section 15A(b) of the SEBI Act, 1992 read as under:
Penalty for failure to furnish information, return, etc.
15A. If any person, who is required under this Act or any rules or regulations made
thereunder,
(a)..
(b) to file any return or furnish any information, books or other documents within the
time specified therefore in the regulations, fails to file return or furnish the same
within the time specified therefore in the regulations, he 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. In the matter of SEBI Vs. Shri Ram Mutual Fund [2006] 68 SCL 216 (SC), the
Honble Supreme Court of India has 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 regulation is established and hence the
intention of the parties committing such violation becomes wholly
irrelevant.
18. As already observed, the Noticees violated the provisions of Regulation
7(1A) r/w 7(2) of SAST Regulations, 1997. Therefore, I find that the
Noticees are liable for monetary penalty under Section 15A(b) of the SEBI
Act, 1992.
Page 6 of 8
December 31, 2014
ISSUE 3: What quantum of monetary penalty should be imposed on the

Noticee taking into consideration the factors mentioned in Section 15J
of the SEBI Act, 1992?
19. While imposing monetary penalty it is important to consider the factors
stipulated in Section 15J of the Act, which reads as under:
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;
(c)the repetitive nature of the default.
20. In the absence of material on record, the amount of disproportionate gain

or unfair advantage made as a result of the default and the amount of loss
caused to the investors due to the said default cannot be quantified. I note
that in the reply dated December 15, 2014 the Noticees have inter alia
submitted that The transaction which you have mentioned in your notice
has not caused any harm to the other investors and our intension was not to
do anything wrong or increase or decrease the price or control in the
Company. But, the fact remains that the Noticees had failed to make the
necessary disclosures on time. Our entire securities market stands on
disclosure based regime and accurate and timely disclosures are
fundamental in maintaining the integrity of the securities market.
Further, I note that the Hon'ble Securities Appellate Tribunal (SAT) in the
matter of Mrs. Komal Nahata Vs. SEBI (Date of judgment- January 27,
2014) has observed that: Argument that no investor has suffered on
account of non disclosure and that the AO has not considered the mitigating
factors set out under Section 15J of SEBI Act, 1992 is without any merit
because firstly penalty for non compliance of SAST Regulations, 1997 and
PIT Regulations, 1992 is not dependent upon the investors actually
suffering on account of such non disclosure. The Noticees being members
of the Promoter Group of a listed company had a responsibility in
ensuring compliance with the disclosure norms under the SAST
Regulations, 1997. Also, the Noticees had made the disclosures after a
delay of more than one thousand days, which clearly shows the
lackadaisical attitude of the Noticees. Hence, the violation of the Noticees
cannot be viewed lightly.
Page 7 of 8
December 31, 2014
21. In the forgoing paragraphs, it is now established that the Noticees have
violated the provisions of Regulation 7(1A) r/w 7(2) of SAST Regulations,
1997. Considering the facts and circumstances of the case and the
violation committed by the Noticees, I find that imposing a penalty of `
3,00,000/- (Rupees Three Lakhs only) on Kokilaben; ` 3,00,000/(Rupees Three Lakhs only) on Sushilaben & ` 3,00,000/- (Rupees Three
Lakhs only) on Purushottambhai would be commensurate with the
violations committed by them.
ORDER
22. Considering the facts and circumstances of the case, in terms of the
provisions of Section 15A(b) of the SEBI Act, 1992 and Rule 5(1) of the
Adjudication Rules, I hereby impose a penalty of ` 3,00,000/- (Rupees
Three Lakhs only) on Ms. Kokilaben Patel; ` 3,00,000/- (Rupees Three
Lakhs only) on Ms. Sushila Purushottambhai Patel & ` 3,00,000/- (Rupees
Three Lakhs only) on Mr. Purushottambhai Tulsidas Patel for violation of
Regulation 7(1A) read with 7(2) of SAST Regulations, 1997 read with
Regulation 35 of SAST Regulations, 2011.
23. The penalty shall be paid by way of demand draft drawn in favour of
SEBI Penalties Remittable to Government of India payable at Mumbai
within 45 days of receipt of this Order. The said demand draft shall be
forwarded to the Division Chief, Corporate Finance Department,
Securities and Exchange Board of India, Plot No. C4-A, G Block, Bandra
Kurla Complex, Bandra (E), Mumbai 400051.
24. In terms of the provisions of Rule 6 of the SEBI (Procedure for Holding
Inquiry and Imposing Penalties by Adjudicating Officer) Rules 1995,
copies of this Order are being sent to the Noticees and also to Securities
and Exchange Board of India.
Date: December 31, 2014

Place: Mumbai
Jayanta Jash
Adjudicating Officer
Page 8 of 8
December 31, 2014

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BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

UNDER SECTION 15-I OF SECURITIES AND EXCHANGE BOARD OF INDIA

Ms. Kokilaben Patel

Ms. Sushila Purushottambhai Patel

Mr. Purushottambhai Tulsidas Patel

Shree Surgovind Tradelink Limited

Regulation Due date for Actual date

Purushottambhai Patel (Sushilaben) & Mr. Purushottambhai Tulsidas

appointment of the undersigned, copies of the SCNs were duly forwarded

2014, opportunity of personal hearing was granted to the Noticees on

8. In view of the reply of the Noticees, I am proceeding with the inquiry

ISSUE 3: What quantum of monetary penalty should be imposed on the

20. In the absence of material on record, the amount of disproportionate gain

Date: December 31, 2014

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