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Section11B
The Securities and Exchange Board of India Act, 1992

Power to issue directions and levy penalty

In force From 30 Jan 1992 Act 15 of 1992 As on 15 Oct 2026

Act 15 of 1992 Ministry Finance Enacted 04 Apr 1992 In force 30 Jan 1992 Cited by 5 provisions Instruments 7

Section 11B of the Securities and Exchange Board of India Act, 1992 deals with power to issue directions and levy penalty. Save as otherwise provided in section 11, if after making or causing to be made an enquiry, the Board is satisfied that it is necessary-- (i) in the interest of investors, or orderly development of securities market; The Act came into force on 30 Jan 1992.

1[11B. Power to issue directions 2[and a levy penalty].-- Save as otherwise provided in section 11, if after making or causing to be made an enquiry, the Board is satisfied that it is necessary--

(i) in the interest of investors, or orderly development of securities market; or

(ii) to prevent the affairs of any intermediary or other persons referred to in section 12 being conducted in a manner detrimental to the interests of investors or securities market; or

(iii) to secure the proper management of any such intermediary or person, it may issue such directions--

(a) to any person or class of persons referred to in section 12, or associated with the securities market; or

(b) to any company in respect of matters specified in section 11A,

as may be appropriate in the interests of investors in securities and the securities market.

3[Explanation.---For the removal of doubts, it is hereby declared that the power to issue directions under this section shall include and always be deemed to have been included the power to direct any person, who made profit or averted loss by indulging in any transaction or activity in contravention of the provisions of this Act or regulations made thereunder, to disgorge an amount equivalent to the wrongful gain made or loss averted by such contravention.]

1[(2) Without prejudice to the provisions contained in sub-section (1), sub-section (4A) of section 11 and section 15-I, the Board may, by an order, for reasons to be recorded in writing, levy penalty under sections 15A, 15B, 15C, 15D, 15E, 15EA, 15EB, 15F, 15G, 15H, 15HA and 15HB after holding an inquiry in the prescribed manner.]

Section 11B, The Securities and Exchange Board of India Act, 1992 (Act 15 of 1992).

Cross-references

Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.

This section refers to

  1. s. 11 Functions of Board
  2. s. 11A Board to regulate or prohibit issue of prospectus, offer document or advertisement soliciting money for issue of securities
  3. s. 12 Registration of stock-brokers, sub-brokers, share transfer agents, etc
  4. s. 15 Accounts and audit
  5. s. 15A Penalty for failure to furnish information, return, etc
  6. s. 15B Penalty for failure by any person to enter into agreement with clients
  7. s. 15C Penalty for failure to redress investors‟ grievances
  8. s. 15D Penalty for certain defaults in case of mutual funds
  9. s. 15E Penalty for failure to observe rules and regulations by an asset management company
  10. s. 15EA Penalty for default in case of alternative investment funds, infrastructure investment trusts and real estate investment trusts
  11. s. 15EB Penalty for default in case of investment adviser and research analyst
  12. s. 15F Penalty for default in case of stock brokers
  13. s. 15G Penalty for insider trading
  14. s. 15H Penalty for non-disclosure of acquisition of shares and takeovers
  15. s. 15HA Penalty for fraudulent and unfair trade practices
  16. s. 15HB Penalty for contravention where no separate penalty has been provided

Referred to by 5

  1. Companies Act s. 24 Power of Securities and Exchange Board to regulate issue and transfer of securities, etc
  2. s. 11 Functions of Board
  3. s. 15J Factors to be taken into account while adjudging quantum of penalty
  4. s. 15JB Settlement of administrative and civil proceedings
  5. s. 28A Recovery of amounts

Related judgements & precedents

These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.

  1. SEBI v. Ram Kishori Gupta

    Supreme Court of India 07 Apr 2025 Binding (Supreme Court) Reportable Civil Appeal 7941/2019 & connected (SC) Judgement of Main Case 07.04.2025

    Court's Decision & Legal Precedent

    Judgement of Main Case order-12.pdf body signed April 7, 2025 (Sanjay Kumar & K.V. Viswanathan JJ.). Cache DATE-CHECK FP on 2005 SCN/fact dates; body is named CA 7941/2019 Vital Communications / s.11 & 11B directions-disgorgement judgment. Holds SEBI s.11/11B powers are subject to res judicata/constructive res judicata; belated disgorgement reopenings barred; SAT cost awards against SEBI set aside in part.

