Ramanbhai Jethabhai Jadhav & Others vs SEBI
- Court
- Securities Appellate Tribunal
IN THE SECURITIES APPELLATE TRIBUNAL
AT MUMBAI
RD
DATED THIS THE 23 DAY OF JUNE, 2026
CORAM: Justice P.S. Dinesh Kumar, Presiding Officer
Ms. Meera Swarup, Technical Member
Dr. Dheeraj Bhatnagar, Technical Member
Appeal No.768 of 2021
[Along with Misc. Application No.1077
of 2023]
1. Ramanbhai Jethabhai Jadav
179, Vankar Vas, Vavol,
Gandhinagar-382016, Gujarat.
2. Yashwant Ramanbhai Jadav
179, Vankar Vas, Vavol,
Gandhinagar-382016, Gujarat.
3. Rajnikant Ramanbhai Jadav
179, Vankar Vas, Vavol,
Gandhinagar-382016, Gujarat.
…Appellants
(By Ms. Yugandhara Khanwilkar, Advocate i/b. Himanshu Gupta
and Associates for the Appellants . )
The Securities and Exchange Board of India
SEBI Bhavan, Plot No.C4-A,
“G” Block, Bandra Kurla Complex,
Mumbai – 400 051.
…Respondent
2
(By Mr. Pradeep Sancheti, Senior Advocate with Mr. Sumit Rai,
Ms. Nidhi Singh, Ms. Komal Shah and Mr. Nishin Shrikhande,
Advocates i/b. Vidhii Partners for the Respondent .)
With
Appeal No.769 of 2021
1. Vardhman Infracon Private Limited
22, New York Tower-B,
Near Thaltej Cross Roads,
S.G. Highway, Thaltej,
Ahmedabad-380054.
2. S.J. Infratech Private Limited
rd
312, 3 Floor, Pratik Mall,
Kudasan, Gandhinagar 382421,
Gujarat.
3. Passim Share Trade LLP
(Formerly Passim Share
Trade Private Limited)
18-216, Adarsh Nagar,
Vijaynagar Road, Naranpura,
Ahmedabad-380013, Gujarat.
4. Accurate Securities And Registry
Private Limited (Formerly Dexter
Share and Tradecom Private Limited)
203, Shangrila Arcade,
Above Samsung Showroom,
Shyamal Cross Roads, Satellite,
Ahmedabad – 380015, Gujarat.
5. Blink Share and Comtrade Private Limited
306, Sarthik Complex,
Nr. Iscon Cross Road,
Satellite Ahmedabad -380015,
Gujarat.
3
6. Eyesight Share Trading LLP
(Formerly Eyesight Share Trading
Private Limited
111/952, Nirmal Apartment,
Sola Road, Naranpura,
Ahmedabad – 380063, Gujarat.
…Appellants
(By Mr. Aditya Mehta, Advocate and Mr. Hitesh Buch, PCS i/b.
Hitesh Buch & Associates for the Appellants.)
The Securities and Exchange Board of India
SEBI Bhavan, Plot No.C-4A, “G” Block,
Bandra Kurla Complex, Bandra (E),
Mumbai – 400 051.
…Respondent
(By Mr. Sumit Rai, Advocate with Ms. Nidhi Singh, Ms. Komal
Shah and Mr. Nishin Shrikhande, Advocates i/b. Vidhii Partners
for the Respondent.)
With
Appeal No.770 of 2021
1. Sureshbhai Kantilal Thakkar
1744, Kankrej, Thara,
Cross Roads, Banaskantha-385555,
Gujarat.
2. Manubha Prabhatsang Vaghela
Meghani Pati 2, Vaghani Pati Pase,
PO Vada, Indramana, Kankrej,
Banaskantha -385555, Gujarat.
…Appellants
(By Mr. Rajesh Khandelwal, Advocate i/b. Aanal Satyawadi & Co.
for the Appellants.)
4
The Securities and Exchange Board of India
SEBI Bhavan, Plot No.C-4A, “G” Block,
Bandra Kurla Complex, Bandra (E),
Mumbai – 400 051.
…Respondent
(By Mr. Sumit Rai, Advocate with Ms. Nidhi Singh, Ms. Komal
Shah and Mr. Nishin Shrikhande, Advocates i/b. Vidhii Partners
for the Respondent.)
With
Appeal No.771 of 2021
1. Payal Jayeshbhai Madiyar
C-2, G-1, Sadguru Colony,
Near Nil Da Dhaba, Kalawad Road,
Rajkot Sau Uni Area, Rajkot-360005,
Gujarat.
2. Jayesh Vallabhaji Madiyar
1103, Building No.1, Regency
Estate, Kalyan Shill Road,
Near Venkatesh Petrol Pump,
Golvali, Dombivali East,
Kalyan, Thane-421201, Maharashtra.
3. Tusharbhai Hiralal Tanna
C-301, Saket Flats, Airport
Road, Near Vasundhara
Residency, Rajkot-360001,
Gujarat.
…Appellants
(By Mr. Umesh Ved, CS i/b. Umesh Ved & Associates for the
Appellants.)
The Securities and Exchange Board of India
SEBI Bhavan, Plot No.C-4A, “G” Block,
Bandra Kurla Complex,
Mumbai – 400 051.
…Respondent
5
(By Mr. Sumit Rai, Advocate with Ms. Nidhi Singh, Ms. Komal
Shah and Mr. Nishin Shrikhande, Advocates i/b. Vidhii Partners
for the Respondent.)
With
Appeal No.780 of 2021
Jagdishkumar Akhani Amrutlal
306, Sarthik Complex,
Nr. Fun Republic, Iscon Cross Road,
Satellite, Ahmedabad – 380015.
…Appellant
(By Mr. Anil Shah, Advocate with Ms. Mansi Mane, Advocate i/b.
Juris Matrix LLP for the Appellant.)
The Securities and Exchange Board of India
SEBI Bhavan, Plot No.C-4A, “G” Block,
Bandra Kurla Complex, Bandra (E),
Mumbai – 400 051.
…Respondent
(By Mr. Pradeep Sancheti, Senior Advocate with Mr. Sumit Rai,
Ms. Nidhi Singh, Ms. Komal Shah and Mr. Nishin Shrikhande,
Advocates i/b. Vidhii Partners for the Respondent.)
With
Appeal No.802 of 2021
[Along with Misc. Application No.1285
of 2021]
1. Arun Jwalaprasad Tulsian
444/19, Satyagrah Chhavni,
Bhavnirzar, Satellite,
Ahmedabad, Gujrat-380015.
2. Ashi Arun Tulsian
444/19, Satyagrah Chhavni,
Bhavnirzar, Satellite,
Ahmedabad, Gujrat-380015.
6
3. Ashi Texfab Pvt. Ltd.
42, 43, Hirabhai Market,
Diwan Ballubhai School,
Kankaria, B/h New Cloth Market,
Ahmedabad, Gujrat-380022.
4. Kartik Clothing and Fabrics Pvt. Ltd.
42, 43, Hirabhai Market,
Diwan Ballubhai School,
Kankaria, B/h New Cloth Market,
Ahmedabad, Gujrat-380022.
5. Sitadevi Tulsian
444/19, Satyagrah Chhavni,
Bhavnirzar, Satellite,
Ahmedabad, Gujrat-380015.
