Riddhi Siddhi Gluco Biols Limited & Others vs SEBI
- Court
- Securities Appellate Tribunal
- Case type
- SEBI
- Decided on
- 09-03-2026
IN THE SECURITIES APPELLATE TRIBUNAL
AT MUMBAI
TH
DATED THIS THE 09 DAY OF MARCH, 2026
CORAM: Justice P.S. Dinesh Kumar, Presiding Officer
Ms. Meera Swarup, Technical Member
Dr. Dheeraj Bhatnagar, Technical Member
Appeal No.543 of 2021
[Along with Misc. Application No.243 of
2023]
1. Riddhi Siddhi Gluco Biols Limited
10, Abhishree Corporate Park,
Near Swagat Bungalow BRTS
stand Ambli-Bopal Road
Ambli-Ahmedabad, Gujarat -380058.
2. Ganpatraj Lalchand Chowdhary
Rajul Villa, Nr Swagat Bunglow BRTS
stand Ambli-Bopal Road
Ambli-Ahmedabad, Gujarat -380058.
3. Sidhharth G Chowdhary
Rajul Villa, Nr Swagat Bunglow BRTS
stand Ambli-Bopal Road
Ambli-Ahmedabad, Gujarat -380058. …Appellants
(By Mr. J. P. Sen, Senior Advocate with Mr. Nirav Shah, Ms.
Yugandhara Khanvilkar and Ms. Ashwini Hariharan, Advocates
i/b. DSK Legal for the Appellants.)
Securities and Exchange Board of India
Plot No. C4-A, G Block,
Bandra Kurla Complex,
Bandra(E), Mumbai 400051. …Respondent
2
(By Mr. Vyom Shah, Advocate with Ms. Khushbu Chhajed, Mr.
Nishit Dhruva, Ms. Rasika Ghate and Ms. Khushbu Trivedi,
Advocates i/b. MDP Legal for the Respondent.)
With
Appeal No.588 of 2021
[Along with Misc. Application No.257
of 2023]
1. Riddhi Siddhi Gluco Biols Limited
10, Abhishree Corporate Park,
Nr Swagat Bungalow BRTS
stand Ambli-Bopal Road
Ambli-Ahmedabad, Gujarat -380058.
2. Ganpatraj Lalchand Chowdhary
Rajul Villa, Nr Swagat Bungalow BRTS
stand Ambli-Bopal Road
Ambli-Ahmedabad, Gujarat -380058.
3. Sidhharth G Chowdhary
Rajul Villa, Nr Swagat Bungalow BRTS
stand Ambli-Bopal Road
Ambli-Ahmedabad, Gujarat -380058.
4. Creelotex Engineers Private Limited
10, Abhishree Corporate Park,
Opp. Swagat Bunglow BRTS
Stand Ambli-Bopal Road
Ahmedabad, Gujarat -380058.
5. Ganpatraj Chowdhary HUF
Rajul Villa, Nr Swagat Bungalow BRTS
stand Ambli-Bopal Road
Ambli-Ahmedabad, Gujarat -380058.
6. Mukeshkumar R. Samdaria
D-201, Vraj Vihar 8,
Behind Indraprastha 6,
Prahaladnagar, Satellite -380015. …Appellants
3
(By Mr. J.P. Sen, Senior Advocate with Mr. Nirav Shah, Ms.
Yugandhara Khanvilkar and Ms. Ashwini Hariharan, Advocates
i/b. DSK Legal for the Appellants.)
Securities and Exchange Board of India
Plot No.C4-A, G Block,
Bandra Kurla Complex,
Bandra(E), Mumbai 400051. …Respondent
(By Mr. Vyom Shah, Advocate with Ms. Khushbu Chhajed, Mr.
Nishit Dhruva, Ms. Rasika Ghate and Ms. Khushbu Trivedi,
Advocates i/b. MDP Legal, Advocates for the Respondent.)
With
Appeal No.596 of 2021
1. Oswal Shares and Securities Ltd.
Head office at 605 Sakar 1,
Opp Nehrubridge, Ashram Road,
Ahmedabad(GJ) 380009.
2. Javerilal Gopilal Oswal
126 Prernatirth Bunglows Part 2
Satelite, Ahmedabad 380015.
3. Kalpesh Javerilal Oswal
126 Prernatirth Bunglows Part 2
Satelite, Ahmedabad 380015. …Appellants
(By Mr. Yash Momaya, Advocate with Mr. Munaf Virjee, Mr.
Rushabh Parekh and Ms. Mithali Shetty, Advocates i/b. AMR Law
for the Appellants.)
Securities and Exchange Board of India
SEBI Bhavan, Plot No.C4-A, G Block,
Bandra Kurla Complex,
Bandra (E), Mumbai 400051. …Respondent
4
(By Mr. Vyom Shah, Advocate with Ms. Khushbu Chhajed, Mr.
Nishit Dhruva, Ms. Rasika Ghate and Ms. Khushbu Trivedi,
Advocates i/b. MDP Legal, Advocates for the Respondent.)
With
Appeal No.597 of 2021
1. Javerilal Oswal Commodities Pvt Ltd
Head office at 605 Sakar 1,
Opp. Nehrubridge, Ashram Road,
Ahmedabad – 380009.
2. Javerilal Gopilal Jain HUF
Head office at 605 Sakar 1,
Opp Nehrubridge, Ashram Road,
Ahmedabad – 380009.
3. Tankidevi Javerilal Oswal
126 Prernatirth Bunglows Part 2,
Satelite, Ahmedabad 380015.
4. Vanita Kalpesh Oswal
126 Prernatirth Bunglows Part 2,
Satelite, Ahmedabad 380015.
5. Kalpana Javerilal Oswal
126 Prernatirth Bunglows Part 2,
Satelite, Ahmedabad 380015.
6. Kavita Javerilal Oswal
126 Prernatirth Bunglows Part 2,
Satelite, Ahmedabad 380015. …Appellants
(By Mr. Yash Momaya, Advocate with Mr. Munaf Virjee, Mr.
Rushabh Parekh and Ms. Mithali Shetty, Advocates i/b. AMR Law
for the Appellants.)
Securities and Exchange Board of India
SEBI Bhavan, Plot No.C4-A, G Block,
Bandra Kurla Complex,
5
Bandra (E), Mumbai 400051. …Respondent
(By Mr. Vyom Shah, Advocate with Ms. Khushbu Chhajed, Mr.
Nishit Dhruva, Ms. Rasika Ghate and Ms. Khushbu Trivedi,
Advocates i/b. MDP Legal for the Respondent.)
With
Appeal No.598 of 2021
1. Rajendrakumar Gopilal Jain
404, Sahajanand Park, Shahibaug,
Ahmebdabad – 380004.
2. Akshay Rajendrabhai Oswal
404, Sahajanand Park, Shahibaug,
Ahmebdabad – 380004.
3. Akshita Rajendra Shah
404, Sahajanand Park, Shahibaug,
Ahmebdabad – 380004. …Appellants
(By Mr. Yash Momaya, Advocate with Mr. Munaf Virjee, Mr.
