BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

ADJUDICATION ORDER NO. JJ/AM/AO37/2015
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:
M/s. Hartron Communications Limited
(PAN AAACH3124P)
In the Matter of: Hartron Communications Limited
_____________________________________________________________________________________________
BACKGROUND
1. Securities and Exchange Board of India (SEBI) came out with a Circular

dated June 03, 2011 dealing with the processing of investor complaints

against listed companies through SEBI Complaints Redress System

(SCORES). In terms of said Circular, all listed companies were inter alia

required to view the complaints pending against them, redress them and
submit Action Taken Reports (ATRs) electronically in SCORES. As the

SCORES is online electronic system, therefore, for the purposes of

accessing the complaints of the investors against them, as uploaded in the

SCORES, listed companies were required to login to SCORES system

electronically through a company specific user id and password, to be

provided by SEBI. For the purpose of generating said user id and

password, listed companies which were yet to obtain SCORES user id and
password, were required to submit the details for authentication to SEBI,

in the format annexed to the said Circular. However, it was observed that

Hartron Communications Limited (Noticee) did not submit the details to

SEBI which were required to be furnished in terms of the said Circular.

2. In order to further remind the Noticee about the compliance with the

requirements as laid down in the SEBI Circular dated June 03, 2011, letter
dated November 14, 2011 was sent to the Noticee informing about the

commencement of processing of investor complaints in a centralized web

based complaints redress system SCORES in terms of the Circular and

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Adjudication Order in respect of Hartron Communications Ltd.

March 16, 2015

advising the Noticee to send the information (i.e. details for

authentication) as required in the Circular, at the earliest.

3. As observed from the contents of the Circular, SCORES introduced

electronic dealing of the complaints of the investors, by the respective

companies. Thus, once a complaint against a company was uploaded by
SEBI in the SCORES, it amounted to calling upon by SEBI to such company

to redress the investor grievance. Accordingly, it was incumbent upon

such company to redress the investor complaint. It was observed that one

investor complaint was pending against the Noticee as on August 27,

2012. However, it was alleged that the Noticee failed to redress pending
investor grievance and also failed to obtain SCORES authentication in
spite of being called upon by SEBI to do so thereby violating the
provisions of Section 15C of the SEBI Act, 1992.

4. Shri Praveen Trivedi was appointed as the Adjudicating Officer to inquire

and adjudge under Section 15C of the SEBI Act, 1992, the alleged
violations committed by the Noticee. Pursuant to the transfer of Shri

Praveen Trivedi, the undersigned was appointed as Adjudicating Officer

vide Order dated December 18, 2013.

SHOW CAUSE NOTICE, HEARING & REPLY

5. Show Cause Notice (SCN) in terms of the provisions of Rule 4(1) of SEBI
(Procedure for Holding Inquiry and Imposing Penalties by Adjudicating

Officer) Rules, 1995 (Adjudication Rules) was issued to the Noticee on

July 31, 2013, calling upon the Noticee to show cause why an inquiry

should not be held against it under Rule 4(3) of the Adjudication Rules

read with Section 15I of the SEBI Act, 1992 for the alleged violations.

6. The aforesaid SCN was duly delivered to the Noticee through the
Department of Post. Vide letter dated September 07, 2013 the Noticee

submitted its reply to the SCN and inter alia made the following
submissions:

The company had received SEBI letter no NRO/SCORE/OW/34868-11/2011 dated

14/11/2011 in the month of December 2011. The company accordingly applied for
the login and password with your office vide speed post letter dated 3rd January
2012. The company received the login id and password by mail on dated 5th
January 2012. Since then the RTA of the company is regularly tracking and
resolving the complaints of the shareholders lodged with SEBI office. There is no
complaint pending against the company as on date.

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Adjudication Order in respect of Hartron Communications Ltd.