…Appellants
(By Mr. Ashim Sood, Senior Advocate with Mr. Kunal Katariya,
Ms. Ashmita Goradia, Mr. Sahebrao Wamanrao Buktare,
Advocates and Mr. Shardul Shah, CA i/b. Shah & Ramaiya for the
Appellants.)
Securities and Exchange Board of India
SEBI Bhavan, Plot No.C-4A,
Bandra Kurla Complex, Bandra (E),
Mumbai – 400 051.
…Respondent
(By Mr. Pradeep Sancheti, Senior Advocate with Mr. Sumit Rai,
Ms. Nidhi Singh, Ms. Komal Shah and Mr. Nishin Shrikhande,
Advocates i/b. Vidhii Partners for the Respondent.)
With
Appeal No.489 of 2022
Prabhaben Gordhandas Savjani
Block No.107 Silver Avenue,
Street No.6, B/H Parimal School,
Kalawad Road, Rajkot-360005, Gujarat.
…Appellant
7
(By Ms. Sandhya Malhotra, CS i/b. SRM & Co. Practicing
Company Secretaries for the Appellant.)
The Securities and Exchange Board of India
SEBI Bhavan, Plot No.C4-A, “G” Block,
Bandra-Kurla Complex, Bandra (E),
Mumbai – 400 051.
…Respondent
(By Mr. Sumit Rai, Advocate with Ms. Nidhi Singh, Ms. Komal
Shah and Mr. Nishin Shrikhande, Advocates i/b. Vidhii Partners
for the Respondent.)
THESE APPEALS ARE FILED UNDER SECTION 15T OF THE SEBI
ACT TO SET ASIDE THE ORDER DATED OCTOBER 1, 2021
PASSED BY THE WTM, SEBI.
THESE APPEALS HAVING BEEN HEARD AND RESERVED FOR
ORDERS ON FEBRUARY 18, 2026 COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE TRIBUNAL MADE
THE FOLLOWING:
ORDER
Per: Justice P. S. Dinesh Kumar, Presiding Officer
These seven appeals arise out of order dated 01.10.2021,
1 2
passed by the WTM , SEBI , ordering penalties, disgorgement
1
Whole Time Member
2
Securities and Exchange Board of India
8
and debarment. We have heard all seven appeals simultaneously
and disposing of by this common order.
Appeal
No.
Name of the Appellants Noticee in the
impugned order.
771/2021
Payal Jayeshbhai Madiyar,
N -1
N -3
N -4
769/2021
Jayesh Vallabhaji Madiyar,
Tanna Tusharbhai Hiralal,
Vardhman Infracon Pvt. Ltd.,
S J Infratech Pvt. Ltd.,
Passim Share Trade Pvt. Ltd.,
Dexter Share and
Tradecom Pvt. Ltd.(presently,
Accurate Securities and
Registry Pvt. Ltd.),
Blink Share and Comtrade
Pvt. Ltd.,
Eyesight Share Trading LLP
N – 6
N – 7
N – 11
N – 12
N – 13
N - 14
770/2021 Sureshbhai Kantilal Thakkar
N – 8
N – 9
768/2021
Manubha Prabhatsang Vaghela
Ramanbhai Jethabhai Jadav,
Yashwant Ramanbhai Jadav,
Rajnikant Ramanbhai Jadav
N – 15
N – 16
N – 17
780/2021 Jagdishkumar Amrutlal Akhani
N - 10
489/2022 Prabhaben Gordhandas
Savjani
N-18
Arun Jwalaprasad Tulsian,
N – 22
9
802/2021
Ashi Arun Tulsian,
Ashi Texfab Pvt. Ltd. ,
Karthik Clothing and Fabrics
Pvt. Ltd.,
Sitadevi Tulsian
N – 23
N – 24
N – 26
N – 30
2. We have heard Ms. Yugandhara Khanwilkar, learned
Advocate for the appellants in appeal No.768 of 2021. Mr. Aditya
Mehta, learned Advocate for the appellants in appeal No.769 of
2021. Mr. Rajesh Khandelwal, learned Advocate for the
appellants in appeal No.770 of 2021. Mr. Umesh Ved, Company
Secretary, for the appellants in appeal No.771 of 2021. Mr. Anil
Shah, learned Advocate for the appellants in appeal No.780 of
2021. Mr. Ashim Sood, learned Advocate for the appellants in
appeal No.802 of 2021. Ms. Sandhya Malhotra, Company
Secretary, for the appellant in appeal No.489 of 2022. Mr.
Pradeep Sancheti, learned Senior Advocate and Mr. Sumit Rai for
the SEBI.
3. Brief facts of the case are, Ahmedabad Gases Limited was
a listed Company. Two other companies namely, Excel Castronics
Limited and Indus Coils & Plates Limited („ICPL‟ for short)
merged with Ahmedabad Gases. Subsequently, the name was
changed from Ahmedabad Gases Limited to Excel Castronics
Limited („ECL‟ for short).
10
3
4. SEBI conducted an investigation into the scrip of ECL to
4
ascertain if there was any violation of the SEBI Act, 1992 and
5
SEBI (PFUTP) Regulations, 2003 . After investigation, a show
6
cause notice („SCN‟ for short) was issued to 32 noticees alleging
inter alia that:
7 8
The price of ECL scrip opened at ₹9.60 at BSE on
12.04.2013 and rose to ₹490 on 11.08.2014 and closed at
₹162.30, during the investigation period;
ECL Group entities had purchased 60.38% of gross buy side
volume and sold 35.51% of gross sell volume;
The following are shown as ECL Group entities:
Noticee
No.
Name of the
Noticee
Appellant No. &
Appeal No.
1 Payal Jayeshbhai
Madiyar
Appellant No.1 in
Appeal No.771 of 2021
2 Amit Ashokbhai
Pala
No appeal
3 Jayesh
Vallabhaji Madiyar
Appellant No.2 in
Appeal No.771 of 2021
4 Tanna Tusharbhai
Hiralal
Appellant No.3 in
Appeal No.771 of 2021
5 Sampati Broking
Private Limited
No appeal
6 Vardhman Infracon
Private Limited
Appellant No.1 in
Appeal No.769 of 2021
7 S J Infratech Appellant No.2 in
3
Between 12.04.2013 and 19.11.2014
4
Securities and Exchange Board of India Act, 1992
5
Securities and Exchange Board of India (Prohibition of fraudulent and
Unfair Trade Practices Relating to Securities Market), 2003
6
Dated 31.07.2020
7
Excel Castronics Limited
8
Bombay Stock Exchange
11
Private Limited Appeal No.769 of 2021
8 Sureshbhai Kantilal
Thakkar
Appellant No.1 in
Appeal No.770 of 2021
9 Manubha
Prabhatsang Vaghela
Appellant No.2 in
Appeal No.770 of 2021
10 Jagdishkumar Amrutlal
Akhani
Appellant in
Appeal No.780 of 2021
11 Passim Share Trade
Private Limited
Appellant No.3 in
Appeal No.769 of 2021
12 Dexter Share and
Tradecom Private
Limited (presently,
Accurate Securities
Registry Pvt. Ltd.)