Rushabh Parekh and Ms. Mithali Shetty, Advocates i/b. AMR Law
for the Appellants.)
Securities and Exchange Board of India
SEBI Bhavan, Plot No.C4-A, G Block,
Bandra Kurla Complex,
Bandra (E), Mumbai 400051. …Respondent
(By Mr. Vyom Shah, Advocate with Ms. Khushbu Chhajed, Mr.
Nishit Dhruva, Ms. Rasika Ghate and Ms. Khushbu Trivedi,
Advocates i/b. MDP Legal for the Respondent.)
With
Appeal No.600 of 2021
1. Ravikumar Javerilal Oswal
126 Prernatirth Bunglows Part 2,
6
Satelite, Ahmedabad 380015.
2. Monika Dharmendra Abbani
602, Somerset Building Opp.
D Mart,Hiranandani Gardens,
Mumbai- 400076.
3. Sangeeta Dinesh Abbani
Odessey 1 Block, No.403,
th
4 Floor, Hiranandani Garden,
Powai, Mumbai – 400076 …Appellants
(By Mr. Yash Momaya, Advocate with Mr. Munaf Virjee, Mr.
Rushabh Parekh and Ms. Mithali Shetty, Advocates i/b. AMR Law
for the Appellants.)
Securities and Exchange Board of India
SEBI Bhavan, Plot No.C4-A, G Block,
Bandra Kurla Complex,
Bandra(E), Mumbai 400051. …Respondent
(By Mr. Vyom Shah, Advocate with Ms. Khushbu Chhajed, Mr.
Nishit Dhruva, Ms. Rasika Ghate and Ms. Khushbu Trivedi,
Advocates i/b. MDP Legal for the Respondent.)
With
Appeal No.617 of 2021
Metroglobal Limited
st
101, 1 Floor, “Mangal Disha”,
Near Guru Gangeshwar Temple,
th
6 Road, Khar(West),
Mumbai – 400 052. …Appellant
(By Mrs. Neha Anchlia, Advocate i/b. M/s. Naresh Akshay Legal
Services LLP for the Appellant.)
7
Securities and Exchange Board of India
SEBI Bhavan, Plot No.C4-A, “G” Block,
Bandra Kurla Complex,
Bandra (E), Mumbai - 400051. …Respondent
(By Mr. Vyom Shah, Advocate with Ms. Khushbu Chhajed, Mr.
Nishit Dhruva, Ms. Rasika Ghate and Ms. Khushbu Trivedi,
Advocates i/b. MDP Legal, Advocates for the Respondent.)
With
Appeal No.619 of 2021
1. M/s Vital Connections LLP
10, Amizara CHS Ltd,
Rambaug Road, Ramnagar,
Sabarmati, Ahmedabad 380005.
2. Mr. Mohit Bagmar
10, Amizara Society,
Rambaug Road, Ramnagar,
Sabarmati, Ahmedabad 380005.
3. Mrs. Sayaridevi Bagmar
10, Amizara Society,
Rambaug Road, Ramnagar,
Sabarmati, Ahmedabad 380005. …Appellants
(By Mr. Rushin Kapadia, Advocate with Ms. Kamakshi and Ms.
Gayatri Mohite, Advocates i/b. Anchorstone Legal for the
Appellant.)
Securities and Exchange Board of India
Plot No. C4-A, G Block,
Bandra Kurla Complex,
Bandra(E), Mumbai - 400051 …Respondent
8
(By Mr. Vyom Shah, Advocate with Ms. Khushbu Chhajed, Mr.
Nishit Dhruva, Ms. Rasika Ghate and Ms. Khushbu Trivedi,
Advocates i/b. MDP Legal, Advocates for the Respondent.)
With
Appeal No.634 of 2021
Lalitkumar Ranmal HUF
1, Ambience Apartments,
Navyug Society, Nr. SBI,
Nehrunagar, Ahmedabad – 380015. …Appellant
(By Mr. Deepak Shah, Advocate for the Appellant.)
Securities and Exchange Board of India
SEBI Bhavan, Plot No.C4-A, G Block,
Bandra Kurla Complex,
Bandra (E), Mumbai - 400051. …Respondent
(By Mr. Vyom Shah, Advocate with Ms. Khushbu Chhajed, Mr.
Nishit Dhruva, Ms. Rasika Ghate and Ms. Khushbu Trivedi,
Advocates i/b. MDP Legal for the Respondent.)
With
Appeal No.635 of 2021
Shobha Lalitkumar Shah
1, Ambience Apartments,
Navyug Society, Nr. SBI,
Nehrunagar, Ahmedabad – 380015. …Appellant
(By Mr. Deepak Shah, Advocate for the Appellant.)
Securities and Exchange Board of India
SEBI Bhavan, Plot No.C4-A, G Block,
Bandra Kurla Complex,
Bandra(E), Mumbai: 400051. …Respondent
9
(By Mr. Vyom Shah, Advocate with Ms. Khushbu Chhajed, Mr.
Nishit Dhruva, Ms. Rasika Ghate and Ms. Khushbu Trivedi,
Advocates i/b. MDP Legal for the Respondent.)
With
Appeal No.636 of 2021
Sneha Lalitkumar Shah
1, Ambience Apartments,
Navyug Society, Nr. SBI,
Nehrunagar, Ahmedabad – 380015. …Appellant
(By Mr. Deepak Shah, Advocate for the Appellant.)
Securities and Exchange Board of India
SEBI Bhavan, Plot No.C4-A, G Block,
Bandra Kurla Complex,
Bandra(E), Mumbai: 400051. …Respondent
(By Mr. Vyom Shah, Advocate with Ms. Khushbu Chhajed, Mr.
Nishit Dhruva, Ms. Rasika Ghate and Ms. Khushbu Trivedi,
Advocates i/b. MDP Legal for the Respondent.)
THESE APPEALS ARE FILED UNDER SECTION 15T OF SEBI ACT,
1992 TO SET ASIDE THE IMPUGNED ORDER DATED JULY 2, 2021
PASSED BY THE AO, SEBI AND ORDER DATED AUGUST 11, 2021
PASSED BY THE WTM, SEBI
THESE APPEALS HAVING BEEN HEARD AND RESERVED FOR
ORDERS ON DECEMBER 16, 2025 COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE TRIBUNAL MADE THE
FOLLOWING:
10
ORDER
Per: Justice P. S. Dinesh Kumar, Presiding Officer
These appeals are directed against order dated July 2,
1 2
2021, passed by the AO , SEBI and order dated August 11,
3 4
2021, passed by the WTM , SEBI for violation of the SEBI Act ,
5 6 7
SEBI (LODR) Regulations , SEBI (SAST) Regulations , SCR Act
8
and SEBI (PFUTP) Regulations .
2. The AO has imposed a penalty of ₹5 Lakhs on each
appellant in Appeal No.543 of 2021. The WTM has directed the
appellants in appeals other than Appeal No.543 of 2021 to
comply with MPS requirements and debarred them from
accessing the securities market for the period mentioned in
paragraph 131.2. of that order.
