BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

(ADJUDICATION ORDER NO: OIAE/EAD-3/AO/DRK-ASR/724/49-2015)

______________________________________________________________
UNDER SECTION 15-I OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
ACT, 1992 READ WITH RULE 5 OF THE SECURITIES AND EXCHANGE BOARD
OF INDIA (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES
BY ADJUDICATING OFFICER) RULES, 1995.
In respect of:
Hotel Rugby Ltd
6, Stadium House,
V. N. Road, Churchgate,
Mumbai 400 020
---------------------------------------------------------------------------------------------------------------FACTS IN BRIEF:
1. Securities and Exchange Board of India (hereinafter referred to as SEBI)
observed that Hotel Rugby Limited. (hereinafter referred to as 'the Noticee / the
Company / HRL") had not redressed an investor grievance pending for more than
two years in SEBI Complaints Redressal System (hereinafter referred to as
SCORES).
APPOINTMENT OF ADJUDICATING OFFICER:
2. I was appointed as Adjudicating Officer under Section 15-I of the Securities and
Exchange Board of India Act 1992 (hereinafter known as 'SEBI Act') read with
Rule 3 of the 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 15C of the SEBI Act for the alleged
violation of non-redressal of an investor grievance by the Noticee and the same
was communicated vide proceedings of Whole Time Member appointing
Adjudicating Officer dated May 21, 2013.
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SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING:

3. A Show Cause Notice No. A&E/EAD-3/DRK-VVK/18971/2013 dated July 30, 2013
(hereinafter referred to as SCN) was served upon the Noticee on August 05,
2013 by Hand Delivery Acknowledgment Due (hereinafter referred to as HDAD)
under Rule 4(1) of the Adjudication Rules, to show cause as to why an inquiry
should not be held against the Noticee and why penalty, if any, should not be
imposed under Section 15C of the SEBI Act, for the alleged violation of non
redressal of an investor grievance by the Noticee in SCORES. The complaint was
received by SEBI from Shri S N Singh (hereinafter referred to as the complainant
/ Singh) on October 05, 2010 for issuance of duplicate share certificates for 200
shares of HRL.
4. The following was alleged in the aforesaid SCN;
(a) Vide letter dated January 22, 2013, SEBI had earlier advised the Noticee to
resolve the investor grievance of Singh. It was also mentioned in the said letter
that if the Noticee fails to redress the complaint, SEBI may take action against the
Noticee under Sections 15C and 24 of the SEBI Act.
(b) SCN also refers to SEBI's letter dated February 15, 2013 wherein the Noticee was
once again advised to resolve the aforesaid investor grievance of Singh, failing
which SEBI may initiate Regulatory Actions against the Noticee which includes
debarring from securities market and or / imposing penalty.
(c) It was stated in the SCN that as on May 24, 2013, an investor grievance was
pending against the Noticee for more than two years in SCORES and the Noticee
had not approached SEBI for the SCORES authentication.
(d) In view of the above, it was alleged in the SCN that the Noticee had failed to
resolve an investor grievance within the stipulated time inspite of Noticee being
called upon by SEBI in writing to do so and the same is in violation of Section 15C
of the SEBI Act. The provision of Section 15C of the SEBI Act is reproduced
hereunder;
Penalty for failure to redress investors grievances
15C. If any listed company or any person who is registered as an intermediary, after
having been called upon by the Board in writing, to redress the grievances of investors,
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fails to redress such grievances within the time specified by the Board, such company or
intermediary 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.
5. The reply dated August 09, 2013 of the Noticee to the aforesaid SCN was
received on August 14, 2013. Following submissions were made by the Noticee in
its aforesaid reply:
(a) The Noticee had redressed the complaint of the investor and the complaint has
been finally disposed on March 28, 2013.
(b) The Noticee submitted the copy of ATR with respect to the complaint of Singh. It
was stated in the aforesaid ATR that Share Transfer Agent of the Noticee
(hereinafter referred to as 'STA') had sent a letter dated November 24, 2009 to
Singh for furnishing copies of duly notarized Indemnity Bond, Surety Page,
Affidavit and other relevant documents. The aforesaid documents were not
received by the Noticee from Singh without which the Noticee could not have
moved ahead in the matter. Even if the Noticee tried to expedite the matter, due to
non-receipt of aforesaid documents from Singh, it could not proceed further.
(c) The Noticee sent letter dated February 21, 2013 to Singh requesting him to
provide copy of documents such as Indemnity Bond, Surety Page, Affidavit and
other supporting documents to proceed further in the matter. Company also sent
reminders to complainant dated March 26, 2013 and April 15, 2013. However,
there was no response from Singh to the aforesaid letters. The Noticee in its reply
provided copies of its aforesaid letters dated February 21, 2013, March 26, 2013
and April 15, 2013 along with the proofs of dispatch. All the aforesaid letters were
dispatched by the STA through Speed Post.
(d) The company has activated SCORES and filed the requisite Action Taken Report
(hereinafter referred to as "ATR").

