BEFORE THE ADJUDICATING OFFICER

SECURITIES AND EXCHANGE BOARD OF INDIA

(ADJUDICATION ORDER NO: AO /SBM-ASR/EAD-3 /6/2015)

______________________________________________________________
UNDER SECTION 15 - I OF THE SECURITIES AND EXCHANGE BOARD OF
INDIA ACT, 1992 READ WITH RULE 5 OF THE SECURITIES AND EXCHANGE
BOARD OF INDIA (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING
PENALTIES BY ADJUDICATING OFFICER) RULES, 1995.
In respect of:
Heatshrink Technologies Limited
PAN: AAACR2591J
Plot No: 112, 13th Road,
MIDC, Andheri (East),
Mumbai - 400093,
______________________________________________________________

FACTS OF THE CASE IN BRIEF:

1. Securities and Exchange Board of India (hereinafter referred to as SEBI)
observed that Heatshrink Technologies Limited (hereinafter referred to as 'the
Noticee / the Company") had not redressed two investor complaints pending
against it for more than two years in the SEBI Complaints Redress System
(hereinafter referred to as SCORES). The Noticee was earlier known as REPL
Engineering Limited and is listed on the Bombay Stock Exchange (BSE).
APPOINTMENT OF ADJUDICATING OFFICER:
2. Vide Order dated May 21, 2013, Shri D. Ravikumar was appointed as Adjudicating
Officer under Section 15-I of the Securities and Exchange Board of India Act 1992
(hereinafter known as 'SEBI Act') read with Rule 3 of the SEBI (Procedure for
Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995
(hereinafter referred to as Adjudication Rules) to inquire into and adjudge under
the provisions of Section 15C of the SEBI Act for the alleged failure on the part of
the Noticee to redress the two investor complaints pending against it in SCORES.
Consequent to the transfer of Shri D. Ravikumar, I have been appointed as the
Adjudicating Officer vide Order dated June 22, 2015.

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SHOW CAUSE NOTICE, REPLY AND PERSONAL HEARING:

3. A Show Cause Notice dated July 30, 2013 (hereinafter referred to as SCN) was
issued to the Noticee in terms of the provisions of Rule 4 (1) of the Adjudication
Rules to show cause as to why an inquiry should not be held against the Noticee
and penalty be not imposed under the provisions of Section 15 C of the SEBI Act
for the failure on the part of the Noticee to redress the two pending investor
complaints, as alleged in the SCN. The SCN was delivered on the Noticee on
August 6, 2013. The gist of the allegations leveled against the Noticee in the SCN
are mentioned as under :
(a) Vide letter dated January 22, 2013 issued to the Noticee, SEBI had observed
that seven investor complaints were pending against the Noticee in SCORES. It
was also mentioned in the said letter that SEBI may initiate action against the
Noticee under the provisions of Sections 15C and 24 of the SEBI Act, in case
they fail to redress the pending complaints.
(b) SEBI vide letter dated February 15, 2013 once again advised the Noticee to
redress the seven investor complaints pending against it in the SCORES and
submit the Action Taken Report through SCORES, at the earliest, failing which
it was mentioned that SEBI would initiate appropriate Regulatory Actions
against the Noticee, which includes debarring them from securities market and
/or imposing penalty. It was also mentioned in the SCN that the Noticee had
failed to resolve the pending investor complaints, failed to reply to the aforesaid
letters dated January 22, 2013 & February 15, 2013 and also failed to submit
the Action Taken Report, as required.
(c) It was also mentioned in the SCN that as on May 24, 2013, two investor
complaints were pending to be resolved by the Noticee and these two
complaints were pending for more than two years in SCORES and the Noticee
had not approached SEBI for obtaining the SCORES authentication.
(d) In view of the above, it was alleged in the SCN that the Noticee had failed to
redress the two investor complaints, which was pending against it in the
SCORES for more than two years and therefore, has resulted in the violation of
the provisions of Section 15C of the SEBI Act by the Noticee. The relevant
provisions of Section 15C of the SEBI Act are extracted below :

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Penalty for failure to redress investors grievances