March 16, 2015

Regarding the complaint of Mr Birendra Nath Roy, as mentioned by your good self
in your show cause notice, the same was replied by the Registrar and Transfer
Agent of the company M/s Mas Services Limited, three times as per details below:
Complaint lodged on 27th November 2012, closed on 21st February 2013 by your
office.
Complaint lodged on 4th October 2012, closed on 17th October 2012 by your office.
Complaint lodged on 13th September 2012, closed on 20th September 2012 by your
office.
After satisfactory reply given by us, SEBI had closed the same three times.
We wish to clarify that the company has timely replied to all the letters received
from the investors and specially, no prejudice has been caused to Mr. Birendra
Nath Roy. Therefore your goodself is requested to withdraw/drop the Show Cause
Notice issued against the company.

7. Subsequent to the appointment of the undersigned, vide Notice dated

February 13, 2015 the Noticee was given an opportunity of personal

hearing on March 11, 2015. Vide letter dated February 23, 2015 the

Noticee made further submissions in which the Noticee mainly reiterated

its previous submissions. On the scheduled date of personal hearing, Mr.

Chanderjet Singh and Mr. Naveen Rastogi appeared as Authorised

Representatives (AR) of the Noticee and inter alia made the following
submissions:

As on date, no complaint is pending on SCORES. We have taken SCORES

authentication on January 05, 2012 and the complaint as mentioned in the SCN
was closed in SCORES database on September 20, 2012, i.e., before the issuance
of SCN dated July 31, 2013.

ISSUES FOR CONSIDERATION

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

A. Whether the Noticee has failed to resolve investor grievances?

B. Whether the Noticee is liable for monetary penalty under Section 15C
of the SEBI Act, 1992?

C. 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?

FINDINGS

9. 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 Noticee has failed to resolve investor

grievances?
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Adjudication Order in respect of Hartron Communications Ltd.

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10. As already observed, SEBI introduced an online electronic system for

resolution of investor grievances, i.e., SCORES in 2011. For the purposes

of accessing the complaints of the investors against them, as uploaded in

the SCORES, listed companies were required to login to SCORES system
electronically through a company specific user id and password, to be

provided by SEBI. Further, vide letter dated November 14, 2011 the
Noticee was informed about the commencement of SCORES and the

Noticee was advised to send the details for authentication as required in

the Circular. In this regard, the Noticee vide its letter dated September 07,

2013 and February 23, 2015 has submitted that it had made an

application for obtaining SCORES user id and password on January 03,

2012 and received SCORES authentication vide email dated January 05,
2012. Regarding the one pending investor complaint, as mentioned in the

SCN, the Noticee has stated that it had resolved the same on September

20, 2012. Subsequently, SEBI has also confirmed that the Noticee had

obtained SCORES authentication on January 05, 2012 and had resolved

the pending investor grievance (as mentioned in the SCN) on September
20, 2012.

11. Since, the Noticee had obtained SCORES authentication and had taken

necessary steps of resolving the pending investor grievance before the

issuance of SCN; I hold that the allegation of not resolving investor

grievances, as alleged in the SCN, does not stand established.

ISSUE 2: Whether the Noticee is liable for monetary penalty under

Section 15C of the SEBI Act, 1992?
12. The provisions of Section 15C of the SEBI Act, 1992, read as under:

15C Penalty for failure to redress investors' grievances: 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, 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.

13. Since the allegation against the Noticee of not resolving the investor
grievance pending against it has not been established; therefore, the

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Adjudication Order in respect of Hartron Communications Ltd.

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Noticee is not liable for monetary penalty under Section 15C of the SEBI

Act, 1992.

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?

14. Since, the Noticee is not liable for monetary penalty in the instant matter,
this issue deserves no consideration.
ORDER
15. In view of my findings noted in the preceding paragraphs, I hereby

dispose of the Adjudication Proceedings initiated against the Noticee vide

Show Cause Notice dated July 31, 2013.

16. 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 Noticee and also to Securities
and Exchange Board of India.

Date: March 16, 2015

Place: Mumbai

Jayanta Jash
Adjudicating Officer

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Adjudication Order in respect of Hartron Communications Ltd.

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