Appellant No.4 in
Appeal No.769 of 2021
13 Blink Share and
Comtrade Private
Limited
Appellant No.5 in
Appeal No.769 of 2021
14 Eyesight Share
Trading Private Limited
Appellant No.6 in
Appeal No.769 of 2021
15 Ramanbhai Jethabhai
Jadav
Appellant No.1 in
Appeal No.768 of 2021
16 Yashwant
Ramanbhai Jadav
Appellant No.2 in
Appeal No.768 of 2021
17 Rajnikant
Ramanbhai Jadav
Appellant No.3 in
Appeal No.768 of 2021
18 Prabhaben Gordhandas
Savjani
Appellant in
Appeal No.489 of 2022
19 Meeta Tusharbhai
Tanna
No appeal
20 Sunil Jayantilal Bhatt No appeal
21 Jadeja Virbhadrasinh No appeal
During the investigation period, 19 noticees of ECL Group had
purchased ECL shares and contributed to increase in the last
traded price (LTP). Out of 4179 trades, in 284 trades buy
order was placed before the sell order which increased the
last traded price;
12
In 2708 trades, the counter parties belonged to ECL Group;
ECL connected entities had traded among themselves either
as buyer or seller, during the Investigation period;
Nine connected entities of ECL Group had contributed to new
high price (NHP);
Pursuant to amalgamation, shares were allotted. Ten
amalgamation allottees connected to ECL Group sold majority
of shares at higher prices, but they did not buy any shares
during the investigation period.
5. In substance, SEBI‟s case is, Excel Castronics Limited
(formerly Ahmedabad Gases Limited) was an illiquid scrip. After
amalgamation, 75,00,000 equity shares of ₹10/- each were
allotted to 99 shareholders of erstwhile ECL and ICPL. ECL Group
entities traded among themselves and increased the share price.
Jagdishkumar Akhani („Akhani‟ for short) is a common entity. He
was an amalgamation allottee and also a group entity of ECL.
Ten „amalgamation allottees‟ including Akhani sold majority of
their shares to ECL Group entities during the investigation period
at higher prices and made wrongful gains. Thus, 21 connected
entities and 10 amalgamation allottees are alleged to have acted
in concert, manipulated the scrip price and assisted the
„amalgamation allottees‟ to sell their shares at a higher price. In
the process, uninformed genuine investors in the securities
market were misrepresented and suffered losses.
6. Learned Advocates appearing for the appellants made
following common submissions:
13
i. That reckoned from the date of trade, there is a delay of six
years in issuing the show cause notice. They placed reliance on
9
Ashok Shivlal Rupani & Anr. v. SEBI and Bharat J Patel & Ors v.
10
SEBI ;
ii. The allegation of LTP contribution in Table 10 in the
impugned order is for the period between 12.4.2013 and
11.8.2014. The investigation period is between 12.4.2013 and
19.11.2014. Prices were at their highest point of ₹490/- on
11.08.2014 and then crashed to ₹162 by 19.11.2014. Therefore,
appellants‟ trades between 11.8.2014 and 19.11.2014 had a
negative LTP contribution. Table 12 shows that appellants are not
11
involved in NHP contribution;
iii. That there was no intention to match any of the trades. The
impugned order records that there is a time gap of about 9
minutes to over 6.28 hours between the „buy‟ and „sell‟ orders.
It is not relevant because, appellants have traded in normal
course;
iv. Subsequent to listing of fresh shares, trading commenced
at ₹143/- on 19.08.2013. The increase in price from ₹9.60 on
12.4.2013 to ₹143/- on 19.8.2013 was due to major corporate
action and it cannot be considered as unprecedented rise in the
share price;
9
Appeal No.417 of 2018 decided on 22.08.2019 by the Securities Appellate
Tribunal, Mumbai
10
Appeal No.154 of 2020 decided on 08.09.2020 by the Securities
Appellate Tribunal, Mumbai
11
New High Price
14
v. The drop in the share price after investigation period was
due to stock split from ₹10 to ₹2 with effect from 20.11.2014.
Therefore, after the split, the price of ₹32.75 was actually
₹163.75. Post investigation, the high price of ₹43.70 on
5.12.2015, corrected for the split amounted to ₹218.50.
7. In addition to the above common submissions, Ms.
Yugandhara Khanwilkar, learned Advocate for the appellants in
appeal No.768 of 2021 submitted that:
i. SEBI has failed to acknowledge that Rajnikant Ramanbhai
Jadav (appellant No.3, „Rajnikant‟ for short) was an Independent
Director of ECL from 22.06.2011 to 21.11.2011, whereas
12
Akhani , was an Independent Director of ECL during 22.04.2010
to 11.06.2011 and Pravinbhai Lakhiram Joshi has joined the ECL
as an Independent Director from 21.11.2011 to 30.05.2013.
Therefore, none of these persons were Directors of the Company
at the same time and Independent Directors have no role in the
affairs of the Company. The impugned order refers to a period
which is prior to the investigation period;
ii. SEBI has erroneously connected appellant-Jadav‟s business
with Kartik Clothing and Fabrics Pvt. Ltd. (Noticee No.26) with
13
the entire Tulsian group, even though there was no fund
transaction with any other noticee. They are cloth merchants.
Jadav‟s family is in cloth business. They had sold cloth to Karthik
12
Jagdishkumar Amrutlal Akhani- Noticee No.10
13
Appellants in Appeal No.802 of 2021
15
14
Clothing (Noticee No.26 ) for valid consideration in the normal
course of business. They have also paid brokerage/ commission
to one Tarun Shah. Appellants furnished copies of their Income
Tax returns to WTM to support their contention;
iii. Appellants have not contributed to positive LTP and NHP.
Majority of them traded at zero LTP or negative LTP, which belies
the allegation of intentional manipulation of prices upward. Table
10 in the impugned order shows that the net effect of all trades
by Ramanbhai on the positive LTP was ₹8.2, whereas trades of
Yeshwant and Rajnikant resulted in negative LTP of ₹12.60 and
₹0.15 respectively which cannot be considered as abnormal;
iv. Appellants‟ trades were executed through their brokers,
who had placed orders in the trading terminals. All trades occur
through online stock exchange mechanism, where it is
impossible to identify the counter party to match the trades.
8. In addition to the common submissions, Mr. Anil Shah,
learned Advocate for the appellant (Akhani) in appeal No.780 of
2021 submitted that:
i. Appellant‟s trades have not contributed to positive LTP and
NHP. Table 10 in the impugned order records net effect of
appellants‟ trades as negative LTP of ₹10.80. Majority of the
appellants‟ trades were at zero LTP, which belies the allegation of
intentional manipulation;
14
Karthik Clothing and Fabrics Private Limited - Appellant in Appeal No.
802 of 2021
16
ii. Table 10 of the impugned order shows that appellants‟
total trade during 12.4.2013 to 11.8.2014 was 88,730, whereas
table at page 75 of the impugned order shows that appellant‟s
total „buy‟ and „sell‟ trades during the investigation period was
4,19,915 shares. Thus, SEBI has considered the effect of only a
portion of his trade and recorded adverse finding and the same
is untenable in law;
iii. The impugned order records that there was NHP
contribution in only 3 out of 214 trades, which cannot be held as
manipulative;
iv. Appellant sold his shares for an average sale price of ₹248
per share and even after the investigation period, appellant was
still holding 3,40,827 shares. If the appellant was a party to the
price manipulation, he would have sold all his shares when price
was at its peak i.e.₹490;
v. Appellant‟s trades were executed through their brokers and
this appellant has not placed orders by himself. Therefore, the
allegation of manipulation is not tenable;
vi. The WTM has recorded that appellant is connected to ECL
Group. Appellant knows only Noticee Nos.6 to 17, being his
friends. He is not connected with other entities of ECL Group;
vii. Appellant is a regular trader. He was trading both before
and after the investigation period. He was a shareholder prior to
amalgamation since 2012 and amalgamation of 3 companies
17
resulted in total change in company‟s profile and management.