3. The list of Appeals are as follows:
Sr. No. Appeal No. Filed by
1. 543 of
2021
1. Riddhi Siddhi Gluco Biols Limited
2. Ganpatraj Lalchand Chowdhary
(Director)
3. Siddharth G Chowdhary (Director)
1
Adjudicating Officer
2
Securities and Exchange Board of India.
3
Whole Time Member
4
Securities and Exchange Board of India Act, 1992
5
SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015
6
SEBI (Substantial Acquisition of Shares and Takeover)Regulations, 2011
7
Securities Contract(Regulations) Act, 1956
8
SEBI (Prohibition of fraudulent and unfair Trade Practices Relating to
Securities Market) Regulations,2003
11
2. 588 of
2021
1. Riddhi Siddhi Gluco Biols Limited,
2. Ganpatraj Lalchand Chowdhary,
3. Siddharth G Chowdhary,
4. Creelotex Engineers Private
Limited
5. Ganpatraj Chowdhary HUF and
6. Mukeshkumar R Samdaria
3. 596 of
2021
1. Oswal Shares and Securities
Limited,
2. Javerilal Gopilal Oswal
3. Kalpesh Javerilal Oswal
4. 597 of
2021
1. Javerilal Oswal Commodities Pvt.
Ltd.,
2. Javerilal Gopilal Jain HUF,
3. Tankidevi Javerilal Oswal,
4. Vanita Kalpesh Oswal,
5. Kalpana Javerilal Oswal
6. Kavita Javerilal Oswal
5. 598 of
2021
1. Rajendrakumar Gopilal Jain,
2. Akshay Rajendrabhai Oswal
3. Akshita Rajendra Shah
6. 600 of
2021
1. Ravikumar Javerilal Oswal,
2. Monika Dharmendra Abbani
3. Sangeeta Dinesh Abbani
7. 617 of
2021
Metroglobal Limited
8. 619 of
2021
1. M/s. Vital Connections LLP(earlier
Vital Connections Private Limited),
2. Mr. Mohit Bagmar
3. Sayaridevi Bagmar
9. 634 of
2021
Lalitkumar Ranmal HUF
10. 635 of
2021
Shobha Lalitkumar Shah
11. 636 of
2021
Sneha Lalitkumar Shah
12
These appeals are heard simultaneously and disposed of by this
common order.
4. We have heard Mr. J.P. Sen, learned Senior Advocate for
the appellants in Appeal No.543 of 2021 and Appeal No. 588 of
2021; Mr. Yash Momaya, learned Advocate for the appellants in
Appeal Nos.596, 597, 598 and 600 of 2021 ; Mrs. Neha Anchlia,
learned Advocate for the appellants in Appeal No.617 of 2021;
Mr. Rushin Kapadia, learned Advocate for the appellants in
Appeal No.619 of 2021; Mr. Deepak Shah, learned Advocate for
the appellants in Appeal No. 634, 635 and 636 of 2021 and Mr.
Vyom Shah, learned Advocate for the SEBI.
9
5. Brief facts of the case are, one Mr. Ganpatraj Chowdhary
10 11
was the CMD of a listed company called Riddhi Siddhi
(„Company‟ for short). He submitted a proposal for delisting
Company‟s scrip from the BSE. BSE granted in-principle approval
for delisting. The delisting offer was opened on March 6, 2018
and closed on March 12, 2018. The price discovered in the
reverse book building (RBB) was ₹630 per share. SEBI received
complaints from investors and directed BSE to keep the delisting
on hold and finally, on December 26, 2018 the in-principle
approval was withdrawn.
6. SEBI conducted an investigation into Company‟s scrip for
the period between December 1, 2016 and March 12, 2018 and
12
it was observed that Riddhi Siddhi had not disclosed Stuti ,
9
Appellant No.2 in Appeal Nos.543 and 588 of 2021 and „Ganpatraj‟ for short
10
Chairman and Managing Director
11
Riddhi Siddhi Gluco Biols Limited
12
Stuti Trademart Private Limited
13
13 14
Siwana and Vital as promoter group entities, thereby failed to
disclose promoters‟ shareholding.
7. It was also observed that the appellants had (i)
participated in fraudulent schemes and traded in the shares of
Riddhi Siddhi; (ii) tendered the shares at fraudulently arrived
price; and (iii) Riddhi Siddhi did not comply with the minimum
public shareholding (MPS) norms. Accordingly, SEBI issued two
15
show cause notices. The first SCN by the WTM to show cause
as to why directions under Section 11(1), 11(4) and 11B of the
SEBI Act should not be issued against the noticees. The second
16
SCN by the AO calling upon the noticees to show cause as to
why proceedings should not be initiated and penalty be not
imposed for violation of securities laws. Noticees filed their
replies and submissions. After granting personal hearing, the
impugned orders have been passed.
Appeal No.543 of 2021, Appeal No.588 of 2021 And
Appeal No. 619 of 2021
8. Mr. Sen, learned Senior Advocate submitted that in 1992-
93, there was a family arrangement in Chowdhary family and it
was segregated into two groups viz. Group A and Group B.
Group-A
Mr. Ganpatraj Chowdhary,
Mr. Shankarlal Chowdhary; and
13
Siwana Agri Marketing Limited
14
Vital Connections Private Limited
15
Show cause notice dated December 20,2019
16
Show cause notice dated October 8,2020
14
Mr. Sampatraj Chowdhary (along with their spouses
and children and entities controlled by them); and
Group-B
Mr. Babulal Chowdhary; and
the sisters (i.e. Mrs. Sayaridevi Bagmar and Mrs.
Mosami Tater);
Stuti and Siwana controlled by them.
9. The allegation levelled by the SEBI with regard to Stuti is,
immediate relatives of Ganpatraj and promoter group of Riddhi
Siddhi collectively held 86.75% (in FY 2014-15), 97.09% (in FY
2015-16) and 100% (in FY 2016-17) shares in Stuti. In
substance, Stuti was not declared as a promoter group entity.
10. The allegation levelled with regard to Siwana is, immediate
relatives of Ganpatraj and promoter group of Riddhi Siddhi
collectively held 32.41% (in FY 2014-15 and 2015-16), 96.29%
(in FY 2016-17) shares in Siwana and it was not declared as a
promoter group entity.
11. With regard to shareholding pattern in Stuti, Mr. Sen
17
submitted that for FY ending March 31, 2015 Ganpatraj, Vicas
18
and Creelotex together held 20.58%. Creelotex and Vicas sold
their shares in Stuti on March 29, 2016. Ganpatraj continued to
hold 7.77% shares, which was also subsequently sold on March
30, 2017.
17
Vicas Vehicles Private Limited
18
Creelotex Engineers Private Limited
15
12. With regards to Siwana, he submitted that Ganpatraj and
five others collectively held more than 20% shares till March 31,
2016. Shareholding of Ganpatraj and Creelotex increased in
Siwana on account of separation of business post sale of starch
business and therefore, it cannot be considered as a violation.