6. For the purpose of inquiry, an opportunity of hearing was granted to the Noticee on
April 23, 2014 at SEBI Bhavan, Mumbai vide hearing notice dated April 11, 2014.
The said hearing notice was served on the Noticee through Registered Post
Acknowledgement Due and the proof of service of the same is on record. In
respect of the said hearing notice, an email dated April 22, 2014 was received
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from the Noticee informing about its inability to appear at the scheduled time for
the hearing. Thereafter, another letter dated April 26, 2014 was received from the
Noticee on April 28, 2014. In the aforesaid letter, Noticee reiterated submissions
made vide its reply dated August 09, 2013 and requested for appearance in the
said matter to put up the matter before Adjudicating Officer personally.
7. As requested by the Noticee, another opportunity of hearing was granted to the
Noticee on July 14, 2014 at SEBI Bhavan, Mumbai vide hearing notice dated June
25, 2014 which was served on the Noticee by HDAD on June 26, 2014. In the
aforesaid hearing notice, it was stated that if no appearance is made by the
Noticee on the scheduled date of hearing, then, the matter would be decided on
the basis of evidence available on records. In respect of notice of hearing dated
June 25, 2014, an email dated July 14, 2014 was received from the Noticee
confirming that Shri Mahendra R. Thacker

(Director of the Noticee) and Shri

Sudesh Kumar V. Joshi (Chartered Accountant) (hereinafter collectively referred to

as "ARs") would be appearing on the date of hearing.
8. The aforesaid hearing on July 14, 2014 was attended by the ARs, who reiterated
the submission made by the Noticee in its replies dated August 09, 2014 and April
26, 2014. ARs also submitted that another letter dated June 09, 2010 was sent by
the STA to Singh wherein, Singh was informed that procedure for issue of
duplicate share certificates has already been sent to him vide letter dated
November 24, 2009 and he was requested to provide the relevant documents to
enable the STA to issue duplicate share certificates in lieu of the original share
certificates.

CONSIDERATION OF EVIDENCE AND FINDINGS:

9. I have taken into consideration the facts and circumstances of the case and the
material available on record.
10. It is noted from the available records / SCORES printout as provided by the
concerned department of the SEBI that the complaint of Singh was forwarded by
SEBI to the Noticee for redressal of grievance on October 12, 2010. The Noticee
filed ATR in respect of the said complaint stating that the STA had asked Singh
vide its letters dated November 24, 2009 and June 09, 2010 to furnish duly
notarized Indemnity Bond, Surety Page, Affidavit and other relevant documents
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which are required for issuance of duplicate share certificates. Singh in his reply to
the aforesaid letters of STA claimed that he had already sent the required
documents to the company. As observed from the ATR, STA vide letter dated
June 28, 2011 requested Singh to provide proof of dispatch of the documents.
However, no reply was received from Singh by the Noticee or STA. During the
course of Adjudication Proceedings, vide letters dated February 13, 2015, (the
date in the aforesaid letter was inadvertently mentioned as January 13, 2015) and
March 10, 2015, Noticee was advised to submit copies of letters dated November
24, 2009 and June 28, 2011 sent to the complainant by its STA. In response to the
aforesaid letters, the Noticee provided the copy of only STA's letter dated
November 24, 2009.
11. Over here, it is relevant to mention that the complaint of Singh was forwarded by
SEBI to the Noticee on October 12, 2010. The complaint was regarding issuance
of duplicate share certificates. From the records available it is observed that the
Noticee had already sent letters dated November 24, 2009 and June 09, 2010 to
Singh informing him about the procedure involved and documents required for
issuance of duplicate share certificates, in response to the earlier complaints filed
by Singh directly to the Noticee. Therefore, Noticee had taken steps towards
redressal of the complaint of Singh even before Singh had filed the complaint with
SEBI and SEBI had forwarded it to the Noticee. From the material available on
record, it is noted that Singh had claimed that he had provided the relevant
documents to the Noticee for issuance of duplicate share certificates, but did not
provide any proof of dispatch of such documents to STA or Noticee. Thereafter, as
directed by the concerned department of SEBI, Noticee sent reminder letters
dated February 21, 2013, March 26, 2013 and April 15, 2013 to Singh. However,
Singh did not respond to the any of the aforesaid reminders sent by the Noticee.
The complaint was finally ' disposed of '

by SEBI on August 28, 2013 on

SCORES.
12. In respect to non activation of SCORES authentication, from the material provided
by the concerned department of SEBI, it is noted that as stipulated in various SEBI
circulars, the Noticee was required to obtain SCORES authentication latest by
September 14, 2012 whereas Noticee had obtained SCORES authentication on
September 15, 2011 i.e. much before the timeline stipulated by the SEBI and the
same was confirmed by the concerned department of SEBI.
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13. In view of the above facts, it is difficult to establish the allegation of non-redressal
of investor grievance against the Noticee.
14. Therefore, from the aforesaid facts, available records and after considering the
case in entirety, I am of the view that it is difficult to establish the alleged violation
of provision of Section 15C of the SEBI Act by the Noticee.
ORDER:

15. Considering the facts and circumstances and the material made available on
record, the alleged violation of Section 15C of the SEBI Act, 1992 is difficult to
establish against Hotel Rugby Limited in the present adjudication proceeding and
accordingly the present adjudication proceeding is disposed of.

16. In terms of the provisions of Rule 6 of the Securities and Exchange Board of India
(Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer)
Rules 1995, copy of this order is being sent to Hotel Rugby Ltd having office at 6,
Stadium House, V. N. Road, Churchgate, Mumbai 400 020 and also to the
Securities and Exchange Board of India, Mumbai.

Date: March 30, 2015

D. RAVI KUMAR

Place: Mumbai

CHIEF GENERAL MANAGER &

ADJUDICATING OFFICER

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