There was also capital reduction and consolidation, by which
80% of the pre-amalgamation capital was wiped out and the net
worth effectively got compressed into the balance 20% shares.
Further, new shares were issued to the shareholders of the 2
companies which got amalgamated into AGL and the shares got
listed on BSE;
viii. Appellant was an „amalgamation allottee‟ of 50,000
shares. He has not made any „wrongful gain‟. After investigation
period, he was holding 3,40,827 shares. Therefore, it cannot be
assumed that the shares sold by the appellant during the
investigation period included the shares allotted on
15
amalgamation. The disgorgement computation is erroneous
because SEBI has assumed that the entire sale price (less
assumed acquisition cost of ₹10/- per share) as „unlawful gain‟.
16
Even the undisputed SPOS discovered price was ₹143/- per
share and the post investigation period, the undisputed high
price adjusted for the split was ₹218.50 per share. There is no
material on record to quantify the amount of disproportionate
gains made by the appellant. Therefore, the direction for
disgorgement is unsustainable.
9. Ms. Sandhya Malhotra, Company Secretary, for the
appellant in appeal No.489 of 2022 reiterated the submissions
made by the learned Advocates for appellants in other appeals.
15
at Table 18 of the impugned order
16
Special Pre-Open Session
18
In addition, she submitted that the appellant is not connected
17
with Madiyar Group or other noticees. She was not employed
under Jayesh Madiyar. SEBI, in para 21 of the impugned order,
has recorded that appellant has admitted her connection with
other noticees. But, the appellant in her reply to the SCN dated
01.01.2021, has denied any connection with any group.
Appellant is an old lady. She is not aware about any transactions
other than purchase of 1000 shares of ECL in the off-market
trade which may account for 0.01% to total market volume.
Therefore, the allegation of manipulation is baseless.
10. In addition to the common submissions, Mr. Rajesh
Khandelwal, learned Advocate for the appellants in appeal
No.770 of 2021 submitted that:
i. Appellants knew Noticee Nos.6 to 17. They are in no
position to influence the investment decisions of other noticees;
ii. Appellant Nos.1 and 2 bought 3,54,747 shares, 3,59,796
shares and sold only 38,981 and 45,275 shares respectively
during the investigation period. After investigation period, they
were holding 3,15,764 and 3,14,521 shares respectively, which
shows that they were not part of any group;
iii. Appellants have carried out 2798 and 2253 trades. SEBI
has considered only 11 and 7 trades of the appellants which
works out to 0.5 and 0.4% of the trades. Hence, the allegation
of NHP contribution is untenable;
17
Noticee Nos.1,3 and 4
19
iv. Appellant No.1, Sureshbhai Thakkar was appointed as
Director of ICPL on 01.01.2012 and ceased to be the Director
from the date of amalgamation. Appellant No.2, Manubha
Vaghela was appointed as Non-Executive Director on
05.03.2012 of ICPL and ceased to be the Director from the date
of amalgamation. Appellant No.1 was a director of Blink Share
and Comtrade Private Limited (Noticee No.13) for only 29 days.
Hence, he cannot be considered as a connected entity;
v. SEBI has alleged appellants‟ connection with Madiyar Group
(Noticee Nos.1 to 5 & 18 to 21) without any evidence. Hence,
the allegation is untenable;
vi. All trades were executed through the online mechanism on
the stock exchange platforms by the brokers and therefore, it is
impossible for the appellants to know the counter parties.
Further, majority of their trades were at „0‟ LTP.
11. Mr. Ashim Sood, learned Advocate for the appellants in
Appeal No.802 of 2021 submitted that:
i. The SCN does not allege that the appellants had participated
in the manipulation of share price and that they offloaded
majority of shares upon unsuspecting and unconnected investors
in the market. The SCN does not contain any allegation of
participation by the amalgamation allottees in the alleged
manipulation by the ECL Group. The amalgamation allottees had
no knowledge of any scheme. In the absence of cogent evidence,
20
it is untenable to attribute any wrong doing on the part of the
appellants. In support of this submission, he relied upon Praveen
18
Kurele & Anr. v. SEBI ;
ii. The SCN does not allege that the fund transfers were made
for the purpose of carrying out the scheme and purchase of
shares was for sharing unlawful gains. Except fund transfers,
there is no other evidence such as telephone call records,
WhatsApp or text messages etc. to suggest connection between
the appellants and the ECL Group to carry out the scheme;
iii. The impugned order has held that the connection between
the appellants and ECL Group was established based on the
transactions between the appellants and Noticee Nos.15 to 17
and Sampati Currency Trade Link, a client of Noticee No.5.
However, the impugned order does not allege that the
transactions had anything to do with the manipulation of stocks;
iv. SEBI has failed to establish that the appellants were in touch
with the ECL Group entities during the investigation period and
fund transfers were made as quid pro quo. In the absence of
establishing concert, communication or quid pro quo , no
presumption of participation in a fraudulent scheme can legally
arise. In support of this submission, he placed reliance on
19
Balaram Garg v. SEBI ;
18
Appeal No.319 of 2020, decided on 29.04.2022 by the Securities
Appellate Tribunal, Mumbai
19
(2022) 9 SCC 425
21
v. The allegation that the ECL Group inflated the price of the
shares to provide exit to the amalgamation allottees including
the appellants is highly improbable. To believe that such a
scheme existed, one would have to accept that the entire
purpose of manipulation was to benefit only six entities;
vi. It is incorrect to suggest that the ECL Group manipulated
the market to increase the share price and purchased appellants‟
shares at a much higher price themselves, causing significant
loss to themselves. He submitted that if the only objective of the
ECL Group was to purchase the shares from the appellants at a
higher price, they could have done so without any market
manipulation;
vii. During June 2014, Sampati Currency Trade Link had
organised a workshop on Forex Trading, which was attended by
appellant No.1. It was on the basis of the advertisement
published by Sampati Currency Trade Link that the appellants
transferred funds for investments. The appellants agreed to open
two accounts, one in the name of appellant No.3 and the other in
the name of appellant No.4. The appellant Nos. 3 and 4 made
payment of ₹38,92,541/- for currency 30,000 GBP and 12,500
USD and ₹9,10,617 for currency 15,000 USD respectively
.
Thereafter, Sampati Currency Trade Link expressed inability to
open accounts in the name companies and accounts could only
be opened in the name of individuals. Appellants requested for
refund, but Sampati Currency conveted that it was not possible
to return money and requested to keep it as deposits repayable
22
with 15% interest per annum. Appellants had to approach police
to get their money back;
viii. The appellants have adduced evidence to show that the
transactions were bona fide . So far as transactions between
appellant Nos.4 & 5 and Sampati Currency Trade Link are
concerned, Sampati was not made as a party to the SCN and
there are no allegations against Sampati. The transaction with
Sampati was for the purpose of exchange of currency and nothing
to do with trading. He placed reliance on Manish S. Joshi v.