13. Mr. Sen submitted that Stuti and Siwana formed part of
Group-B and hence, neither they are „promoters‟ nor „promoter
entities‟. In support of this contention, he relied upon the
decisions of this tribunal in Shree Kumar Bangur v. Securities
19
and Exchange Board of India , Mr. Veerendra Kumar Singh &
20
Anr. v. Securities and Exchange Board of India and the
judgment of the Hon‟ble Supreme Court of India in Agrotech Ltd.
21
v. State of U.P.
14. Mr. Sen further submitted that, shareholding of Ganpatraj,
Vicas and Creelotex in Stuti could not have had any effect on
Stuti‟s amalgamation with Vital or the delisting price because the
reverse book building process had commenced much later.
Further, shareholding of Ganpatraj‟s sister in Stuti does not
mean that Stuti is part of promoter group of Riddhi Siddhi,
because, as per the family agreement, she was in Group-B and
therefore, Stuti was never treated as a promoter group entity.
15. He further submitted that Riddhi Siddhi was in compliance
with MPS requirements from FY 2010-11 to FY 2014-15, even
after considering the shareholdings of Stuti and Siwana as
promoter group. In September 2014, pursuant to buyback, there
19
Appeal No.358 of 2019, order dated 9.11.2021
20
Appeal No.524 of 2022, order dated 19.01.2023
21
(2006) 9 SCC 203
16
was increase in shareholding of the promoter group of Riddhi
Siddhi from FY ending March 31, 2014 to FY ending March 31,
2015. Excluding Stuti and Siwana, the promoter holding
increased from 50.53% to 71.32%. Including Stuti and Siwana,
the promoter holding increased from 65.32% to 82.61%.
16. Mr. Sen submitted that Stuti and Siwana merged with
Vital. Consequently, Vital was considered as promoter
shareholder from March 6, 2018 holding 11.99% in Riddhi
Siddhi. However, SEBI has incorrectly held that Ganpatraj‟s
nephew, Mohit Bagmar was only a name lender and Vital was in
fact controlled by Ganpatraj. SEBI has arrived at this incorrect
conclusion on the premise that Ganpatraj had transferred ₹31.25
Lakhs to his sister Sayaridevi on June 20, 2017, which she had
further transferred to her son, Mohit Bagmar on the next day.
Thereafter, on June 29, 2017, Mohit acquired 50% shares of
Vital. Mr. Sen argued that Ganpatraj giving money to his sister
out of love and affection cannot be construed as having
controlling rights over Vital.
17. Mr. Sen further submitted that the WTM‟s order treats Vital
group as promoter shareholders based on the following:
Family relationship of Ganpatraj (Appellant No.2), his sister
Sayaridevi and Mohit Bagmar.
Funds were transferred from Ganpatraj to Sayaridevi.
Mohit acquired Vital.
22
Stuti, Siwana and Kauvery amalgamated with „Vital‟ in
December 2017.
22
Kauvery Trexim Private Limited
17
Acquisition of shares of Riddhi Siddhi by Vital through the
said amalgamation on March 7, 2018.
Consequently, Vital became a shareholder in Riddhi Siddhi.
Delisting offer of Riddhi Siddhi opened on March 6, 2018.
Tendering shares of Riddhi Siddhi in Reverse book building
(RBB) by Vital was immediately thereafter on March 8,
2018.
18. He submitted that Stuti, Siwana and Vital were not part of
promoter group entities because they were not part of Group-A
and therefore, they were correctly categorized as public
shareholders while considering MPS requirements as per SCR
23
Rules, 1957.
19. Mr. Rushin Kapadia, learned Advocate for the appellants in
Appeal No.619 of 2021 (Vital) adopted the main arguments of
Mr. Sen. In addition, he submitted that the bid price by Vital was
lower than the book value of Riddhi Siddhi cannot lead to an
automatic inference of fraud, particularly in the light of Riddhi
Siddhi‟s declining net worth. He submitted that SEBI has taken
the scrip price as per the book value at ₹1,600/-, whereas for
the period between 1996 and 2016, the maximum traded price
of the scrip was ₹518 per share. Therefore, SEBI‟s assessment of
share price at ₹1,600 is wholly incorrect.
20. Mr. Vyom Shah, learned Advocate for the SEBI submitted
that the family arrangement cannot disregard or override the
24
definition of „promoter group‟ in ICDR Regulations . According to
23
Securities Contract (Regulation) Rules, 1957
24
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009
18
him, following circumstances suggest that the family
arrangement was not acted upon:
Shankarlal Chowdhary was a director of Siwana between
2011 and 2013.
In June 2017, Ganpatraj transferred money to his sister
and in turn, she gave it to her son Mohit Bagmar to acquire
shares of Vital.
Stuti and Siwana hold shares of Riddhi Siddhi.
Ganpatraj, his wife, his brother Siddharth and 4 companies
(Vicas, Creelotex, Safari and Telecon) hold more than 20%
shares of Stuti and Siwana.
21. He further submitted that the appellants have made
inconsistent submissions with regard to the family arrangement.
Their submission that, Ganpatraj‟s sister (Mosami) was not
involved in family business is irrelevant, because as per ICDR
Regulations, she is an immediate relative and had continued to
be shareholder of Stuti till FY 2016-2017. He submitted that
Ganpatraj collectively held more than 20% in Riddhi Siddhi, Stuti
and Siwana. Hence, Stuti and Siwana fall within the definition of
„promoter group‟.
22. In case of Vital, he submitted that neither Sayaridevi nor
Mohit Bagmar had enough funds. The shares were purchased by
Mohit Bagmar from out of Ganpatraj‟s money.
23. He submitted that Vital became a shareholder of Riddhi
Siddhi only in December 2017. Delisting of Riddhi Siddhi was
also proposed in December 2017 itself, when the book value of
Riddhi Siddhi‟s share price was ₹1,600/-.
19
Common submissions made on behalf of the appellants in
Appeal Nos.596, 597, 598 and 600 of 2021
25
24. The appellants in these appeals submitted that they are
neither promoters of Riddhi Siddhi nor related to its promoters.
They were trading in shares of Riddhi Siddhi for several years
prior to the investigation period and also during the investigation
period. Hence, their trades cannot be treated as abnormal. They
argued that debarment imposed against them is disproportionate
and prayed for suitable modification on the ground of
26
proportionality by placing reliance on Dilip S. Pendse v. SEBI
27
and Balram Garg v. SEBI .
25. In reply, Mr. Vyom Shah submitted that there was sudden
increase in the trading of shares of Riddhi Siddhi by those
appellants during the frequently traded period (FTP). During the
FTP, more than 80% shares were traded inter se between
Noticee Nos.1, 2, 3 and Noticee Nos.14 to 33. The sudden
increase in trades during that period is not similar to the
investment made in similar scrips by these appellants. The
alleged loans transactions between the parties are not bona fide
transactions but created for the purpose of fraudulent
transactions.
