Vanya Jain vs SEBI

IN THE SECURITIES APPELLATE TRIBUNAL AT
MUMBAI

TH
DATED THIS THE 8 DAY OF JULY, 2026


CORAM : Justice P. S. Dinesh Kumar, Presiding Officer
Ms. Meera Swarup, Technical Member
Dr. Dheeraj Bhatnagar, Technical Member


Appeal No. 397 of 2023


Between


Vanya Jain
C3/15, Ashok Vihar,
Delhi – 110052.



…. Appellant

By Mr. Kushal Shah, CA with Dr. Keyur Shah, Advocate i/b
Prakash Shah and Associates for the Appellant.

And

Securities & Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G Block,
Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051.



…. Respondent

By Mr. Abhishek Nair, Advocate i/b Mansukhlal Hiralal & Co.
for the Respondent.


With
Appeal No. 398 of 2023

Between

Utkarsh Jain
C3/15, Ashok Vihar,
Delhi – 110052.


…. Appellant

2



By Mr. Kushal Shah, CA with Dr. Keyur Shah, Advocate i/b
Prakash Shah and Associates for the Appellant.

And

Securities & Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G Block,
Bandra Kurla Complex,
Bandra (East),
Mumbai - 400 051.




…. Respondent

By Mr. Abhishek Nair, Advocate i/b Mansukhlal Hiralal & Co.
for the Respondent.

THESE APPEALS ARE FILED UNDER SECTION 15T OF
SEBI ACT, 1992 TO SET ASIDE ORDER DATED
FEBRUARY 21, 2023, (EX-A) PASSED BY AO, SEBI.

THESE APPEALS HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON MAY 4, 2026, COMING ON FOR
TH
PRONOUCEMENT OF ORDER THIS 8 DAY OF JULY
2026 THE TRIBUNAL MADE THE FOLLOWING :


O R D E R


Per: Dr. Dheeraj Bhatnagar, Technical Member

These two appeals are directed against order dated
1 2
21.02.2023 passed by the AO , SEBI imposing penalty of
₹10 Lakh each on appellants for violating securities laws.

2. Brief facts of the case are:



1 Adjudication Officer
2 Securities and Exchange Board of India

3
a) Upon receipt of certain complaints, SEBI conducted
an investigation in the scrip of the North Eastern
Carrying Corporation Ltd. (‘Company/NECC’ for
Short) for the period between 27.12.2016 and
21.04.2017.

b) Stock Exchanges had also received complaints
about recommendation to ‘buy’ NECC shares.

c) The appellants, Utkarsh Jain (Noticee No.1) and his
mother Vanya Jain (Noticee No.2), are promoters of
NECC.

3 4
d) SEBI issued an SCN and a supplementary SCN to
six noticees including the appellants alleging inter
alia that appellants along with connected entities
created artificial and fictitious trading volume in
NECC scrip giving misleading appearance to provide
exit to the appellants.

e) Utkarsh Jain sold 9,50,000 shares on BSE and
18,96,090 shares on NSE on 6 trading days
contributing 31.10% and 25.30% of market volume
respectively. Vanya Jain sold 7,50,198 shares on
BSE and 8,75,887 shares on NSE on 6 trading days
out of 79 total trading days.

3. We have heard Mr. Kushal Shah, CA, Authorised
Representative for the appellants and Mr. Vyom Shah,
learned Advocate for the SEBI.


3
Show Cause Notice dated 22.09.2022
4
Dated 27.01.2023

4
4. Mr. Kushal Shah for the appellants submitted that all
transactions were genuine and done in the normal course at
prevailing market price through registered brokers on screen-
based trading platforms. Further, matching of trades on the
securities market is an advanced algorithm process. Hence,
prior meeting of mind was not possible.

5. He submitted that there are no direct or indirect
connections between the appellants and other
noticees/counter parties. The impugned order does not
contain the allegation of price manipulation against the
appellants and the allegation of creation of artificial volume is
based on erroneous assumption without any evidence.

6. He submitted that on each day of appellants’ trades, there
were sufficient volume on the exchanges and therefore, the
‘sell’ trades of the appellants have legitimately matched with
market participants. Further, no alert was generated either
by SEBI or Exchanges at the time of trading.

