Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control
Section 12A of the Securities and Exchange Board of India Act, 1992 deals with prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control. No person shall directly or indirectly-- (a) use or employ, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recognised stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of this Act or the rules The Act came into force on 30 Jan 1992.
1[12A. Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control.-- No person shall directly or indirectly--
(a) use or employ, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recognised stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of this Act or the rules or the regulations made thereunder;
(b) employ any device, scheme or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stock exchange;
(c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stock exchange, in contravention of the provisions of this Act or the rules or the regulations made thereunder;
(d) engage in insider trading;
(e) deal in securities while in possession of material or non-public information or communicate such material or non-public information to any other person, in a manner which is in contravention of the provisions of this Act or the rules or the regulations made thereunder;
(f) acquire control of any company or securities more than the percentage of equity share capital of a company whose securities are listed or proposed to be listed on a recognised stock exchange in contravention of the regulations made under this Act.]
Section 12A, The Securities and Exchange Board of India Act, 1992 (Act 15 of 1992).
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.
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Balram Garg v. Securities and Exchange Board of India
Court's Decision & Legal Precedent
Judgement of Main Case order-8.pdf 2022-04-19 (not same-date ROP order-7). CA 7054/2021. SEBI Act s.12A insider-trading prohibition and s.15G penalty: UPSI plus a connected person is not enough; the charge needs a foundation that the accused was an insider who traded on that UPSI. Circumstantial suspicion (relative traded) does not substitute for that proof. Map sebi-act 12A and 15G.
On this section: s.12A prohibition of insider trading / manipulative devices: UPSI plus a connected person is not enough; the charge needs a foundation that the accused was an insider who traded on that UPSI. A relative's trade is not a substitute (Balram Garg).
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Quantum Global Securities and Leasing Company LTD vs Securities and Exchange Board of India
Court's Decision & Legal Precedent
The conditions stipulated in clauses (a), (b) and (c) of Section 15J of the SEBI Act are illustrative in nature and not exhaustive. The Adjudicating Officer has discretion to consider other circumstances beyond those enumerated in Section 15J while determining the quantum of penalty under Sections 15A to 15HA. The power and discretion vested by Section 15J is not eclipsed by the penalty provisions in Sections 15A to 15HA, and the Explanation to Section 15J added by Act No. 7 of 2017 clarifies that the Adjudicating Officer shall have deemed to have always exercised this discretion in determining penalties. These provisions must be read harmoniously to avoid conflict and inconsistency.
On this section: Violations related to fraudulent and unfair trade practices in securities market
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Magnum Equity Broking LTD vs Securities and Exchange Board of India
Court's Decision & Legal Precedent
The conditions stipulated in clauses (a), (b), and (c) of Section 15J of the SEBI Act, 1992 are illustrative in nature and not exhaustive. The Adjudicating Officer has discretion to consider circumstances beyond those enumerated in Section 15J while determining penalty quantum under Sections 15A to 15HA. Section 15J was never eclipsed by amendments to Sections 15A-15HA, and the Explanation added by Act No. 7 of 2017 clarified this legislative intent. The power to impose "such penalty as he thinks fit" under Section 15I(2) supports this discretionary approach. However, the imposition of penalty itself depends on satisfaction of substantive provisions in Sections 15A-15HA, not on satisfaction of Section 15J conditions.
On this section: SEBI's power to regulate intermediaries and regulate sales and transfers of securities; applied in context of synchronized trading violations.
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.
Made under this section, and citing it
1 instrument states that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
Another 2 instruments name this provision in its title or its text without being made under it.
Questions about Section 12A
What have the courts held on Section 12A of the Securities and Exchange Board of India Act?
Balram Garg v. Securities and Exchange Board of India (19 Apr 2022) is the leading judgment on this section among those set out below: s.12A prohibition of insider trading / manipulative devices: UPSI plus a connected person is not enough; the charge needs a foundation that the accused was an insider who traded on that UPSI. A relative's trade is not a substitute (Balram Garg). Another 2 judgments on this section are set out below, all of them from the Supreme Court. They run from 2019 to 2022.
How do I find court cases under Section 12A 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 12A, section 12A Sebi Act, section 12A of the Securities and Exchange Board of India Act. People searching for it also type section 12a of the securities and exchange board of india act 1992. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 3 reported judgments on this section are set out on this page, beginning with Balram Garg v. Securities and Exchange Board of India (19 Apr 2022).
What should I read with Section 12A of the Securities and Exchange Board of India Act, and has it changed?
The rules and notifications made under it are where it actually bites, and there is one: most recently SEBI (Prohibition of Insider Trading) Regulations, 2015 (Last amended on January 21, 2019) (2019).
When did Section 12A of the Securities and Exchange Board of India Act come into force?
Section 12A of the Securities and Exchange Board of India Act, cited as Sebi Act 12A, 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
- 11. Functions of Board1315 words
- 11C. Investigation1145 words
- 12. Registration of stock-brokers, sub-brokers, share transfer agents, etc678 words
- 28A. Recovery of amounts629 words
- 15U. Procedure and powers of the Securities Appellate Tribunal494 words
- 15D. Penalty for certain defaults in case of mutual funds464 words
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 14 Oct 2026. This page is not a substitute for legal advice.