Appellant Rightly Penalised for Continued Non-compliances w.r.t. Appointment of Women Director & CS | SAT

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Appointment of Women Director

Case Details: Shree Pushkar Chemicals & Fertilisers Ltd. v. National Stock Exchange of India Ltd. - [2023] 153 taxmann.com 398 (SAT-Mumbai)

Judiciary and Counsel Details

    • Justice Tarun Agarwala, Presiding Officer & Ms Meera Swarup, Technical Member
    • Amit Jaste, PCS & Karan Varma, Adv. for the Appellant.
    • Pradeep Sancheti, Sr. Adv., Rashid Boatwalla, Ms Samiksha Rajput & Sagar Divekar, Advs. for the Respondent.

Facts of the Case

In the instant case, the appellant company being in the list of top 1000/2000 listed companies was required to appoint an independent woman director by 1-4-2020 as per Regulation 17(1)(a) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. Further, it was required to appoint a Company Secretary as a compliance officer.

However, it appointed an independent woman director on 10-11-2020 and a company secretary on 10-10-2020. Accordingly, penalties and fines were imposed for non-compliance for the quarters ending 30-6-2020, 30-9-2020 and the quarter ending 31-12-2020 by BSE and NSE.

The appellant applied for a waiver of fines, contending that in view of the Covid pandemic and lockdown declared in March 2020, there was a nationwide closure of all the industries and it was not possible to comply with Regulation 17(1) and Regulation 6 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

It was observed that the appellant had given sufficient explanation and justification for the waiver of fines for non-compliance of Regulation 17(1)(a) and Regulation 6 within the prescribed period. Further, it was observed that the imposition of a fine by two Stock Exchanges for the quarters ending 30-6-2020 and 30-9-2020 could not be sustained.

SAT Held

The SAT held that since the situation had eased, the appellant should have taken care to appoint a woman director and a company secretary at the earliest and the appellant having not done so, respondents were entitled to impose a fine for the quarter ending 31-12-2020.

List of Cases Referred to

    • Shekhawati Poly-Yarn Ltd. v. National Stock Exchange of India Ltd. [Appeal no. 432 of 2021 dated 13-7-2022] (para 16)
    • Kesar Petroproducts Ltd. v. Bombay Stock Exchange [Appeal no. 432 of 2022, dated 10-8-2022] (para 16).

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