TABLE OF CONTENTS :

FACTS OF THE CASE IN BRIEF.

1. APPOINTMENT OF ADJUDICATING OFFICER

2. SHOW CAUSE NOTICE, REPLY AND PERSONAL

HEARING

ORDER

ANALYSIS

3. Background

4. Key Allegations

Conclusion

SUMMERY

FACTS OF THE CASE IN BRIEF.

Securities and Exchange Board of India (hereinafter referred to as, “SEBI”) vide
Circular No. CIR/OIAE/2/2011 dated June 03, 2011, directed all listed companies to obtain
SEBI Complaints Redressal System (hereinafter referred to as, “SCORES”) authentication
and also redress any pending investor grievances in that platform only. Subsequently, SEBI
also vide Circulars No CIR/OIAE/1/2012 dated August 13, 2012, No. CIR/OIAE/1/2013
dated April 17, 2013 and No CIR/OIAE/1/2014 dated December 18, 2014, (hereinafter
referred to as, “SEBI circulars”) inter alia directed all companies whose securities were listed
on Stock Exchanges to obtain SCORES authentication within a period of 30 days from the
date of issue of this circular and also to redress the pending investor grievances within the
stipulated time period.

t was alleged that Usha India Limited (hereinafter referred to as, “Noticee/Company”) had
failed to obtain the SCORES authentication and to redress investor grievances pending
therein within the timelines stipulated by SEBI, therefore not complying with the aforesaid
SEBI Circulars.

1.APPOINTMENT OF ADJUDICATING OFFICER

The undersigned was appointed as the Adjudicating Officer(AO) vide order dated
December 24, 2019, conveyed vide communique dated December 26, 2019 under Section 19
read with Section 15-I of Securities and Exchange Board of India, 1992 (hereinafter referred
to as, “SEBI Act”) and under Rule 3 of SEBI (Procedure for Holding Inquiry and Imposing
Penalties) Rules, 1995 (hereinafter referred to as, “Rules”) to enquire into and adjudge under
Section 15C and 15HB of the SEBI Act, for the aforementioned alleged violations by the
Noticee. Earlier, the case was assigned to AO Shri Vijayant Kumar Verma, Shri Sahil Malik
and Shri V. S. Sundaresan. I therefore proceed in the matter from where it had been left by
the previous Adjudicating Officer.

2. SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING

A Show Cause Notice dated August 11, 2017 (hereinafter referred to as, “SCN”) was
issued by the erstwhile Adjudicating Officer to the Noticee under Rule 4 of the Rules, calling
it to show cause as to why an inquiry should not be held against it in terms of Rule 4 of the
Rules, read with Section 15-I of SEBI Act and penalty be not imposed on it under Section
15C and 15HB of the SEBI Act for allegedly failing to obtain the SCORES authentication
and to redress investor grievances pending therein within the timelines stipulated by SEBI
respectively but the SCN returned undelivered. A Hearing Notice dated November 28, 2017
was also issued to the Noticee, however the same also returned undelivered. Thereafter,
Public Notice vide newspaper publication dated December 26, 2017 was issued in English
and Hindi Edition for the undelivered SCN in terms of Rule 7(d) of the Rules.

In response to the newspaper advertisement, the Noticee vide its letter dated January 01,
2018 stated that its correspondence address was – Village Gujartola, Raebareilly Amethi
Road, Gauriganj, Dist. Sultanpur, UP, and requested for the SCN to be sent to its aforesaid
address. Accordingly, vide letter dated January 12, 2018, copy of the SCN was forwarded to
the Noticee. Subsequently, the Noticee vide its letter dated February 01, 2018 requested for
copy of the investor complaint to understand the nature of the complaint and take suitable
action. Vide letter dated March 14, 2018, SEBI informed the Noticee that SCORES
authentication has not been taken by it and further, physical copy of the pending investor
complaints (27 Nos.) were forwarded to the Noticee. From the available records, it is noted
that no response to the same was received from the Noticee.

Pursuant to the appointment of the undersigned as AO, an opportunity of personal

hearing was granted to the Noticee on January 24, 2020. However the Noticee did not appear
for the said hearing. Subsequently, vide letter dated February 17, 2020, the Noticee
submitted a reply in the matter, and the main contentions made therein is reproduced.

