Offences

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. Sunita Bhagat vs Sebi

   Supreme Court of India 15 Jul 2016 Binding (Supreme Court) Reportable (2016) 7 SCC 317

   Court's Decision & Legal Precedent

   Section 12(1B) of the SEBI Act creates two classes of persons: (i) those who commenced collective investment activities prior to 25.1.1995 ('proviso category') who may continue until obtaining registration under the regulations; and (ii) those who did not ('non-proviso category') who are absolutely barred from commencing such activities until obtaining registration. The bar for the non-proviso category is self-executing and operative from 25.1.1995 regardless of when regulations are framed. However, criminal prosecution for regulatory non-compliance (such as failure to apply for registration under Regulation 5) requires that the accused was a director/officer of the company at the time the specific breach occurred. A director who resigned before the deadline for compliance cannot be prosecuted for breaches arising on or after the resignation date. The complaint must clearly disclose whether the accused is charged as a non-proviso category violator (commencing activity without authority) or merely as an existing operator who failed to comply with procedural regulations. Absence of such clarity, combined with the accused having exited before the breach date, renders prosecution unsustainable.

   On this section: Penalty provision for violations of the Act. Contravention entails penal consequences making the provision mandatory, not directory.

   Read the full order on eCourts India

2. Securities and Exchange Board of India vs S. K. Shelgikar

   Supreme Court of India 21 Aug 2017 Binding (Supreme Court)

   Court's Decision & Legal Precedent

   Where a special statute expressly or by necessary implication divests lower courts of jurisdiction and vests it in higher courts through amendment, such amendment operates retrospectively to all pending matters, including those where offences were committed before the amendment and proceedings initiated before the amendment, unless the amendment itself expressly provides otherwise. The change of forum in such cases is not merely procedural but is mandated by express statutory language, and no person has a vested right to be tried by a particular forum once proceedings have been initiated. The legislative intent for retrospective application can be inferred from express language divesting jurisdiction from lower courts and vesting it exclusively in higher courts, as evidenced by phrases such as 'No court inferior to that of a Court of Session shall try any offence' and 'all offences committed prior to or after the date of commencement shall be tried by Special Court.'

   On this section: Examined the enhancement of punishment from one year to ten years imprisonment and fine up to twenty-five crore rupees, which necessitated change of forum from Magistrate courts to higher courts

   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.