20
SEBI ;
ix. Appellants had placed the correspondence exchanged
between them and Sampati Currency Trade Link before the SEBI,
but SEBI has rejected the same holding them as fabricated. Even
during oral arguments, these documents remained largely
uncontroverted and SEBI has failed to demonstrate why these
documents are unreliable;
x. The police complaint filed against Sampati and the police
report are filed along with this appeal. The police complaint is
dated prior to BSE‟s Report, which demonstrates that the
appellants had legitimate transactions with Sampati;
xi. The transactions between appellant No.4 and Noticee
Nos.15 to 17 were bona fide cloth purchase transactions.
Appellants have produced invoices and audited balance sheets
20
Appeal No.2 of 2020, decided on 13.01.2020 by the Securities Appellate
Tribunal, Mumbai
23
and SEBI has rejected the same on the ground that GST, VAT or
tax receipts were not produced. SEBI failed to consider that the
GST regime was not there at that time and during the VAT
regime, there was no tax on cloth and hence, audited balance
sheets cannot be disregarded on this ground;
xii. Without prejudice to the above submissions, the
disgorgement is incorrectly calculated by subtracting the face
value of ₹10 from the sale price of shares. SEBI has admitted
that the shares after amalgamation were listed for the first time
at an opening price of ₹143/-. Therefore, the minimum sale price
ought to have been construed at ₹143/-.
12. Mr. Umesh Ved, Company Secretary for the appellants in
appeal No.771 of 2021 reiterated the submissions made by the
learned Advocates for appellants in other appeals. In addition,
he submitted that the appellant is not connected with noticee
Nos.6 to 17 and noticee Nos.22-31. SEBI has erred in holding
that all noticees were connected with each other merely on the
premise that Sampati Currency Tradelink had entered into
currency derivative business with Noticee 24 & 26 and Noticee
26 had entered into some cloth trading business with Noticee
Nos.15-17 and that Noticee Nos.15-17 had some common
contact number and details with other Noticees.
13. Mr. Aditya Mehta, learned Advocate for the appellants, in
appeal No.769 of 2021, reiterated the submissions made by the
learned Advocates in other appeals.
24
14. Mr. Pradeep Sancheti, learned Senior Advocate and Mr.
Sumit Rai, learned Advocate appearing on behalf of the SEBI
submitted that:
i. Appellants‟ argument of delay is not tenable. The lapse of
time cannot be said to be detrimental because this case involves
multiple layers of transactions and connections which required
comprehensive examination, which consumed time. In support
of this submission, reliance is placed on Adjudicating Officer,
21
SEBI v. Bhavesh Pabari ;
In appeal No.768 of 2021:
ii. The role and involvement of the appellants is required to
be examined as a group in order to understand the manipulative
scheme devised by them. Appellants‟ contention that they have
zero or negative LTP is untenable. In support of this submission,
22
he placed reliance on Hemant Sheth v. SEBI ;
iii. The appellants have admitted fund transaction. They have
deliberately filed the invoices belatedly which cannot be
scrutinized and they were neither produced before the WTM nor
annexed to the appeal memo. The invoices cannot be considered
at this stage;
iv. Appellants‟ (Ramanbhai and Yashwant Jadhav) contention
that their mobile number and the mobile number of Passim
21
(2019) SCC Online SC 294
22
Appeal No.205 of 2019, decided on 04.03.2020 by the Securities
Appellate Tribunal, Mumbai
25
share trade Pvt Ltd. (Noticee No.11) were common due to old
KYC records, is not tenable. Their contention that SEBI had not
asked for more documents is also not tenable because it is for
the noticees to produce necessary evidence to defend their
cause. The fund transactions establish connection between the
parties. In support of this submission, he placed reliance on
23
Sanjay Kumar Poddar HUF v. SEBI ;
In Appeal No.802 of 2021:
v. Sampati Currency Trade Link is a client of Sampati Broking
Private Limited (Noticee No.5). Madiyar group has admitted that
Sampati Currency Trade Link is their group entity. Therefore, the
connection between the appellants and Madiyar group on
account of the fund transfer cannot be denied. These
connections show collusion between the parties;
vi. Tulsian Group had financial transactions with both Madiyar
Group and the second part of ECL Group (Noticee Nos.6 to 17).
It cannot be a mere coincidence that appellants invest in
Sampati Currency Trade Link and its connected entity becomes
the counter party in the scrip traded by them because it is not
possible to find out the counter party on the exchange platform
unless parties agree in advance to trade at a particular time and
23
Appeal No.326 of 2020, decided on 24.08.2021 by the Securities
Appellate Tribunal, Mumbai
26
price. In support of this submission, he placed reliance on
24
Subash Gangaprasad Gupta v. SEBI ;
In Appeal No.780 of 2021:
vii. The Special pre-open session (SPOS) price is for discovery
of price. Jagdishkumar Akhani, Manubha Vaghela and
Sureshbhai Thakkar traded during the SPOS sessions and
artificially boosted the price of the scrip to ₹143/-. For the
calculation of disgorgement, entire investigation period has to be
taken into account. Jagdishkumar Akhani and Manubha Vaghela
share common mobile number and email id;
viii. As many as 84 amalgamation allottees were examined,
after investigation only 10 amalgamation allottees were found to
be connected to the ECL group. Hence, the SCN was issued to 10
amalgamation noticees. Jagdishkumar Akhani is also involved in
manipulation. He appears to be the centre of the whole scheme
as he has connection with various entities;
In Appeal No.489 of 2021:
ix. Appellant (Prabhaben Gordhandas Savjani) did not produce
any material in support of her contention that the trades were
carried in her account without her permission. She also did not
deny the transactions in her trading account. In para 5(b) of the
appeal memo, appellant has admitted that she had traded in the
24
Appeal No.560 of 2020, decided on 21.06.2021 by the Securities
Appellate Tribunal, Mumbai
27
ECL scrip during the investigation period. Jayesh Madiyar
(noticee No.3) has admitted that the appellant was employed in
a firm owned by Madiyar family;
x. Name lending is a serious offence and amounts to „fraud‟
under PFUTP Regulations. Appellant has failed to show how
Jayesh Madiyar got access to her trading account and what
action she took against him. In support of this submission, he
25
placed reliance on Mahavirsingh N. Chauhan v. SEBI ;
xi. Appellant had also received off-market shares from Payal
Madiyar (Noticee No.1) which establishes that they were
connected entities. In support of this submission, he placed
26
reliance on Praveen Kurele & Anr. v. SEBI .
15. We have carefully considered the rival contentions and
perused the records.
16. Undisputed facts of the case are, two companies (ECL and
ICPL) merged into Ahmedabad Gases. After merger, the
company was renamed as „ECL‟.
17. As per the scheme of amalgamation, there was reduction
in the capital of erstwhile ECL by 80% i.e. capital of ECL was
reduced from ₹3,21,35,000 to ₹64,27,000.
25
Appeal No.393 of 2018, decided on 18.10.2019 by the Securities
Appellate Tribunal, Mumbai
26
Appeal No. 319 of 2020, decided on 29.04.2022 by the Securities
Appellate Tribunal, Mumbai
28
18. After amalgamation, 75 Lakhs equity shares were allotted
to 99 shareholders (31 Lakhs shares to erstwhile shareholders of
ECL and 44 Lakhs shares to erstwhile shareholders of ICPL),
hereinafter referred to as „amalgamation allottees‟.