ORDER

After taking into consideration all the facts and circumstances of the case, I impose a
penalty of Rs. 1,00,000/- (Rupees One Lakh Only) under Section 15HB of the SEBI Act and
Rs. 1,00,000/- (Rupees One Lakh Only) under section 15C of the SEBI Act, i.e. penalties
totalling to Rs. 2,00,000/- (Rupees Two Lakh Only) on the Noticee viz. Usha India Limited,
which will be commensurate with its noncompliances. 21. The Noticee shall remit / pay the
said amount of penalty within 45 days of receipt of this order either by way of Demand Draft
in favour of “SEBI - Penalties Remittable to Government of India”, payable at Mumbai, OR
through online payment facility available on the website of SEBI, i.e. www.sebi.gov.in on the
following path, by clicking on the payment link
ANALYSIS

Background,

1. SEBI's Mandate: SEBI introduced the SCORES (SEBI Complaints Redressal

System) to facilitate the redressal of investor grievances against listed companies.
Companies were required to obtain SCORES authentication and address pending
grievances within specified timelines.
2. Compliance Requirements: Usha India Limited was mandated to obtain SCORES
authentication by September 14, 2012, and to resolve any pending investor
complaints.
3.

Key Allegations

1. Failure to Obtain Authentication: UIL did not obtain the necessary SCORES
authentication despite repeated reminders from SEBI.
2. Non-Redressal of Grievances: At the time of the Show Cause Notice (SCN), 27
investor grievances were pending, with issues ranging from non-receipt of dividends
to problems with share transfers.

Proceedings

1. Show Cause Notice (SCN): An SCN was issued to UIL in August 2017 but returned
undelivered, prompting a public notice. Eventually, the SCN was sent to the
company’s correct address.
2. Response and Defence: UIL claimed it was defunct since 2007 and that its records
had been lost or stolen. The directors asserted they had no knowledge of the alleged
non-compliances.
3. Hearing: UIL failed to appear for a personal hearing scheduled for January 2020. The
company's reply to the proceedings emphasized their inability to act due to lack of
records and asserted their intention to cooperate.

Findings
 1. Non-Compliance Established: The adjudicating officer found that UIL had indeed
failed to obtain SCORES authentication and had not redressed the investor grievances
as required by SEBI regulations.
2. Responsibility of Listed Companies: The adjudicator emphasized that being a listed
company imposes a duty to address shareholder concerns, irrespective of the
company’s operational status.
3. Impact on Investor Confidence: The ongoing non-redressal of grievances
undermines investor confidence and violates SEBI’s mandate to protect investor
interests.

Penalties Imposed

1. Total Penalty: UIL was fined ₹2,00,000, comprising ₹1,00,000 for each violation
under Sections 15C and 15HB of the SEBI Act.
2. Payment Instructions: The penalty must be paid within 45 days, with specified
payment methods and subsequent reporting to SEBI.

Conclusion

 Implications for UIL: This case highlights the serious repercussions of non-
compliance with regulatory requirements for listed companies, particularly regarding
investor grievance mechanisms.
 Investor Protection: The enforcement action reinforces SEBI's commitment to
ensuring that companies address investor grievances effectively, thereby upholding
market integrity.
 Broader Impact: The case serves as a reminder to other companies about the
importance of maintaining compliance with regulatory standards, as failure to do so
can lead to financial penalties and reputational damage.
 In the case against Usha India Limited illustrates the critical nature of compliance in
maintaining investor trust and the regulatory framework that governs listed companies
in India.


Index of Authorities

Securities and Exchange Board of India (SEBI)

  Adjudicating Officer (AO) G Ramar, appointed to conduct the inquiry and impose
penalties for non-compliance.

Legal Provisions

 Section 15C: Pertains to penalties for failure to redress investor grievances.

 Section 15HB: Covers penalties for non-compliance with SEBI directions.
 Section 15J: Outlines factors to be considered while adjudging quantum of penalties.

Securities Appellate Tribunal (SAT)

 Referenced in relation to the Port Shipping Company Ltd. case, affirming penalties
for non-compliance with SCORES authentication.

Local Police

 Mentioned in context of theft and loss of company records.

Summary of the Case:

The Securities and Exchange Board of India (SEBI) issued several circulars between 2011
and 2014, requiring all listed companies to:

1. Obtain authentication for the SEBI Complaints Redressal System (SCORES).

2. Address any pending investor complaints within specific timelines.

Usha India Limited allegedly failed to comply with these requirements.

Key Events:

 Appointment of Adjudicating Officer: An Adjudicating Officer (AO) was

appointed on December 24, 2019, to investigate these alleged violations.
 Show Cause Notice (SCN): The previous AO issued an SCN to Usha India Limited
on August 11, 2017, but it was returned undelivered. A hearing notice in November
2017 also went undelivered.
 Public Notice: To address the undelivered SCN, a public notice was published in
December 2017, allowing the company to respond.
  Company’s Response: In January 2018, Usha India Limited provided a correct
address and requested the SCN. SEBI sent the SCN and details of 27 investor
complaints to the company, but there was no response.
 Hearing Opportunity: The new AO offered a personal hearing on January 24, 2020,
but the company did not attend. They later submitted a reply on February 17, 2020,
outlining their main points.

References,

SCC online,

AIR ( All India Reporter)

Indian Kanoon.