7. He further submitted that imposition of penalty on
appellants is discriminatory, harsh and in similar cases, SEBI
has given only warning. Further, the AO has acknowledged
in the impugned order that no disproportionate gain or unfair
advantage was made by the appellants and no quantifiable
loss to any investor could be calculated from the material on
record. Further, there is nothing on record to indicate any
past violation by the appellants and hence, imposing penalty
is unjust.

5
8. In support of his case, he has relied upon SEBI v. Rakhi
5
Trading Pvt. Ltd , Manjulaben Bhaveshkumar Rangee
6 7
v. SEBI , Abhinandan Jain v. SEBI , Baldevsinh
8
Vijaysinh Zala v. SEBI , S.P.J. Stock Brokers Pvt Ltd v.
9
SEBI .

9. In reply, Mr. Vyom Shah, learned Advocate for the SEBI
submitted that the appellants are ‘connected’ with 18
counter-party entities. Noticee No. 1, Utkarsh Jain is the
Promoter-Director of the Company NECC and his mother
Vanya Jain too is a Promoter. Utkarsh Jain and one Pramod
Jain were Directors in NECC Retail Solutions Pvt. Ltd. and two
other companies. Mr. Pramod Jain was also a director in M/s
Plus Corporate Venture which is ‘connected’ with other
entities through common mobile number, bank transactions,
etc. The inter se ‘connection’ among other counter-party
entities is established through common directors, common
mobile numbers, common addresses and bank/off-market
transactions. The key connected entities include noticee Nos.
10 11
3 , 4 and other companies.

10. He submitted that it cannot be a mere coincidence that
such substantial trades executed by noticee Nos. 1 and 2 on
an anonymous trading platform consistently matched with a
specific group of connected entities in terms of volume and
price without any prior ‘meeting of minds’. The trading

5
Civil Appeal No. 1969 of 2011, decided on February 8, 2018 by the
Hon’ble Supreme Court of India
6
Appeal No. 1030 of 2022, decided on November 6, 2023 by the
Securities Appellate Tribunal, Mumbai
7
Appeal No. 129 of 2023, decided on June 7, 2023 by the Securities
Appellate Tribunal, Mumbai
8
Appeal No. 150 of 2019, decided on August 12, 2021 by the Securities
Appellate Tribunal, Mumbai
9
Appeal No. 52 of 2013, decided on September 4, 2013 by the Securities
Appellate Tribunal, Mumbai
10
Charamshukh IT Marketing Pvt. Ltd.
11
Realstep Agencies Pvt. Ltd.

6
pattern evidences pre-arranged mechanism to facilitate exit
to the appellants.

11. He submitted that out of 9,50,000 shares sold by
Utkarsh Jain (Noticee No. 2) on 6 days on BSE, 7,05,213
shares (74.23%) were purchased by the connected entities.
Out of 217 trades, 138 were ‘structured’, i.e. spaced within
less than 1 minute, which accounted for 41.15% of his net
sell quantity and those 217 trades constituted 31.10% of the
total market volume on BSE. On the NSE, he traded on 6 days
and sold 18,96,090 shares, out of which 12,90,878 shares
(68.08%) were purchased by the connected entities. Out of
555 trades, 449 were structured. Those 555 trades
constituted 25.30% of the total market volume on the NSE.
All trades were executed between 06.02.2017 and
13.04.2017.

12. Regarding the trades executed by Vanya Jain (Noticee
No. 2), he submits that during the investigation period, she
traded on 5 days on BSE and sold 7,50,198 shares, out of
which 1,36,513 shares (18.20%) were purchased by the
connected entities. These trades accounted for 24.01% of the
market volume on BSE. On NSE, she sold 8,75,887 shares
over 6 trading days, of which 94,728 shares (10.82%) were
purchased by connected entities accounting for 13.60% of the
market volume on NSE. All trades were executed between
16.01.2017 and 06.02.2017.

13. Learned advocate for the SEBI placed emphasis on the
structured nature of the trades and submitted that the
absence of price variation, coupled with consistent quantity
matching by connected counterparties in a staggered
manner, demonstrates that the objective was not genuine
price discovery, but controlled absorption of supply. No

7
intervening trades were observed with unrelated market
participants during the intervals.