19. After investigation, SEBI issued an SCN to 32 noticees.
After adjudication, penalties and debarment have been ordered
against 26 noticees and 6 have been exonerated. Out of the 26,
disgorgement has been ordered against 6 noticees. In this batch,
there are 7 appeals by 21 out of 26 noticees.
20. For the sake of convenience, noticees are divided into
groups.
First group (ECL Group) i.e. who are alleged to have traded
among themselves in the ECL scrip;
Second group (Tulsian Group) i.e. shareholders of
erstwhile ECL and ICPL, who were allotted shares of ECL
after amalgamation and they sold during the investigation
period; and
The third, an individual, Jagdish Akhani, who falls into both
ECL Group and amalgamation allottees‟ group.
27
21. SEBI‟s main allegation is, 21 connected entities of ECL
Group manipulated the price and assisted in sale of shares by 10
amalgamation allottees at a higher price to enable them to make
unlawful gains.
27
Para 23 of SCN 31.07.2020; para 5.12 of impugned order.
29
22. Admitted position is, Rajnikant Jadav and Jagdish Akhani
were Directors of Ahmedabad Gases. Sureshbhai Thakkar and
Manubha Vaghela were Directors of ICPL. Jayesh Madiyar was
Director of ECL.
23. Next admitted position is, 75 Lakh shares were allotted to
99 shareholders.
24. Appellants in Appeal Nos.768 769, 770, 771 and 780 of
2021 and 489 of 2022 have traded in the ECL during the
investigation period. SEBI has alleged that they are connected.
We have analysed their connections. They are as follows:
Sr.No. Appeal No. Name of the
Appellants
Noticee in
the
impugned
order.
Connection
1
768/2021
i. Ramanbhai
N – 15
N – 16
N – 17
1. Yeswanth and
Jethabhai Jadav,
ii. Yashwant
Rajnikant are sons of
Ramanbhai. It is admitted
Ramanbhai
Jadav,
iii. Rajnikant
by Ramanbhai that they
have common phone
number, address and
Ramanbhai
Jadav
email id.
2. Rajnikant was Director
of Ahmedabad Gases.
i. Vardhman
N – 6
1. Noticee Nos.6,7,11 and
Infracon Pvt.
Ltd.,
13 are relate based on
common mobile number.
30
2
769/2021
ii. S J Infratech
N – 7
N – 11
N – 12
N – 13
N - 14
2. Noticee Nos.10,11 and
Pvt. Ltd.,
iii. Passim Share
12 have common
address.
Trade Pvt. Ltd.,
iv. Dexter Share
3. Noticee Nos.9,6,10,13,
16 and 17 are related
and Tradecom
Pvt.
Ltd.(presently,
Accurate
Securities and
Registry Pvt.
Ltd.),
v. Blink Share and
based on common mobile
number.
3. NoticeeNo.14 is having
common address with
Noticee 13.
4. Noticee Nos.6, 13 and
Comtrade Pvt.
Ltd.,
vi. Eyesight Share
14 have common director.
Trading LLP
3
770/2021
i. Sureshbhai
N – 8
N – 9
Both are Directors in
Kantilal Thakkar
ii. Manubha
ICPL.
Prabhatsang
Vaghela
4
771/2021
i. Payal
Jayeshbhai
Madiyar,
ii. Jayesh
Vallabhaji
Madiyar,
iii. Tanna
N-1
N-3
N-4
1. Jayesh Madiyar is was
Director in ECL.
2. Payal is his wife.
3.Tanna was their
employee.
Tusharbhai
Hiralal
5 489/2022 i. Prabhaben
Gorhdandas
Sabjani
N-18
1. Jayesh has admitted
that Prabhaben was his
31
employee, however,
Prabhaben has denied
that she was an employee
under him.
2. Trade Log shows that
purchase was made in
Prabhaben‟s name by
Jayesh.
6
780/2021
i. Jagdishkumar
Amrutlal
Akhani
N - 10
1. He was Director in
Ahmedabad Gases and S
J Infra.
2. He shared common
common mobile number
with 6,7,8, 9, 13, 16
band 17.
3. Noticee 6,7,10,15,16
and 17 are related based
on common email id
[email protected].
25. The above connections are not in dispute.
28
26. The above mentioned noticees have admittedly traded
during the investigation period. It is also not in dispute that ECL
scrip was an illiquid scrip. It was initially quoted at ₹9.60 at BSE on
12.04.2013 and rose to ₹490 on 11.08.2014 and closed at
28
1,3,4,6 to 18
32
₹162.30, during the investigation period. Noticee Nos.1,3,4,6 to 18
are connected entities and interested parties. Their involvement in
the trade and increase of the share price of the ECL‟s illiquid scrip
are not in dispute. By preponderance of probability, it is reasonable
to infer that they have joined hands to make the scrip liquid and to
increase its share price.
Consideration of Appeal No.489 of 2022, Prabhaben Savjani
v. SEBI:
27. It was argued on behalf of the appellant that she was more
than 80 years old. Madiyar has accepted that she was her
employee. She has taken a stand in this appeal that trading was
done by her through a broker. WTM has recorded in para 34 of the
impugned order that the trade logs disclose that Prabhben‟s trades
were placed from the username „Jayesh Madiyar‟ and Prabhben has
admitted that trades were placed by promoter/broker/sub-broker
of the Company. She has purchased only 1000 shares and she has
not sold any. The WTM has imposed a penalty of ₹10 Lakhs on her.
Keeping in view the fact that she is more than 80 years old and the
quantum of shares purchased being only 1000 which were not sold
as against total traded volume more than 97 Lakh shares, we are
of the opinion that she had no role in increasing the share price
and hence, imposition of penalty on Prabhaben is not sustainable.
Consideration of Appeal No.780 of 2021, Jagdishkumar
Akhani v. SEBI:
28. Jagdish Akhani is both in the ECL Group and amalgamation
allotees. Admittedly, he has traded in the scrip. His defence is that
33
he is a regular trader and he had retained 3,40,827 shares even
after expiry of investigation period. Thus, it was contended that he
is not involved in the manipulation and therefore, penalty and
disgorgement direction are not sustainable.
29. The connection table extracted hereinabove, clearly shows
that he was connected with Noticee Nos.6,7,8,9,11 and 12 based
on common mobile number, 11 and 12 based on common address.
He was a Director of Ahmedabad Gases, which was amalgamated
into the new ECL.
30. After amalgamation, total shares allotted was 75 Lakhs.
Impugned order discloses that the total buy volume was 97,34,407
shares. Out of them, 58,77,430 shares have been purchased by the
ECL Group entities who are alleged to have manipulated. Out of
58,77,430 Lakh shares, Akhani has purchased 1,00,148 shares.
31. So far as the quantum of disgorgement is concerned, Akhani
was allotted 50,000 shares. The ECL scrip was illiquid. He has
realised ₹1,22,97,800/- by selling 50,000 shares. The WTM has
deducted the cost of acquisition of ₹5 Lakhs. It was argued in the
alternative on his behalf that SEBI ought to have considered
Special Pre-Open Session Price of ₹143, while calculating the
disgorgement amount and this submission was refuted by SEBI‟s
Senior Advocate contending that SPOS is for discovery of price;
and Akhani, Manubha Vaghela and Suresh Thakker have traded
during SPOS session and artificially boosted the scrip price. The
trade log, Exhibit - D filed along with the written submission shows
that Akhani had traded with Manubha Vaghela. Thus, there are
34
trades between connected entities. Though, Akhani has sold
3,19,767 shares, SEBI has directed disgorgement of unlawful gain
made from out of 50,000 shares only, which were allotted to him,
after Ahmedabad Gases was amalgamated into ECL. Hence, we
are persuaded to accept SEBI‟s contention that the benefit of SPOS
cannot be made available to Akhani and no interference is called
for with regard to quantum of disgorgement.
