Lawstreet Journal

SEBI has to be Heard by Courts in Compounding Offences- Supreme Court

Lawstreet Journal 13 Jul 2021 6:19pm

Image courtesy: Lawstreet Journal Judiciary SEBI has to be Heard by Courts in Compounding Offences- Supreme Court

The Supreme Court on Wednesday (July 7, 2021) observed that the Securities Exchange Board of India (SEBI) is the custodian of the investors’ interest and importance needs to be accorded to its consent in compounding offenses. 

“The SEBI is not a regular complainant, it is the custodian of the investor’s interests, it is a regulatory body. Great importance must be accorded to SEBI in compounding offenses. But to lift it to a point where without its consent, there can be no compounding and where the SEBI can veto any compounding, I have my doubts,” expressed Justice D Y Chandrachud. 

A Bench of Justice D Y Chandrachud and Justice MR Shah was hearing a Special Leave Criminal Appeal arising out of the impugned order dated 1st April 2019, of the Delhi High Court. The said order declined the petitioner’s application under Section 24A of the Securities and Exchange Board of India (SEBI) Act of 1992. The petitioner was alleged to have artificially jerked the prices of the share of his company and when he applied for compounding of the offence under Section 24A of the SEBI Act, the Trial Court rejected his application on the ground that the respondent SEBI had refused to give their consent for compounding. [Prakash Gupta v. Securities and Exchange Board of India]

The Trial Court relied on the Supreme Court’s decision in JIK Industries Limited and Others v. Amarlal V. Jumani and Another [(2013) 3 SCC 255] where the court held that obtaining the consent… Continue Reading...


Tagged: Securities and Exchange Board of India (SEBI)   SEBI  
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