25
Oswal Shares and Ors; Javerilal Oswal and Ors; Rajendrakumar Gopilal Jain
and Ors; and Ravikumar Javerilal Oswal and Ors.
26
Order dated 19.11.2009 in Appeal No.80 of 2009 by this tribunal
27
(2022) 9 SCC 425
20
Common submissions made on behalf of the appellants in
Appeal Nos.634, 635 and 636 of 2021
26. Mr. Deepak Shah, learned Advocate for the appellants
submitted that appellants are not connected to other entities
falling within the definition of „immediate relative‟. He submitted
that these appellants have been wrongly charged under Delisting
Regulations and PFUTP Regulations.
27. In reply, Mr. Vyom Shah submitted that, appellant in
Appeal No.634 of 2021 is Mr. Lalit Shah. Appellant in Appeal
No.636 of 2021 is his daughter (Sneha Lalit Shah). Appellant in
Appeal No. 635 of 2021 (Shobha Lalit Shah) is Lalit‟s wife. She is
also daughter of Shankarlal Chowdhary. Mr. Lalit Shah is
connected to appellant in Appeal No.617 of 2021 (Metroglobal
Limited) by common email id. He has admitted this connection
with promoters of Metroglobal Limited. He submitted that the
appellants have been charged with PFUTP and Delisting
Regulations because they have violated relevant provisions and
assisted the promoters of Riddhi Siddhi in fraudulently increasing
volume of trade in Riddhi Siddhi‟s shares during FTP and those
trades cannot be viewed independently or in isolation.
Appeal No.617 of 2021
28
28. Mrs. Neha Anchlia, learned Advocate for the appellant
submitted that the alleged connection with Lalit Shah or Kalpesh
Oswal does not substantiate collusion with promoters of Riddhi
Siddhi. Appellant has traded in the shares of Riddhi Siddhi since
28
Metroglobal Limited
21
2013-14. SEBI has considered only the trading volume without
establishing a link with the promoters of Riddhi Siddhi.
29. Mr. Vyom Shah replied stating that appellant has admitted
being connected to Oswal and Lalit Shah family. He had financial
relation with Kalpesh Oswal. He shared a common email id with
Lalit Shah.
30. We have carefully considered the rival contentions and
perused the records.
31. In the light of facts recorded hereinabove, following points
arise for our consideration:
i) Whether MPS norms/requirements have been
complied by Riddhi Siddhi?
ii) Whether appellants had traded fraudulently in
the scrip of Riddhi Siddhi for the purpose
reverse book building?
32. Re : (i) Whether MPS norms/requirements have been
complied by Riddhi Siddhi?
In order to decide this question, it is necessary to examine the
definition of „promoters‟ and „promoter group‟ as defined in
Regulation 2(1) of ICDR Regulations, which reads thus:
“2(1) ….
(za) “ promoter ” includes:
(i) the person or persons who are in control of the issuer;
22
(ii) the person or persons who are instrumental in the
formulation of a plan or programme pursuant to which
specified securities are offered to public;
(iii) the person or persons named in the offer document as
promoters:
Provided that a director or officer of the issuer or a person, if
acting as such merely in his professional capacity, shall not be
deemed as a promoter:
Provided further that a financial institution, scheduled bank,
foreign portfolio investor other than Category III foreign portfolio
investor and mutual fund shall not be deemed to be a promoter
merely by virtue of the fact that ten per cent or more of the equity
share capital of the issuer is held by such person;
Provided further that such financial institution, scheduled bank
and foreign portfolio investor other than Category III foreign
portfolio investor shall be treated as promoter for the subsidiaries
or companies promoted by them or for the mutual fund sponsored
by them;
(zb) “ promoter group ” includes:
(i) the promoter;
(ii) an immediate relative of the promoter (i.e., any spouse of
that person, or any parent, brother, sister or child of the
person or of the spouse); and
(iii) in case promoter is a body corporate:
(A) a subsidiary or holding company of such body
corporate;
(B) any body corporate in which the promoter holds ten
per cent or more of the equity share capital or which
holds ten per cent or more of the equity share capital of
the promoter;
(C) any body corporate in which a group of individuals or
companies or combinations thereof which hold twenty
per cent or more of the equity share capital in that body
corporate also holds twenty per cent or more of the
equity share capital of the issuer; and
(iv) xxx ……………………………………………………”
23
33. According to the SEBI, the promoter shareholders having
more than 20% in Riddhi Siddhi also held more than 20% in
Stuti and Siwana as described in Table Nos.4 and 6 in the
impugned order, which read as follows.
Table No.4
Common Group of Individuals or Company holdings in Riddhi Siddhi(RSGBL) and
Stuti FY 2014-15
RSGBL Stuti
Sr. No. Name of Individual/
Company
No. of
shares
% No. of
shares
%
1 Ganatraj Chowdhary 5,20,010 7.29 400 5.88
2 Vicas Vehicles Pvt. Ltd. 10,21,943 14.3 400 5.88
3 Creelotex Engineers Pvt.
Ltd.
11,05,748 15.5 600 8.82
Total 26,47,701 37.1 1,400 20.58
Table No.6
Common Group of Individuals or Company holdings in Riddhi Siddhi(RSGBL) and
Siwana as on March 31,2015
RSGBL Siwana
Sr.
No.
Name of Individual/
Company
No. of
shares
% No. of
shares
%
1 Rajuldevi Ganpatraj
Choudhary
3,98,620 5.59 350 2.56
2 Safari Biotech Pvt. Ltd. 2,00,000 2.8 150 1.10
3 Telecon Infotech Pvt. Ltd. 2,00,000 2.8 50 0.37
4 Ganatraj Chowdhary 5,20,010 7.29 400 2.93
5 Vicas Vehicles Pvt. Ltd. 10,21,943 14.32 625 4.58
6 Creelotex Engineers P
Ltd.
11,05,748 15.49 200 1.46
7 Siddharth Chowdhary 20,000 0.28 1,300 9.52
Total 34,66,321 48.57 3,075 22.52
34. As described in Table No.4 above, Ganpatraj, Vicas and
Creelotex held 20.58%. Appellants‟ specific case is, there was a
family arrangement in 1992-93 between Ganpatraj, his brothers
and sisters. The family members were divided into two groups,
Group-A and Group-B. Shankarlal, Sampatraj and Ganpatraj
belonged to Group-A and their brother Babulal Chowdhary and
sisters, Saiyaridevi and Mosami belonged to Group-B. As per the
family arrangement, the members belonging to Group-A were
24
permitted to invest in Group-B entities, whereas members of
Group-B were not permitted to invest in Group-A, except to hold
the investments already in place.
35. As per Table No.4, for FY 2014-15 Ganpatraj, Creelotex
and Vicas held 20.58% in Stuti and 37.1% in Riddhi Siddhi.