14. He submitted that complete absence of price
movement despite substantial traded volumes confirms that
the transactions were confined within a closed group of
entities operating in concert. In a genuine market, significant
selling pressure would cause downward price movement. The
artificial maintenance of price at a constant level
notwithstanding large trades evidences pre-arranged
matching and the consequent inflation of trading volumes
created false impression of market participation, attracting
gullible investors to trade in an otherwise illiquid scrip.

15. He further submitted that prior to the investigation
period, Utkarsh Jain held 30,00,000 shares (5.98%) and
Vanya Jain held 22,74,900 shares (4.53%) of NECC. During
the investigation period, Utkarsh Jain's holding sharply
declined his holding to 9,58,910 shares (1.91%) by March,
2017 and Vanya Jain's reduced to 6,48,815 shares (1.29%).
The pattern of substantial off-loading during the investigation
period, facilitated by the connected entities is consistent with
the structured exit mechanism identified in the investigation.
In support of his submissions, he relied upon Systematix
12 13
Shares & Stocks (I) Ltd. , SEBI v. Kishore R. Ajmera .

16. We have carefully considered rival contentions and
perused the records.

17. The point that arises for our consideration is, whether
appellants (noticee Nos. 1 and 2) have created artificial
/ fictitious volumes by selling their holdings in the

12
Appeal No. 21 of 2012 decided on April 23, 2012 by SAT
13
(2016) 6 SCC 368

8
scrip of NECC through structured transactions with
certain connected counter-party buyers?

18. It is alleged that the appellants systematically offloaded
shares on NSE and BSE during the investigation period in a
structured manner with connected entities, who placed ‘buy’
orders with same volume and purchase price within a short
time after ‘sell’ order, i.e., with the time difference of less
than one minute between the ‘sell’ order and the ‘buy’ order.

19. The main contention of the appellants is that they had
executed these transactions through IT-based trading
platform of stock exchange, in which the identity of the
seller/buyers is not revealed. Further, undisputedly, these
transactions were carried out at prevailing market price,
which could not have adversely impacted on the uninformed
investors. The matching of orders on the exchange platform
is extremely advanced with computer software given
algorithm process in which system itself matches orders on a
price-time priority basis. Therefore, it is not possible to have
access to the counter-party.

20. The next contention is that the SEBI has not brought
out any direct connection between the appellants and the
counter-parties and the learned AO has himself observed in
the impugned order that ‘there is no direct connection’
between the appellants on one side and counter parties on
another side. Further, such trades with alleged counter-
parties were miniscule and were only on 6 out of 79 days of
the investigation period.

21. We note that no proceedings have been initiated against
the said ‘counter-parties’ except 2, even though the

9
allegation is of ‘meeting of minds’ for artificially inflating
volume, which renders the allegation baseless.

22. We find that the investigation report notes that there
were complaints of sudden price rise in the scrip of NECC
followed by the price falls, as also of spread of SMSs from
various IDs recommending investors to ‘buy’ the scrip of
NECC. However, in the investigation, the allegation of
manipulating the price rise was not proved based on the
finding that the transactions between the suspected entities
14
contributed to -10.25 % of the LTP and -37.35% to negative
LTP, which was less than 5.56% to the market LTP and it is
held as insignificant. Further, the investigation report reveals
no ‘connection’ between the appellants who are the
promoters of NECC with M/s. Market Magnify Global Research
Pvt. Ltd. (‘Market Magify’ for short), who is alleged of sending
SMS messages. No fund transaction between them is noted
and no adverse finding has been drawn against Market
Magnify.

23. With regard to the alleged inter se structured trades
amongst the ‘connected entities’ (other than the appellants),
the charge was dropped considering such contribution, being
less than 10%. However, the investigation report charges
these counter-party entities for structured trading for
allowing the appellants to exit by off-loading their shares. We
may record that 9 out of 11 alleged connected entities have
been let off without mentioning any reason in the impugned
order.