15C. If any listed company or any person who is registered as an intermediary, after
having been called upon by the Board in writing, to redress the grievances of investors,
fails to redress such grievances within the time specified by the Board, such company or
intermediary shall be liable to a penalty of one lakh rupees for each day during which
such failure continues or one crore rupees, whichever is less.
4. Vide letter dated August 16, 2013, Noticee filed a reply to the SCN. The Noticee in
their reply inter alia submitted as follows :

(a) In respect of the complaint of Ms. Madhu Natrajan (hereinafter referred to as

'Ms. Natarajan'), the required documents pertaining to her complaint were
delivered by Ms Natrajan to the Liquidator's office, which were subsequently
collected by the company and processed. With regard to the complaint of Shri
Janesh Shankarbhai Panchal (hereinafter referred to as ' Shri Panchal'), it was
mentioned by the Noticee that Shri Panchal had failed to respond to the letters
issued to him by the Noticee seeking certain details/information pertaining to his
complaint.
(b) The Company is going through very difficult financial situation and it has
become a sick industrial company under clause (o) of sub-section (1) of Sick
Industrial Companies Act, 1985. Further, pursuant to the Order dated June 21,
2002 of the Hon'ble Bombay High Court, the receiver appointed by the Honble
Bombay High Court continues to be in possession of all the moveable and
immovable properties of the Noticee and also the fact that they have been
assisting the Court Receiver to run the business on a monthly royalty.

(c) The Noticee stated that they received the SCORES authentication and have
also submitted the requisite Action Taken Report (hereinafter referred to as
"ATR") regarding the two complaints.

(d) As on February 28, 2012, there were two complaints pending against it i.e the
Complaints received from Ms Natrajan and Shri Panchal, as aforesaid.

(e) They have taken all possible steps to redress the two pending complaints and
therefore, requested that no penalty may be imposed on them.

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5. In the interest of natural justice and in order to conduct an inquiry in terms of Rule
4 (3) of the Adjudication Rules, the Noticee was granted an opportunity of personal
hearing on April 23, 2014 vide letter dated April 11, 2014. The said letter dated
April 11, 2014 was also served on the Noticee, which is evident from the postal
records. However, no reply was received from the Noticee in response to the
aforesaid hearing notice. Pursuant to the appointment of the undersigned as the
Adjudicating Officer, another opportunity of hearing was granted to the Noticee on
July 23, 2015 vide letter dated July 10, 2015. The above said letter dated July 10,
2015 was served on the Noticee on July 16, 2015, as per the postal records and
confirmation. Since there was no response from the Noticee, a final opportunity of
hearing was granted to the Noticee on August 07, 2015 vide letter dated July 27,
2015.
6. In response to the hearing notice dated July 27, 2015, the Noticee vide its letter
dated August 06, 2015 submitted that Shri C. S. Tamanekar will represent the
Noticee and will also appear for the personal hearing in the matter. Shri C.S.
Tamanekar (hereinafter Authorised Representative ) appeared before me on
August 7, 2015 and reiterated the submissions made by the Noticee vide its letter
dated August 16, 2013. During the course of the hearing, the Authorised
Representative submitted a letter dated August 6, 2015 on behalf of the Noticee
and further mentioned that they will submit additional reply in the said matter within
a period of seven working days. The salient points of the submissions made by the
Noticee vide their letter dated August 6, 2015 are as follows:
(a) The complainant Shri Panchal has not responded to any of the letters issued to
him by the Noticee seeking certain details/information about his complaint.
(b) The company is going through a difficult financial situation and the losses have
exceeded the company's net worth. Pursuant to the Honble Bombay High Court
Order dated June 21, 2002, a Court Receiver has been appointed by the
Honble Bombay High Court and the Court Receiver continues to be in
possession of all the moveable and immovable properties of the company.
Company continues as their agent to run the business on a monthly royalty.
(c) The company has been de-listed due to non-compliance with the provisions of
the Listing Agreement.

