Penalty for non-disclosure of acquisition of shares and takeovers
Section 15H of the Securities and Exchange Board of India Act, 1992 deals with penalty for non-disclosure of acquisition of shares and takeovers. disclosure of acquisition of shares and takeovers.-- If any person, who is required under this Act or any rules or regulations made thereunder, fails to (i) disclose the aggregate of his share holding in the body corporate before he acquires any shares of that body corporate; The Act came into force on 30 Jan 1992.
1[15H. Penalty for non-disclosure of acquisition of shares and takeovers.-- If any person, who is required under this Act or any rules or regulations made thereunder, fails to
(i) disclose the aggregate of his share holding in the body corporate before he acquires any shares of that body corporate; or
(ii) make a public announcement to acquire shares at a minimum price;
2[(iii) make a public offer by sending letter of offer to the shareholders of the concerned company; or
(iv) make payment of consideration to the shareholders who sold their shares pursuant to letter of offer],
he shall be liable to a penalty 3[which shall not be less than ten lakh rupees but which may extend to twenty-five crore rupees or three times the amount of profits made out of such failure, whichever is higher].
Section 15H, 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.
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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SEBI v. Sunil Krishna Khaitan & Ors. (with SEBI v. Madhuri S. Patti & Ors.)
Court's Decision & Legal Precedent
DATE VERIFIED Judgment 2022-07-11 (order-30.pdf; Sanjiv Khanna & Bela M. Trivedi JJ.; order index Judgement of Main Case 2022-07-11; common judgment with tagged C.A. 1762/2014 Madhuri S. Patti). Core teaching on s.15H: (i) s.15H is somewhat a strict-liability Chapter VI-A civil penalty for failure to disclose aggregate shareholding / make public announcement / make public offer / pay consideration (cls.(i)–(iv)), distinct from discretionary Reg.44 directions under Takeover Regulations 1997 (use of “may”); (ii) SAT under s.15T cannot, for the first time, initiate or impose monetary penalty under s.15H when the Board never invoked s.15H AO adjudication and no AO 15H order is under appeal — SAT is an appellate forum, not the authority empowered to commence 15H penalty proceedings or suo motu issue ss.11/11B directions; (iii) SAT’s appellate power is confined to examining correctness/legality of the order under challenge (confirm/set aside/modify/substitute the Reg.44 direction), not converting Reg.44 open-offer directions into a fresh s.15H penalty. SEBI appeals dismissed with that 15T/15H clarification. Also interprets Reg.10 acquirer+PAC collective holdings. Teaching lock for empty §15H.
On this section: s.15H Penalty for non-disclosure of acquisition of shares and takeovers — Chapter VI-A monetary penalty for takeover/disclosure defaults is a distinct strict-liability track from Reg.44 directions; only the AO/Board may initiate s.15H; SAT cannot invent a first-instance 15H penalty on a Reg.44 appeal.
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Kosha Investments Ltd. v. SEBI (with C.A. No. 2132 of 2007)
Court's Decision & Legal Precedent
DATE VERIFIED REPORTABLE Judgment 2015-09-18 (order-13.pdf on main CNR SCIN010228972005 / C.A. 3219/2006; Vikramajit Sen & Shiva Kirti Singh JJ.; order index Judgment of Main Case 2015-09-18; companion C.A. 2132/2007 SCIN010056312007 tagged). Acquirer already holding 15%–55% who acquires additional shares entitling >5% voting rights in a financial year must make Reg.11(1) public announcement; Reg.14(1) triggers announcement not later than four working days of the agreement/decision to acquire — netting simultaneous sales to stay under 5% year-end is rejected (would defeat Reg.11(1) and render Reg.14(1) otiose). Swedish Match cited for mandatory character of Regs.10–12. Appeals dismissed with costs. Teaching for s.15H: the public-announcement obligation whose breach attracts Chapter VI-A s.15H(ii) penalty (failure to make public announcement to acquire shares) is triggered by gross creeping acquisition >5%, not by year-end net holding. (MCP may flag embedded 2004/2005 SEBI/SAT dates inside the factual narrative — disregarded; index Judgment date 2015-09-18 controls.)
On this section: s.15H(ii) Penalty for failure to make a public announcement to acquire shares — Reg.11(1) creeping-acquisition public-announcement duty (gross >5% in a FY; no sale-netting escape) is the takeover obligation whose breach is the classic s.15H non-disclosure/public-announcement contravention.
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Swedish Match AB & Anr. v. SEBI & Anr.
Court's Decision & Legal Precedent
DATE VERIFIED Judgment 2004-08-25 (order-7.pdf; N. Santosh Hegde, S.B. Sinha & A.K. Mathur JJ.; body DATE OF JUDGMENT: 25/08/2004 matches order index Judgment of Main Case 2004-08-25). Classic takeover-code judgment on Regs.10–12 public-announcement / open-offer obligations (held mandatory). On s.15H specifically: Chapter VIA s.15H is the monetary-penalty provision for non-disclosure of acquisition of shares and takeovers, expressly including failure to make a public announcement to acquire shares at a minimum price as required under the Act/rules/regulations; Board’s Reg.44 direction track and s.15H AO penalty track are separate and distinct; s.24 criminal prosecution is a further track. Court discusses that (then) s.15H penalty quantum left little AO discretion once triggered. Appeals allowed in part with Art.142 direction that Board forbear from continuing the pending s.15H adjudication against appellants (case-specific; not a precedent on extinguishing 15H). Teaching lock: s.15H is the statutory civil-penalty hook for takeover public-announcement / disclosure failures.
On this section: s.15H Penalty for non-disclosure of acquisition of shares and takeovers — failure to make the Regulation 10/11 public announcement to acquire shares at a minimum price is a s.15H contravention; monetary penalty under 15H is a distinct remedy from Reg.44 directions and s.24 prosecution.
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.
Questions about Section 15H
What have the courts held on Section 15H of the Securities and Exchange Board of India Act?
SEBI v. Sunil Krishna Khaitan & Ors. (with SEBI v. Madhuri S. Patti & Ors.) (11 Jul 2022) is the leading judgment on this section among those set out below: s.15H Penalty for non-disclosure of acquisition of shares and takeovers — Chapter VI-A monetary penalty for takeover/disclosure defaults is a distinct strict-liability track from Reg.44 directions; only the AO/Board may initiate s.15H; SAT cannot invent a first-instance 15H penalty on a Reg.44 appeal. Another 2 judgments on this section are set out below, all of them from the Supreme Court. They run from 2004 to 2022.
How do I find court cases under Section 15H 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 15H, section 15H Sebi Act, section 15H 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. 3 reported judgments on this section are set out on this page, beginning with SEBI v. Sunil Krishna Khaitan & Ors. (with SEBI v. Madhuri S. Patti & Ors.) (11 Jul 2022).
What should I read with Section 15H of the Securities and Exchange Board of India Act, and has it changed?
3 other provisions in this corpus refer back to it.
When did Section 15H of the Securities and Exchange Board of India Act come into force?
Section 15H of the Securities and Exchange Board of India Act, cited as Sebi Act 15H, 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 15 Oct 2026. This page is not a substitute for legal advice.