Similarly in Siwana shareholding pattern is as per Table No.6
above. It was argued by the appellants that Stuti and Siwana
are entities belonging to Group-B and as per the family
arrangement, Group-B was not permitted to invest in Group-A. It
was further contended that the family arrangement argument
has not been rejected by the learned WTM by recording a
categorical finding. According to the appellants, Ganpatraj and
his two brothers could invest in Group-B companies and
members of Group-B were not permitted to invest in Group-A. A
careful perusal of Table No.4 clearly shows that three promoters
(Ganpatraj, Vicas and Creelotex) collectively held 37.1% in
Riddhi Siddhi and 20.58% in Stuti. Table No.6 shows that the
promoter group mentioned therein held 48.57% in Riddhi Siddhi
and the same group held 22.52% in Siwana. These figures are
not in dispute. But, the argument canvassed is, there was a
family arrangement by which the members were divided into two
groups and further, Stuti and Siwana belonged to Group-B. With
regard to Ganpatraj Chowdhary‟s investment in those two
Companies, it was sought to be justified that he belonged to
Group-A and Group-A members were permitted to invest in
Group-B. In substance, the argument was Stuti and Siwana
belonged to a separate group, Group-B in the family and
therefore, Ganpatraj, his wife, Rajuldevi and brother, Siddharth,
25
who belonged to Group-A could not be considered as the
„promoter group‟ of Stuti and Siwana.
36. We are dealing with the shareholding in listed Companies.
Listing and delisting of companies takes place strictly in
accordance with the relevant applicable provisions of law. As per
Regulation 2(1)(zb)(ii) of ICDR Regulations, brother and sister
belonged to „promoter group‟. Appellants‟ case is, Stuti and
Siwana belonged to Group-B. Group-B consists of Ganpatraj‟s
brother Babulal and his both sisters, Mosami and Sayaridevi. As
per Regulation 2(1)(zb)(iii)(C) of ICDR Regulations, a body
corporate which holds 20% or more of equity share in that body
and also holds 20% or more of equity share of the issuer then,
such body corporate shall fall within the definition of a „promoter
group‟. In the instant case, Ganpatraj, Vicas and Creelotex
collectively hold 20.58% in Stuti and 37.1% in Riddhi Siddhi.
Similarly, promoter group entities hold 22.52% in Siwana and
48.57% in Riddhi Siddhi. As noted hereinabove, for the FY
ending March 31, 2015, the promoter holding in Riddhi Siddhi
including Stuti and Siwana was 82.61%. This is certainly more
than the prescribed 75%. Rule 19A(2) of Securities Contracts
(Regulations) Rules, 1957, prescribes that where a public
shareholding in a listed company falls below 25% at any time,
such company shall bring the public shareholding to 25% within
a maximum period of 12 months from the date of such fall in the
manner specified by the SEBI. In view of the public shareholding
having fallen below 75%, we hold that Riddhi Siddhi did not
comply with the MPS norms during the period of FY 2014-15 and
2015-16.
26
37. Admittedly, Stuti, Siwana along with Kauvery
amalgamated with Vital. It is relevant to note that the delisting
offer opened on March 6, 2018. The shares of Riddhi Siddhi were
acquired by Vital on March 7, 2018 and they were tendered on
the very next day i.e. March 8, 2018. After amalgamation, Vital
held 11.99% shares in Riddhi Siddhi and the other promoters
held 74.82% shares as on March 31, 2018. According to SEBI,
Vital also falls within the promoter group. On the other hand,
appellants‟ contention is that Vital is controlled by Mohit Bagmar,
son of Sayaridevi. He does not fall within the definition of
„promoter group‟ under Regulation 2(1)(zb)(ii) of ICDR
Regulations. It was argued on behalf of SEBI that Mohit Bagmar
controlled Vital only on paper. To substantiate this contention,
Mr. Vyom Shah urged that Ganpatraj had transferred ₹31.25
Lakhs to his sister on June 20, 2017 and she in turn transferred
it to her son, Mohit Bagmar, on the next day. Mohit Bagmar
acquired Vital on June 29, 2017. According to him, this exercise
was undertaken to exclude Vital from the promoter group of
Riddhi Siddhi. On the other hand, appellants contended that
Ganpatraj had gifted the said amount to his sister and there was
nothing unnatural about it. While rejecting their contention, the
WTM has recorded thus:
“ 50.1. Large amount of fund is transferred in Sister’s account by
Ganpatraj, which is subsequent transferred to Mohit’s
account.
50.2. No other such gifts amount from Ganpatraj were
observed before or after the above transferred amount.
27
50.3. The amount transferred by Ganpatraj in Sister’s account
matches almost exactly to amount for payment of
acquisition of Vital.
50.4. Timing of amount transferred to Sister’s account almost
matches with timing of acquisition of Vital.
50.5. Mohit further submitted that he was not aware of the source
of money which was gifted by Sayaridevi to him. In
this regard, considering the son-mother relationship
of Mohit and Sayaridevi and frequent bank transactions
among themselves, it is highly improbable to believe that
Mohit was not aware of source of Rs. 31,25,000/- received
by Sayaridevi, which was transferred to him for the
acquisition of Vital, when balance in Sayaridevi account
were otherwise less.”
38. Applying the principles of preponderance of probability, we
are of the view that Vital was controlled by Ganpatraj through
his sister‟s son, Mohit Bagmar. Therefore, Vital falls within the
„promoter group‟ entity. The promoter shareholding for FY ending
March 31, 2018, in Riddhi Siddhi was 74.82%. If 11.99%
shareholding of Vital is considered, the public shareholding falls
below 25%, which violates MPS norms. Accordingly, we hold that
MPS norms were not complied with by Riddhi Siddhi and answer
the first point for consideration in the negative .
39. Re : (ii) Whether appellants had traded fraudulently
in the scrip of Riddhi Siddhi for the purpose of reverse
book building?
SEBI‟s case is, Riddhi siddhi was an „illiquid scrip‟. The book
value of its share was ₹1,600/-. In order to project the scrip as
„liquid scrip‟, the promoters and connected entities traded into
the scrip, which had reached a floor price of ₹510/- and this
trading was fraudulent.
28
40. The WTM has recorded that the liquidity of Riddhi Siddhi‟s
scrip during the period one-year prior to delisting offer was low.
Noticee Nos.1 to 3 and 14 to 33 had traded as connected group.
Approximately 83% of their trading in Riddhi Siddhi during that
period were amongst themselves. Table No.16 of the impugned
order shows that Creelotex (Noticee No.3) had traded 5,90,808
shares with Ganpatraj (Noticee No.1) and Ganpatraj HUF
(Noticee No.2). The traded quantity of Noticee Nos.14 to 33 was
1,15,627 shares. These figures are not in dispute.
41. The total number of equity shares of Riddhi Siddhi was
71,36,386. In order to qualify the shares as frequently traded,
the trading turnover should be 10% of the total shares and in
this case 7,13,639. The WTM has also recorded that the total
gross „buy‟ shares was 8,50,669 and total „sell‟ shares was
8,59,545. It is further recorded that the total quantity traded
amongst Noticee Nos.1 to 3 and 14 to 33 was 7,06,435. As
noted hereinabove, Creelotex alone accounts for trading of
5,90,808 shares. Even if the trades of alleged connected parties
are excluded, considering the inter se transaction between
Creelotex and Ganpatraj of 5,90,808 shares, the minimum
requirement of trade turnover of 10% of total number of shares
is not satisfied.