7. Pursuant to the hearing, the Noticee vide their letter dated August 10, 2015 made
additional submissions and inter alia stated as under:
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(a) With respect to the complaint of Shri Panchal, they sent a letter dated February
26, 2013 to the complainant and sought the details of the shares that he had
purportedly sent to the company for transfer, including postal confirmation etc.
As there was no response from the complainant, it was mentioned that three
more letters were sent to the complainant by the Noticee. Letters dated April 05,
2013, June 27, 2013 and August 09, 2013 were sent to the complainant in this
regard. The Noticee mentioned that they did not receive any response from the
complainant to the letters addressed to him. In view of the lack of response on
the part of the Complainant, the Noticee mentioned that they were not in a
position to process his complaint.

The Noticee provided copies of all the

aforesaid correspondences that were sent to the complainant in this regard and
also a copy of the postal confirmation of the letter dated February 26, 2013.

(b) With respect to the complaint of Ms. Natarajan, which was relating to nonreceipt of share certificates purportedly sent by her to the Noticee for correction,
the Noticee submitted that vide its letter dated February 26, 2013 addressed to
the complainant, the Noticee drew attention of the complainant to an email
dated June 18, 2010 wherein they had sought to know from the complainant the
details of the shares dispatched by her to the company. The Noticee enclosed
copies of the emails exchanged between them and the complainant in this
regard during the year 2010. Thereafter, vide letter dated August 09, 2013,
Noticee mentioned that the corrected share certificates were sent to the
complainant and the complaint was also resolved. The Noticee provided copies
of the emails that were exchanged between them and the complainant during
the year 2010 and also copies of other letters addressed to the Complainant by
them in this regard.

(c) The shares of the Noticee were de-listed form the BSE since 1999-2000 due to
non - payment of listing fees and non- compliance with the provisions of the
Listing Agreement by the Noticee. The share price of the Noticee was last
quoted in September 2001.

(d) The company is under liquidation and was referred to BIFR.

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CONSIDERATION OF ISSUES AND FINDINGS:

8. I have carefully considered the submissions made by the Noticee oral and
written. I have also examined the Action History mentioned in the relevant ATRs
relating to the complaints of Ms Natrajan and Shri Panchal against the Noticee.
9. I note that by letters dated January 22, 2013 and February 15, 2013, SEBI had
called upon the Noticee to redress the seven pending complaints received against
it. Further, as on March 13, 2013, I also note that the concerned department of
SEBI (OIAE) has confirmed that there were two complaints pending against the
Noticee in SCORES and these two complaints were pending for more than two
years. I therefore note that the proceedings have been initiated against the
Noticee for their failure to redress the two pending complaints i.e the complaints
received from Ms Natrajan and Shri Panchal, as aforesaid.
10. I observe that vide Circular no CIR/OIAE/1/2012 dated August 13, 2012, all the
companies whose securities were listed on stock exchanges were advised by
SEBI to obtain the SCORES authentication by September 14, 2012, failing which it
was mentioned that appropriate enforcement action would be initiated against the
defaulting companies. The above said Circular was followed by a press
advertisement issued by SEBI on October 6, 2012 wherein all the Listed
Companies were advised to obtain the SCORES authentication within seven days
of the date of the said advertisement. I find that OIAE in their communication dated
November 1, 2013 has confirmed that the Noticee has obtained the SCORES
authentication on June 18, 2012. In fact, I also observe that the Noticee has
obtained the SCORES authentication even before the initiation of the proceedings
against it. I, therefore, observe that the Noticee has complied with the above said
SEBI circular / instructions. The Noticee has also submitted the ATR through
SCORES informing the steps taken by them regarding the two complaints
received against it.
11. I observe that the complaint received from Shri Panchal of Vadodara was
regarding non - receipt of shares after transfer and the complaint of Ms Natrajan,
Dubai was relating to non-receipt of shares after conversion/endorsement/
consolidation/splitting. These two complaints were shown as pending against the
Noticee for more than two years in SCORES.

