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1 - 10 of 22 (0.27 seconds)The Securities and Exchange Board of India Act, 1992
Section 11 in The Securities and Exchange Board of India Act, 1992 [Entire Act]
Section 7 in The Securities and Exchange Board of India Act, 1992 [Entire Act]
Section 15A in The Securities and Exchange Board of India Act, 1992 [Entire Act]
Securities & Exchange Board Of India vs Kishore R.Ajmera on 23 February, 2016
43. Reference to the Securities and Exchange Board of
India vs. Rakhi Trading (P) Ltd.5 which refers to an earlier
decision in the Securities and Exchange Board of India
vs. Kishore R. Ajmera6 is misconceived, for the said
decisions do not hold that a broker cannot be proceeded
against for violation of Regulation 7 of the SEBI (Stock
Brokers and SubBrokers) Regulations, 1992 (“Stock Broker
Regulations” for short) for violation of Clause A(2) of the
Code of Conduct for Stock Brokers. The decisions hold that
a broker would not be liable merely because he had
facilitated the transactions, in the absence of any material to
5 (2018) 13 SCC 753 (paragraph 40)
6 (2016) 6 SCC 368
36
suggest negligence and connivance on the part of the broker.
Siddharth Chaturvedi vs Securities And Exchange Board Of India on 14 March, 2016
7. Reference Order in Siddharth Chaturvedi & Ors.
(supra) on the said aspect has observed that Section 15A(a)
could apply even to technical defaults of small amounts and,
therefore, prescription of minimum mandatory penalty of
Rs.1 lakh per day subject to maximum of Rs.1 crore, would
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make the Section completely disproportionate and arbitrary
so as to invade and violate fundamental rights. Insertion of
the Explanation would reflect that the legislative intent, in
spite of the use of the expression “whichever is less” in
Section 15A(a) as it existed during the period 29 th October
2002 till 7th September 2014, was not to curtail the
discretion of the Adjudicating Officer by prescribing a
minimum mandatory penalty of not less than Rs. 1 lakh per
day till compliance was made, notwithstanding the fact that
the default was technical, no loss was caused to the
investor(s) and no disproportionate gain or unfair advantage
was made. The legislative intent is also clear as Section
15A(a) was amended by the Amendment Act No.27 of 2014
to state that the penalty could extend to Rs. 1 lakh for each
day during which the failure continues subject to a
maximum penalty of Rs. 1 crore. This amendment in 2014
was not retrospective and therefore, clarificatory and
removal of doubt Explanation to Section 15J was added by
the Act No. 7 of 2017. Normally the expression “whichever is
less” would connote absence of discretion by prescribing the
minimum mandatory penalty, but in the context of Section
10
15A(a) as it was between 29 th October,2002 till 7th
September, 2014, read along with Explanation to Section
15J added by Act No.7 of 2017, we would hold the
legislative intent was not to prescribe minimum mandatory
penalty of Rs.1 lakh per day during which the default and
failure had continued. We would prefer read and interpret
Section 15A(a) as it was between 25th October, 2002 and 7th
September, 2014 in line with the Amendment Act 27 of 2014
as giving discretion to the Adjudicating Officer to impose
minimum penalty of Rs.1 lakh subject to maximum penalty
of Rs.1 crore, keeping in view the period of default as well as
aggravating and mitigating circumstances including those
specified in Section 15J of the SEBI Act.