32. The WTM has imposed a penalty of ₹15 Lakhs under Section
15HA of the SEBI Act. One of the parameters of Section 15J of the
SEBI Act mandates that the unlawful gains, if any, made will have
to be taken into consideration, while imposing penalty. While
sustaining the disgorgement, we have noted that Akhani has
indulged in manipulative trade. In view of this finding, no
interference is called for with regard to penalty also.
Consideration of Appeal No.802 of 2021, Arun Jwalaprasad
Tulsian and Ors. v. SEBI:
33. It is not in dispute that the Tulsian Group Member (five
29
amalgamation allottees ) are the erstwhile shareholders and they
received ECL shares after amalgamation. There were in all 99
„allottees‟ of ECL shares. Out of them, 84 have sold their shares.
SEBI, after investigation has found that 10 out of the 84 had
connection with the ECL Group. After adjudication, four allottees
have been exonerated.
29
Appellants in Appeal No.802 of 2021
35
34. SEBI‟s theory is that only 10 out of 84 allottees were
allegedly connected with the ECL Group. Among them, 4 have
been exonerated. This means ECL Group undertook the entire
exercise only for the sake of 6 allottees. This is also highly
improbable.
35. Tulsian Group consists of 5 allottees/appellants. Sitadevi
Tulsian is wife of Arun Tulsian. Ashi is their daughter. The two
companies, Ashi Texfab and Kartik Clothing belong to them. It is
alleged against them that they had fund transactions with
Ramanbhai Jadav. Tulsian Group has taken a defence that it had
paid money to Ramanbhai Jadav to purchase cloth from his firm.
To support this contention, they have furnished some invoices.
SEBI has rejected their contention. In our view, SEBI‟s strenuous
endeavour to establish a link between Tulsian Group and
Ramanbhai is futile firstly, because shares were held by Tulsian
Group and ECL Group is alleged to have purchased the shares.
Therefore, payment of money by Tulsian Group to Ramanbhai
Jadav is inconsequential and does not lend any support to SEBI‟s
allegation. Secondly, even if SEBI‟s argument that Tulsian Group
was connected with Ramanbhai is accepted, it does not hold any
water because the main allegation of manipulating the share
price is against ECL Group and Tulsian Group is a beneficiary.
Therefore, its connection with Ramanbhai is of no avail.
36. Next, Ashi Texfab and Kartik Clothing of Tulsian Group are
alleged to have had connection with Sampati Currency. It is
alleged that Sampati Currency is also a client of Sampati Broking
36
private Limited, which belongs to Jayesh Madiyar (ECL Group). It
was argued that this connection established transaction between
ECL and Tulsian Groups. This argument is too fallacious because
shares were owned and held by Tulsian Group. In one breath, it
is alleged that Tulsian Group had paid money to Jayesh Madiyar
belonging to ECL Group. In the other breath, it is argued that in
order to facilitate the allottees (which included Tulsian Group),
ECL Group had indulged in manipulative trades. Hence, the flow
of money ought to have been towards Tulsian Group and not the
other way. Thus, the entire theory propounded by the SEBI
against the Tulsian Group is too fragile to be countenanced and
hence fails. In addition, it is relevant to note that according to
the SEBI, ECL Group manipulated the share price to benefit the
amalgamation allottees who are 99 in number. Out of them, 84
have sold. As per SEBI, out of 84, 5 in Tulsian Group and Akhani
have joined hands with ECL to manipulate the price. If the
theory of manipulation by ECL Group is accepted, as it is,
78(84-6) amalgamation allottees have sold ECL shares at highly
manipulated price and made illegal gains. SEBI has not taken
any action against them. Further, if according to SEBI, if Tulsian
Group is involved in manipulation, they ought to have been
penalised under PFUTP Regulations. Admittedly, they are not
penalised. Therefore, SEBI‟s theory qua Tulsian Group fails .
Consequently, the disgorgement directed against them is not
sustainable in law.
37
Consideration in Appeal Nos.768, 769, 770 and 771 of
2021:
37. Appellants, in all the above appeals, belong to ECL Group.
Their trades are on record and discernible from the trade logs.
We have analysed the inter se connection between the parties
and tabulated hereinabove. In appeal No.768 of 2021, the
appellants have admitted that they are connected through
mobile numbers and email ids and the common mobile numbers
and ids was used for the purpose of sharing information related
to securities. The relevant paragraphs read as follows:
“7.xxxxxxxxxx
b. It is observed based on UCC details, MCA data, Annual report
2010-11 on BSE website that Passim Share Trade Private Limited
(Noticee 11), Appellant 1 & Appellant 2 shared common mobile
number ie., 9137685317. However, the Respondent has failed to
appreciate the submissions made by the Appellants that their
association with the said notices was limited only for the purpose
of sharing information related to the securities market and that the
Appellants were trading in the securities market particularly the
shares of ECL without any knowledge of trading by his associates
or other noticees.
c. It is observed based on UCC details, MCA data, Annual report
2010-11 on BSE website that Appellant 1, 2 & 3 shared common
email id ie., [email protected]. However, the Respondent has
failed to appreciate the submissions made by the Appellants that
their association with the said notices was limited only for the
purpose of sharing information related to the securities market and
that the Appellants were trading in the securities market-
particularly the shares of ECL without any knowledge of trading by
his associates or other noticees.
d. It is observed based on UCC details, MCA data, Annual report
2010-11 on BSE website that Appellant 1 & Appellant 3 shared
common mobile number ie., 7405302044. However, the Respondent
38
has failed to appreciate the submissions made by the Appellants
that their association with the said notices was limited only for the
purpose of sharing information related to the securities market and
that the Appellants were trading in the securities market
particularly the shares of ECL without any knowledge of trading by
his associates or other noticees.
e. It is observed based on UCC details, MCA data, Annual report
2010-11 on BSE website that Appellant 1, 2 & 3 shared common
address ie., 179, Vankar Vas, Vavol, Gandhinagar-382016, Gujarat.