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12. I note from the material made available before me that the Noticee has made
conscious efforts to redress the complaint of Shri Panchal. In this connection, it is
very pertinent to note that the Noticee had sent as many as four letters to Shri
Panchal seeking details/information from him regarding the share certificates
purportedly sent by him to the Noticees address along with supporting records like
the postal confirmation etc. The Noticee had sought these details from Shri
Panchal as it appears that they had not received the share certificates purportedly
dispatched to their address by Shri Panchal. I find that Shri Panchal has not
responded to any of these letters that were sent to his address by the Noticee. If
Shri Panchal was genuinely aggrieved, he would have at least responded to the
letters issued to him by the Noticee. Therefore, in view of the steps taken by the
Noticee, as aforesaid, I am of the view that the Noticee cannot be faulted for the
lack of response or interest shown by Shri Panchal in the said matter of his
complaint made against the Noticee. Thus, the allegation leveled against the
Noticee that they have failed to take necessary steps to redress the grievance of
Shri Panchal is unsustainable.
13. With regard to the complaint of Ms Natrajan against the Noticee, I find that Ms
Natrajan had sent 6 share certificates representing 95 shares to the Noticee in the
year 2010 for effecting necessary correction in the second holders name in the
share certificates. However, it appears that these share certificates were not
received by the Noticee. I find from the emails dated February 24, 2010 and June
18, 2010 addressed to Ms Natrajan by the Noticee that they had sought to know
from her the details of the share certificates sent by her along with the postal
acknowledgement / confirmation of the dispatch etc. However, instead of
responding to the Noticee and furnishing the details sought by them, Ms Natrajan
filed a complaint against the Noticee with SEBI on December 10, 2010.
14. I further note from an email dated March 05, 2013 addressed to Ms Natrajan by
the Noticee that they have informed her about the fact that the share certificates
dispatched by her were actually delivered to the Liquidator's office by the postal
department instead of delivering it to the Companys address. It was also
mentioned by the Noticee in the above said mail that they were taking necessary
steps to obtain the share certificates from the Liquidator's office and also ensuring
to redress the complaint as early as possible. I find that on August 9, 2013, the
Noticee dispatched the corrected share certificates to Ms Natarajan by Speed Post
and the complaint of Ms Natrajan was also treated as closed. The concerned
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department of SEBI (OIAE) in their communication dated November 1, 2013 also

confirmed that the complaint of Ms Natrajan has been resolved as on August 9,
2013.
15. I find that the Noticee has made concerted efforts to resolve the complaint of Ms.
Natarajan. It is relevant to mention that conscious efforts were made by the
Noticee to contact Ms Natrajan in the year 2010 itself when the complaint was
made by her against the Noticee. Since the share certificates dispatched by Ms
Natrajan were not received by the Noticee, they had sought to know from Ms
Natrajan the details of the share certificates that were dispatched by her and also
the postal confirmation / records relating to the dispatch. These details were
required by the Noticee to enable them to track the documents. Subsequently, on
the basis of follow up made by the Noticee, it came to light that the share
certificates were not delivered to the Noticee's address and instead they were
delivered at the Liquidators address by the postal authorities. The same was also
confirmed by the Noticee to Ms Natrajan in their email sent to her on March 5,
2013. It is very likely that these documents, when delivered at the wrong address,
get misplaced with other documents and retrieval of the same would also be
difficult. The Noticee cannot be blamed if the share certificates were delivered to
the wrong address. I observe that the Noticee took steps to retrieve these
certificates and also took prompt action thereafter to send the corrected share
certificates to Ms Natrajan. Thus, in light of the totality of the facts and
circumstances of the case, it is difficult to conclude that the Noticee had failed to
resolve the complaint of Ms Natrajan.

16. Therefore, in light of the above observations against the Noticee, the allegations
leveled against the Noticee in respect of their failure to redress the two pending
complaints received from Shri Panchal and Ms Natrajan is not tenable. I am,
therefore, of the opinion that it would be inappropriate to impose any penalty on
the Noticee.

ORDER:

17. In view of the foregoing, considering the facts and circumstances of the case , the
material on record, both oral and written submissions made by the Noticee and
also other relevant material made available on record, the alleged violation of the

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provisions of Section 15C of the SEBI Act, 1992 by the Noticee do not stand
established and the matter is accordingly disposed of.
18. In terms of the provisions of Rule 6 of the Adjudication Rules, a copy of this order
is being sent to the Noticee viz. Heatshrink Technologies Limited and also to the
Securities and Exchange Board of India.

Place: Chennai
Date: 30.09.2015

SURESH B. MENON
ADJUDICATING OFFICER

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