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Siddharth Chaturvedi v. Securities and Exchange Board of India

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 14730 of 2015)Decided 14 Mar 2016
Civil Appeal No. 14730 of 2015
Justice Kurian Joseph · Justice Rohinton Fali Nariman

Background

This is a referral order, not a final judgment. SEBI's Adjudicating Officer imposed penalties of Rs. 5 lakh, Rs. 7 lakh and Rs. 11 lakh on three appellants for a technical violation of insider trading disclosure regulations. The Securities Appellate Tribunal upheld the penalties. The appeals turned on how Section 15A and Section 15J of the SEBI Act work together.

Decision Breakdown

This is a referral order, not a final judgment. By its order of 14 March 2016, the Court disagreed in part with an earlier Division Bench ruling in SEBI v. Roofit Industries and found difficulty with both readings in that precedent. It held that the matters deserved consideration by a larger Bench and directed the Registry to place the papers before the Chief Justice of India for that purpose. The interim orders already passed by the Court were to continue to operate.

Lesson Learnt

There is no final ruling yet on whether SEBI's discretion in fixing penalties under Section 15A, as amended in 2002, is constrained by the factors in Section 15J. The appellants' own penalties remain undecided.

Official source (sci.gov.in)View Judgment (PDF)

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