The Appellants submit that the Appellant 1 is the father of
Appellants 2 & 3 and are residing at the same address.
f. It is observed based on UCC details, MCA data, Annual report
2010-11 on BSE website that Manubha Prabhatsang Vaghela
(Noticee 9), Vardhaman Infracon Pvt Ltd (Noticee 6), Blink Share
and Comtrade Pvt Ltd (Noticee 13), Jagdishkumar Amrutlal Akhani
(Noticee 10), Appellant 2 & Appellant 3 shared common mobile
number ie., 9016503605. The said number ie., 9016503605 is
registered in the name of Appellant 3. However, the Respondent has
failed to appreciate the submissions made by the Appellants that
their association with the said notices was limited only for the
purpose of sharing information related to the securities market and
that the Appellants were trading in the securities market
particularly the shares of ECL without any knowledge of trading by
his associates or other noticees.
g. That it is further observed based on UCC details, MCA data,
Annual report 2010-11 on BSE website that Vardhaman Infracon
Pvt Ltd (Noticee 6), S J Infratech Pvt Ltd. (Noticee 7),
Jagdishkumar Amrutlal Akhani (Noticee 10), and the Appellants
shared common email id i.e [email protected]. That it is
further observed based on UCC details, MCA data, Annual report
2010-11 on BSE website that, Sureshbhai Kantilal Thakkar
(Noticee 8), Manubha Prabhatsang Vaghela (Noticee 9),
Jagdishkumar Amrutlal Akhani (Noticee 10) and the Appellant 3
shared common email id ie., [email protected]. That the said
email ids ie.,31sharetrade@ gmail.com, and [email protected]
are registered in the name of the Jagdishkumar Amrutlal Akhani
(Noticee 10). However, the Respondent has failed to appreciate the
submissions made by the Appellants that their association with the
said notices was limited only for the purpose of sharing
information related to the securities market and that the Appellants
were trading in the securities market-particularly the shares of
39
ECL without any knowledge of trading by his associates or other
noticees.
h. It is also observed based on UCC details, MCA data, Annual
report 2010-11 on BSE website that Sureshbhai Kantilal Thakkar
(Noticee 8), Manubha Prabhatsang Vaghela (Noticee 9), SJ
Infratech Private Limited (Noticee 7), Jagdishkumar Amrutlal
Akhani (Noticee 10) and Appellant 3 share common mobile number
ie., 9898096716. The mobile number ie., 9898096716 are
registered in the name of the Jagdishkumar Amrutlal Akhani
(Noticee 10). However, the Respondent has failed to appreciate the
submissions made by the Appellants that their association with the
said notices waslimited only for the purpose of sharing information
related to the securities market and that the Appellants were
trading in the securities market- particularly the shares of ECL
without any knowledge of trading by his associates or other
noticees.”
38. Similarly, in appeal No.770 of 2021, the appellants have
admitted the inter se connections as follows:
“7.xxxxxxxxxxxxxxxx
i. That the Respondent in Table 3 under para 17 under
columns 7 & 8 on page 29 & 30 of the impugned order has
set out the alleged connections between the Appellants and
other Noticees based on common mobile number or email id
or common directorships, which is as following:
That based on UCC details & MCA Data, Jagdishkumar
Amrutlal Akhani (Noticee 10), Rajnikant Ramanbhai Jadav
(Noticee 17) and Appellants, shared common email id
[email protected]. That based on UCC details & MCA
data, Appellants shared common mobile number
9898096710. That based on UCC details & MCA data, S.J.
Infratech Private Limited (Noticee 07), Jagdishkumar
Amrutlal Akhani (Noticee 10), Rajnikant Ramanbhai Jadav
(Noticee 17) and Appellants shared common mobile number
9898096716. That based on UCC details & MCA data, S.J.
Infratech Private Limited (Noticee 07), Jagdishkumar
Amrutlal Akhani (Noticee 10), Blink Share and Comtrade
Private Limited (Noticee 13) and Appellants shared common
40
mobile number 9328341207. That based on UCC details &
MCA data, Jagdishkumar Amrutlal Akhani (Noticee 10) and
Appellant 1 shared common email id
[email protected]. That based on UCC details &
MCA data, Vardhman Infracon Private Limited (Noticee 06),
Jagdishkumar Amrutlal Akhani (Noticee 10), Blink Share and
Comtrade Private Limited (Noticee 13), Yashwant
Ramanbhai Jadav (Noticee 16), Rajnikant Ramanbhai Jadav
(Noticee 17) and Appellant 2 sharedcommon mobile number
9016503605. However, the Respondent has failed to
acknowledge the submissions made by the Appellants that
their connection with the said noticees was limited only for
the purpose of sharing information related to the securities
market and that the Appellants were trading in the securities
market without any knowledge of trading by other noticees.”
39. Admittedly, the illiquid ECL scrip shot from ₹9.60 on
12.04.2013 to ₹490 as on 11.08.2014. Trading commenced on
August 19, 2013 at ₹143/-. We may record that as many as,
97,34,407 shares were traded during the investigation period.
Table 11 in the impugned order demonstrates the inter se trades
between the connected parties and they are not in dispute. A
common defence was urged by the ECL Group appellants is that
the trades are executed on the exchange‟s electronic platform.
Hence, a trader will not know the counter-party. This argument
fails in view of Table 11 in the impugned order, in view of the
factual matrix. Though the „buy‟ and „sell‟ orders were pending
for a period between 9 minutes to 6 hours, the trades have
taken place between the connected entities.
40. It was also argued that Independent Directors cannot be
held responsible. This argument also fails on the factual matrix
because of their indulgence in trading in the scrip during the
investigation period.
41
41. The minimum penalty under Section 15HA of the SEBI Act
is ₹5 Lakhs. The WTM has referred to Section 15J of the SEBI
Act in para 75 of the impugned order. However, no reasons are
recorded as to why some noticees are imposed with the
minimum penalty of ₹5 Lakhs and in some cases more than ₹5
Lakhs. He has recorded in para 76 that the material on record
does not disclose disproportionate gain or unfair advantage by
noticees 1 to 4, 6 to 18 and 31. He has further recorded that the
loss suffered by the investors as a result of price manipulation
was also not quantifiable. Therefore, in our view, a common
quantum of penalty against all noticees of ECL Group is just and
appropriate. Accordingly, the penalty against noticee Nos.1, 3, 4,
6, 8, 9, 12, 13, 14, 15 is reduced to ₹5 Lakhs under Section
15HA of the SEBI Act. In case of noticee No.1 (Payal Madiyar),
the WTM imposed penalty of ₹4 Lakhs and in case of noticee
No.3 (Jayesh Madiyar) ₹6 Lakhs under Sections 15A(b) and
15HB. Noticee Nos.1 and 3 have admitted that they did not
disclose the quantum of shares acquired by inadvertence. Hence,
the said penalties against them are sustained.
42. In the result, the following:
ORDER
i. Appeal Nos.768, 769, 770, 771 of 2021 are allowed in
part .
ii. Penalty against appellants in Appeal Nos.770, 771 of 2021;
appellant Nos.1, 4, 5 and 6 in Appeal No.769 of 2021; and
appellant No.1 in Appeal No.768 of 2021 (i.e. Noticee
42
Nos.1, 3, 4, 6, 8, 9, 12, 13, 14, 15) under Section 15HA of
the SEBI Act is reduced to ₹5 Lakhs.
iii. Appeal No.489 of 2022 is allowed and the impugned order
dated 01.10.2021, passed by the WTM, SEBI is set aside
qua the appellant.
iv. Appeal No.780 of 2021 is dismissed .
v. Appeal No.802 of 2021 is allowed . Order dated
01.10.2021 passed by the WTM, SEBI is set aside qua the
appellants. (Noticee Nos.22, 23, 24, 26 and 30 in the
impugned order).
vi. Remaining portion of the order is undisturbed.
vii. Pending interlocutory application(s), if any, stand disposed
of.
viii. No costs.
Justice P.S. Dinesh Kumar
Presiding Officer
Ms. Meera Swarup
Technical Member
Dr. Dheeraj Bhatnagar
Technical Member
23.06.2026
RHN
RAJAL
AKSHM
I H
NAIR
Digitally
signed by
RAJALAKSHMI
H NAIR
Date:
2026.06.23
15:35:00
+05'30'