    On this section: s.11B power to issue directions and levy penalty/disgorgement — belated disgorgement barred by constructive res judicata; SAT cost awards against SEBI trimmed.

    Read the full order on eCourts India

  2. Securities & Exchange Board of India vs Ajay Agarwal

    Supreme Court of India 25 Feb 2010 Binding (SC) - as a Supreme Court judgment on interpretation of SEBI Act and con Reportable

    Court's Decision & Legal Precedent

    Procedural provisions of law, including Section 11-B and Section 11(4)(b) of the SEBI Act, can be applied retrospectively to alleged misconduct occurring prior to the enactment of such amendments, because: (1) procedural laws apply to all actions, pending and future, and no person has a vested right in any course of procedure; (2) such application does not violate Article 20(1) of the Constitution as the respondent has not been charged with an 'offence' or subjected to a 'penalty' in the criminal law sense, but has merely been restrained from certain activities by an administrative order; (3) even if viewed as operating prospectively, the actual exercise of power by the SEBI Chairman on 31 March 2004 was lawful as the amendments were then in force; and (4) the respondent's receipt of adequate notice through the show cause notice invoking Section 11-B and fair hearing opportunity negates any procedural unfairness.

    On this section: Amendment of 1995 empowering Board to issue directions in interest of investors and orderly development of securities market; Central issue of whether this can apply to pre-1995 conduct

    Read the full order on eCourts India

The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.

Judgments citing this section

These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.

  1. Supreme Court of India 01 Apr 2025 SCIN010004152007

    … The Supreme Court upheld the view of the High Court and rejected the contention of the complainant-appellant. (xi) In the case of Ajay Agarwal (supra), a two-judge Bench of this Court while dealing with the provisions of Section 11B of the Securities and Exchange Board of India Act, 1992[56]( page-77-0), which was inserted in 1995 held that this provision was procedural in nature and could be applied retrospectively. It was of the view that for any law which affects matters of procedure, the same would apply to all actions, pending as well as …

    Read this order on eCourtsIndia

Made under this section, and citing it

7 instruments name this provision in its title or its text without being made under it.

All subordinate legislation

Questions about Section 11B

What have the courts held on Section 11B of the Securities and Exchange Board of India Act?

SEBI v. Ram Kishori Gupta (07 Apr 2025) is the leading judgment on this section among those set out below: s.11B power to issue directions and levy penalty/disgorgement — belated disgorgement barred by constructive res judicata; SAT cost awards against SEBI trimmed. Another 1 judgment on this section is set out below, all of them from the Supreme Court. They run from 2010 to 2025.

How do I find court cases under Section 11B of the Securities and Exchange Board of India Act?

In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Sebi Act 11B, section 11B Sebi Act, section 11B of the Securities and Exchange Board of India Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 2 reported judgments on this section are set out on this page, beginning with SEBI v. Ram Kishori Gupta (07 Apr 2025).

What should I read with Section 11B of the Securities and Exchange Board of India Act, and has it changed?

Its own text turns on section 11 (Functions of Board), section 11A (Board to regulate or prohibit issue of prospectus, offer document or advertisement soliciting money for issue of securities), section 12 (Registration of stock-brokers, sub-brokers, share transfer agents, etc), section 15 (Accounts and audit), and on 12 further provisions, so none of them can safely be read on its own. 5 other provisions in this corpus refer back to it. 7 instruments name it without being made under it, most recently Securities and Exchange Board of India (Annual Report) Rules, 2021 (2021), then SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 Last amended on December 31, 2018 (2018).

When did Section 11B of the Securities and Exchange Board of India Act come into force?

Section 11B of the Securities and Exchange Board of India Act, cited as Sebi Act 11B, came into force on 30 Jan 1992, having been enacted on 04 Apr 1992. It is in force as at the date shown on this page.

Other sections of this Act

Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.