42. So far as inter se connections are concerned, the WTM has
prepared a detailed chart with the mode of connections. The
following are the connections pertaining to the appellants:
29
Sr. No. Appeal No. Filed by Connection:
1. 588 of
2021
1) Riddhi Siddhi Gluco
Mukeshkumar R Samdaria:
He was CFO of Riddhi Siddhi for FY 2016
- 17 and 2017 - 18.
Analysed account number 4311450288
with Kotak Mahindra Bank for 01/01/16 to
30/09/18.
Received Rs.1,79,61,200 from Creelotex
Engineers Private Limited (Creelotex) a
promoter of RSGBL, on 29/03/17. Of which
Rs.1,00,00,000 were transferred to Ravi J
Oswal on 03/04/17. Further, on 30/03/17
Rs.65,25,000 were transferred to Narendra
Gatmal Jain who in FY 2016 - 17 has bought
1150 shares of Stuti Trademart Private
Limited.
2. 596 of
2021
Biols Limited,
2) Ganpatraj Lalchand
Chowdhary,
3) Siddharth G Chowdhary,
4) Creelotex Engineers
Private Limited
5) Ganpatraj Chowdhary
HUF and
6) Mukeshkumar R
Samdaria
1) Oswal Shares and
Oswal Shares and Securities Limited :
Kalpesh Oswal, Vanita Kalpesh Oswal,
Tankidevi Javerilal Oswal, Javerilal Gopilal
Oswal and Ravi Oswal were its directors
during Investigation Period.
Address same as that of Javerilal Gopilal
Jain HUF
On 22/03/17 Ravikumar Javerilal Oswal
received Rs. 25 lacs from Riddhi Siddhi
through Kauvery Trexim Private Limited.
Which was transferred to Oswal Shares and
Securities Limited.
On 03/04/17 Ravikumar Javerilal Oswal
received Rs.100 lacs from Mukesh R
Samdaria and transferred same to Oswal
Shares and Securities Limited
On 07/04/2017 Akshita Rajendra Shah
received Rs.50 lacs from Kavery Trexim
Private Limited and transferred the same to
Oswal Share and Securities Limited on
10/04/17.
Javerilal Gopilal Oswal:
Father of Ravi Oswal and Kalpesh Oswal.
Received Rs.14 lacs in HDFC Bank
account number 50200017489104 from
Kauvery Trexim Private Limited through
Ravi Oswal.
Kalpesh Javerilal Oswal :
Following fund transaction were observed
from HDFC Bank account number
50200017105833 of Kalpesh Oswal:
on 14/09/17, transferred Rs.50 lacs to
Metroglobal Limited
on 21/09/17, transferred Rs.50 lacs to
Metroglobal Limited
on 06/10/17, transferred, Rs.50 lacs to
Securities Limited,
2) Javerilal Gopilal Oswal
3) Kalpesh Javerilal Oswal
30
Metroglobal Limited
on 23/03/17 received Rs. 10 lacs from Ravi
Oswal
3. 597 of
2021
1) Javerilal Oswal
Javerilal Oswal Commodities Pvt. Ltd.:
Kalpesh Oswal, Vanita Kalpesh
Oswal, Tankidevi Javerilal Oswal, Javerilal
Gopilal Oswal and Ravi Oswal were its
directors during Investigation Period
Javerilal Gopilal Jain HUF:
Address same as that of Oswal Shares and
Securities Limited. HUF of Mr. Javerilal
Gopilal Jain/Oswal.
Tankidevi Javerilal Oswal:
Wife of Javerilal Oswal and mother of
Ravi Oswal and Kalpesh Oswal
Vanita Kalpesh Oswal:
Wife of Kalpesh Oswal
Kalpana Javerilal Oswal:
Daughter of Mr. Javerilal Oswal and
sister of Ravi and Kalpesh Oswal
Kavita Javerilal Oswal:
Daughter of Mr. Javerilal Oswal and
sister of Ravi and Kalpesh Oswal
4. 598 of
2021
Commodities Pvt. Ltd.,
2) Javerilal Gopilal Jain
HUF,
3) Tankidevi Javerilal
Oswal,
4) Vanita Kalpesh Oswal,
5) Kalpana Javerilal Oswal
6) Kavita Javerilal Oswal
1) Rajendrakumar Gopilal
Ravikumar Javerilal Oswal:
Analyzed account number 0061330018544
with HDFC Bank, and follows observed.
On 22/03/17 received Rs.25 lacs from
Riddhi Siddhi through Kauvery Trexim
Private Limited, which was transferred to
Oswal Shares and Securities Limited.
On 23/03/17 received Rs.25 lacs from
Kauvery Trexim Private Limited of which
Rs.14 lacs and Rs.10 lacs were transferred to
Javerilal Oswal and Kalpesh Oswal.
On 03/04/17 received Rs.100 lacs from
Mukesh R Samdaria and transferred same to
Oswal Shares and Securities Limited.
Akshay Rajendrabhai Oswal:
On 28/02/2017 received Rs.25 lacs
Kauvery Trexim Private Limited
On 16/03/2017 received Rs.25 lacs from
Kauvery Trexim Private Limited
On 17/05/2017 received Rs.30 lacs from
Kauvery Trexim Private Limited
Akshita Rajendra Shah:
Analyzed account number 002405020678
Jain,
2) Akshay Rajendrabhai
Oswal
3) Akshita Rajendra Shah
31
with ICICI Bank for the period 01/01/16 to
30/09/18
On 07/04/2017 received Rs.50 lacs from
Kavery Trexim Private Limited and
transferred the same to Oswal Share and
Securities Limited on 10/04/17.
5. 600 of
2021
1) Ravikumar Javerilal
Ravikumar Javerilal Oswal:
Analyzed account number 00061330018544
with HDFC Bank, and follows observed:
On 22/03/17 received Rs.25 lacs from
RSGBL through Kauvery Trexim Private
Limited which was transferred to Oswal
Shares and Securities Limited.
On 23/03/17 received Rs.25 lacs from
Kauvery Trexim Private Limited of which
Rs.14 lacs and Rs.10 lacs were transferred to
Javerilal Oswal and Kalpesh Oswal.
On 03/04/17 received Rs. 100 lacs from
Mukesh R Samdaria and transferred same to
Oswal Shares and Securities Limited.
Monika Dharmendra Abbani:
Wife of Ravi Oswal
Sangeeta Dinesh Abbani:
Has common address with Monika Abbani
w/o Ravi Oswal.
Has common phone numbers 22423410,
9820231018 and
9898142340 with Monika abbani w/o Ravi
Oswal
Has common email id
[email protected] with
Monika Abbani w/o Ravi Oswal
6. 617 of
2021
Oswal,
2) Monika Dharmendra
Abbani
3) Sangeeta Dinesh Abbani
Metroglobal Limited
Kalpesh Oswal had paid Rs. 150 lacs (3
installments of Rs.50 lacs each) in
September and October 2017.