24. We find no tenable basis for appellants’ connection
which hinges on Pramod Jain and Utkarsh Jain being directors

14
Last Traded Price

10
in NECC Retail. Mr. Pramod Jain has not been charged in
these investigations and he had quit directorship of NECC
retail, (which is the only connection between Utkarsh and
Pramod Jain) prior to the impugned transactions. Mr. Pramod
Jain was a director in another company, Plus Corporate
Venture Pvt. Ltd (‘Plus Corporate’ for short). The said Plus
Corporate had bank transactions with another entity
Charamsukh (noticee No.3). While other entities are alleged
to be connected with Charamsukh (noticee No.3) either
through mobile number or common address and the
appellants have no connection whatsoever with any one of
them. Therefore, holding them as ‘connected entities’ based
on the sole connection of Pramod is very fragile because,
Pramod Jain was an ex-director of NECC Retail, another
related company. Unless, there is material to establish that
he had continued relation with Utkarsh Jain, this allegation,
in our view is without any credible evidence. Further, Mr.
Pramod Jain is neither a director nor shareholder in counter-
party companies and therefore, these companies cannot be
held to be ‘connected’ with Mr. Pramod Jain and through him
with the appellants. Under these circumstances, on the face
of it, no connection direct or indirect, could be established
between the appellants and 9 counter-party entities (which
are indirectly connected with Charamsukh) through Mr.
Pramod Jain.

25. We also note that transactions have taken place on the
floor of the stock exchanges on certain specified dates and
despite the said transactions, the promoters continued to
hold significant shareholding and control over the company
NECC. In the investigation report, allegation of price rise was
also dropped. Therefore, the allegation of allowing exit to 2
persons i.e. appellant-promoters in the absence of price rise

11
does not establish any mens rea. We note that learned AO
has recorded that there is no direct ‘connection’ of appellants
with the alleged connected parties and except 2, none of
them have not been charged in the impugned order. Since,
the allegation of structured transactions within a short time
between the appellants on one side and counter-parties on
the other is based on presumption of prior ‘meeting of minds’,
particularly when the counter-party entities are not charged,
the allegation against the appellant is untenable.

26. The learned AO relying upon Systematix Share
(supra) has attempted to justify by holding that action was
not initiated in case of certain counter-parties based on
severity of allegation. We note that the said decision was
given based on peculiar facts of that case. However, in the
present case, we note that in the inspection report, 11
counter-parties were recommended to be charged for
violation of PFUTP Regulations along with noticee Nos. 1 and
2 and neither in inspection report nor in the impugned order
any assessment of relative severity of violation is made.
Under the circumstances, the charge of “meeting of minds”
for orchestrating structured transactions for artificial inflation
in volumes does not sustain.

27. We also note that the appellants have duly disclosed
these transactions under Regulation 29(2) and 29(3) of the
15
SAST Regulations and Regulation 7(2(a) of the SEBI (PIT)
16
Regulations . Further, the allegation of misleading the
investors is not supported by any finding of increased interest
in NECC during the six dates of alleged transactions. On the
other hand, admittedly, on these six dates, it was Utkarsh

15
SEBI (Substantial Acquisition of Shares and Takeover) Regulations,
2011
16
SEBI (Prohibition of Insider Trading) Regulations, 2015

12
Jain, who was responsible for 74.23% volume on BSE and
68.08% volume on NSE while Vanya Jain is responsible for
18.20% on BSE and 10.82% on NSE, with ‘connected
entities’. Thus, there is no empirical finding in support of the
allegation of misleading and adversely impacting other
investors. We have already noted that there is no allegation
of price manipulation.

Accordingly, we decide the point for consideration as
Negative.

28. In view of the above discussion, the following :-

ORDER

i. Appeal Nos.397 and 398 of 2023 are allowed .

ii. Order dated 21.02.2023 passed by the AO, SEBI is
set aside qua the appellants.

iii. Pending interlocutory application(s), if any, stand
disposed of.

iv. No costs.


Justice P. S. Dinesh Kumar
Presiding Officer


Ms. Meera Swarup
Technical Member


Dr. Dheeraj Bhatnagar
Technical Member
08.07.2026
PTM
Digitally signed
by MRS PRAMILA
Date: 2026.07.09
10:36:54 +05'30'
MRS
PRAMILA