Has common email id :
[email protected] with Lalitkumar R
Shah
7. 619 of
2021
Mohit bagmar is Ganpatraj’s nephew
Saiyaridevi is Ganpatraj’s sister
Vital is owned by Mohit Bagmar.
1) M/s. Vital Connections
LLP(earlier Vital
Connections Private
Limited),
2) Mr. Mohit Bagmar
3) Sayaridevi Bagmar
Lalitkumar Ranmal HUF
Mr. Lalitkumar Ranmal Shah is connected
to Metroglobal Limited through email id:
[email protected]
(HDFC account number 00608420023362).
8. 634 of
2021
32
Have admitted connection with promoters
of Metroglobal Limited in statement
recording dated February 05, 2019.
Son-in- law of Mr. Shankarlal L
Chowdhary (brother of Mr. Ganpatraj
Chowdhary
9. 635 of
2021
Shobha Lalitkumar Shah Daughter of Mr. Shankarlal L Chowdhary
(brother of Mr. Ganpatraj Chowdhary).
Wife of Lalitkumar Ranmal Shah
Has common email id :
[email protected] (HDFC account
number 08881000000213)
10. 636 of
2021
Sneha Lalitkumar Shah
Daughter of Shobha L Shah and
Lalitkumar R Shah
43. Appellants‟ case is, the connections shown in the above
chart are not relevant and do not conclusively prove that the
appellants had traded in order to project the scrip as „liquid‟
scrip. A careful analysis of the above chart shows that the
respective parties were connected. The trades in Table No.15 of
the impugned order concerning Noticee Nos.14 to 33 and Table
No.16 concerning Creelotex and Ganpatraj have not been
disputed. Once the connections are admitted, in a case of this
nature, by applying the principle of preponderance of probability,
it is reasonable to infer that a genuine investor is normally not
interested in trading in illiquid scrips. The fact that these
connected persons have traded in the illiquid scrip coupled with
the fact that they are connected, fortifies SEBI‟s theory that
there was an attempt to project the scrip as a „liquid scrip‟ to
avoid violation at ₹1600/- per share. Therefore, we find no error
in the findings recorded by the WTM with regard to the factual
matrix of the case and hold that the Noticee Nos.1 to 3 and 14 to
33 indulged in illegal trades in order to project Riddhi Siddhi‟s
33
share as a „liquid‟ scrip. Accordingly, we answer the second point
for consideration in the affirmative.
44. As an alternative prayer, appellants have urged to
consider the proportionality aspect and to reduce a quantum of
penalty and the period of debarment. Keeping in view the fact
that Table No.16, which record trading of 5,90,808 shares
between Creelotex and Ganpatraj, we find no merit in the
alternative submission. So far as the remaining Noticee Nos.14-
33 are concerned, the noticee wise trading was minimum 50
shares and maximum is 16,990. Keeping the quantity of traded
shares in mind and also the fact that the delisting has not taken
place, concession can be shown to the appellants who fall within
Noticee Nos.14 to 33.
45. In the result, the following:
ORDER
i) Appeal No.543 of 2021 is dismissed .
ii) Appeal No.588 of 2021 is allowed in part. The direction
contained in para 131.1.3 of the impugned order is
modified and the period of debarment is reduced to six
months qua the appellants.
iii) Appeal Nos.596, 597, 598, 600, 617, 619 634, 635 and
636 of 2021 are allowed in part. The direction contained
in para 131.2 of the impugned order is modified to the
extent of period of debarment qua the appellants as under:
34
Sr.
No.
Appeal No. Name of Entities Period of
debarment
1. 588 of
2021
Riddhi Siddhi Gluco
Biols Limited
6 months from
the date of
compliance of
MPS norms.
2. 588 of
2021
Ganpatraj Lalchand
Chowdhary
6 months from
the date of
compliance of
MPS norms.
3. 588 of
2021
Siddharth G
Chowdhary
6 months from
the date of
compliance of
MPS norms.
4. 588 of
2021
Creelotex Engineers
Private Limited
6 months from
the date of this
order.
5. 588 of
2021
Ganpatraj
Chowdhary HUF
6 months from
the date of this
order.
6. 588 of
2021
Mukeshkumar R
Samdaria
6 months from
the date of this
order.
7. 619 of
2021
Vital Connections
Private Limited
6 months from
the date of this
order.
8. 619 of
2021
Mohit Bagmar 6 months from
the date of this
order.
9. 619 of
2021
Sayaridevi Bagmar 6 months from
the date of this
order.
10. 596 of
2021
Oswal Shares and
Securities Limited
3 months from
the date of this
order.
11. 596 of
2021
Javerilal Gopilal
Oswal
3 months from
the date of this
order.
12. 596 of
2021
Kalpesh Javerilal
Oswal
3 months from
the date of this
order.
13. 597 of
2021
Javerilal Oswal
Commodities Pvt Ltd
3 months from
the date of this
order.
35
14. 597 of
2021
Javerilal Gopilal Jain
HUF
3 months from
the date of this
order.
15. 597 of
2021
Tankidevi Javerilal
Oswal
3 months from
the date of this
order.
16. 597 of
2021
Vanita Kalpesh Oswal 3 months from
the date of this
order.
17. 597 of
2021
Kalpana Javerilal
Oswal
3 months from
the date of this
order.
18. 597 of
2021
Kavita Javerilal
Oswal
3 months from
the date of this
order.
19. 598 of
2021
Rajendrakumar
Gopilal Jain
3 months from
the date of this
order.
20. 598 of
2021
Akshay Rajendrabhai
Oswal
3 months from
the date of this
order.
21. 598 of
2021
Akshita Rajendra
Shah
3 months from
the date of this
order.
22. 600 of
2021
Ravikumar Javerilal
Oswal
3 months from
the date of this
order.
23. 600 of
2021
Monika Dharmendra
Abbani
3 months from
the date of this
order.
24. 600 of
2021
Sangeeta Dinesh
Abbani
3 months from
the date of this
order.
25. 617 of
2021
Metroglobal Limited 3 months from
the date of this
order.
26. 634 of
2021
Lalitkumar Ranmal
HUF
3 months from
the date of this
order.
27. 635 of
2021
Shobha Lalitkumar
Shah
3 months from
the date of this
order.
28. 636 of
Sneha Lalitkumar
Shah
3 months from
the date of this
order.
2021
36
iv) Remaining portion of WTM‟s order dated August 11, 2021
is undisturbed.
v) Pending interlocutory application(s), if any, stand disposed
of.
vi) No costs.
Justice P.S. Dinesh Kumar
Presiding Officer
Ms. Meera Swarup
Technical Member
Dr. Dheeraj Bhatnagar
Technical Member
09.03.2026
RHN
RAJAL
AKSHM
I H
NAIR
Digitally signed
by
RAJALAKSHMI
H NAIR
Date:
2026.03.09
15:12:54
+05'30'