Wednesday, September 17, 2014

Is levy of penalty mandatory and inevitable? - mindless/rote application of Supreme Court decision in Shriram?


(Note:- This article is my latest contribution to my monthly column on Securities Laws in Bombay Chartered Accountants' Journal)

Penalty is mandatory because Supreme Court says so, SEBI consistently and incorrectly holds
Almost each and every SEBI order levying penalty relies on a Supreme Court decision in Shriram’s case (SEBI vs. Shri Ram Mutual Fund (2006) 68 SCL 216). The reliance is for, it is submitted, an incorrect justification that since there is a violation, then penalty has to follow. Not only is mens rea (guilty intent) irrelevant, it is stated, but the penalty has to mandatorily follow any violation. Further, mitigating factors are irrelevant. In short, it is put forth, in the name and finality of a Supreme Court decision, that in case of proceedings for levy of penalty, penalty is mandatory and the Adjudicating Officer has no discretion in the matter. How far a correct conclusion is this? How far should a person who has not filed a document late, or made some errors in some filings, etc. resign himself to a penalty in all circumstances?

As stated, for this purpose, SEBI almost always cites a single sentence from the Shri Ram case as if by mindless rote. Here is one example from a recent SEBI Order (in matter of M/s. Vizwise Commerce Private Limited, Order No. JJ/AM/AO-117/2014, dated 28th August 2014).

“In the matter of SEBI Vs. Shri Ram Mutual Fund (2006) 68 SCL 216 (SC), the Hon’ble Supreme Court of India has held that “In our considered opinion, penalty is attracted as soon as the contravention of the statutory obligation as contemplated by the Act and the regulation is established and hence the intention of the parties committing such violation becomes wholly irrelevant”. (emphasis supplied)

With such words, it would appear inevitable that even in cases of mere clerical violations, liability is strict and absolute and there is no escape to levy penalty. However, the matter does not end there. Next cited are the powers of SEBI to levy huge penalties. Most provisions allow levy of penalty of upto Rs. 25 crores or a Rs. 1 lakh per day. Citing the decision and such penal provisions, large penalties running into several lakhs are levied, which, if one compares with huge and absolute powers SEBI has, would sound almost lenient.

The mitigating factors, even if pleaded by the party, are usually brushed aside, as if the hands of SEBI are tied in view of the clear mandate of the Supreme Court.

The alleged defaulter, in the face of such words of the Supreme Court, is demoralized and believes that there is no point in filing an appeal before the Securities Appellate Tribunal. It also so happens that the SAT in recent times rarely reduces or reverses such penalty. Thus, it is common to see scores of orders passed every week with relatively large amount of penalties. To be sure, SEBI does consider the facts of the case, and applies (as we will discuss) the provisions of Section 15J. But the quote in Shriram looms fairly large and heavy and, to many, would appear to shut out further consideration.

Is penalty inevitable? What did Supreme Court really say?
However, is levy of penalty so inevitable? Has the Supreme Court made the issue so absolute? Or are the words of the Court cited out of context? It is submitted that Supreme Court has really held something different. Moreover, it has itself considered mitigating factors and has not wholly ruled out bonafide intention. The Court has also not relieved SEBI/Adjudicating Officer from exercising judicial discretion and stated that he may choose not to levy penalty in appropriate cases.

Let us review very briefly the reported facts of Shriram’s case. Shriram was a mutual fund. Provisions made by SEBI prohibited a mutual fund from dealing with stock brokers beyond 5% of its aggregate sales/purchases. It was an admitted fact that in 12 instances Shriram violated this limit. Penalty was levied. Shriram pleaded (before the SAT, the appellant did not appear before the Supreme Court) that the violation was not intentional and there were certain genuine circumstances that required them to deal with such brokers beyond the maximum limits. The SAT set aside the order of penalty “on the purported ground that the penalty to be imposed for failure to perform a statutory obligation is a matter of discretion. The Tribunal has held that the penalty is warranted by the quantum which has to be decided by taking into consideration the factors stated in section 15J” (in the words of the Supreme Court).

Question of law
The Supreme Court phrased the “question of law” before it in the following words:-

“The important question of law which arises for consideration in the present appeal is whether the Tribunal was justified in allowing the appeals of the respondent herein and that whether once it is conclusively established that the Mutual Fund has violated the terms of the Certificate of Registration and the Statutory Regulations, i.e., the SEBI (Mutual Funds) Regulation, 1996, the imposition of penalty becomes a sine qua non of the violation. In other words, the breach of a civil obligation which attracts penalty in the nature of fine under the provisions of the Act and the regulations would immediately attract the levy of penalty irrespective of the fact whether the contravention was made by the defaulter with any guilty intention or not.” (emphasis supplied).

Thus, as will seen later, the question before the Court was whether, once a violation is established, does penalty have to follow or does it would also have to be established that the defaulter had a guilty intention?

What Supreme Court held
It is in this light that the Court reviewed the framework of the Act. It pointed out that broadly there were two sets of proceedings under the Act – one under which penalty is levied in civil proceedings and others which are criminal proceedings. For imposing penalty in civil proceedings, proof of a guilty intention is not required, while it is mandatory in case of criminal proceedings.

Since in the present case, the proceedings were for levy of penalty under civil proceedings, there was no need to prove that Shriram had a guilty intention. It was sufficient to show that the violation was established. Since this was done, penalty was leviable. However, is this the end of the matter? Is “intention” wholly irrelevant? Are other factors including mitigating factors wholly irrelevant? It is submitted this is not so and not only does the Act provide otherwise, but even the Supreme Court does not say so, as is implied in SEBI orders.

Factors to be considered for deciding quantum of penalty or waiving it
That penalty is not so inevitable is apparent from the SEBI Act itself. Section 15J makes it clear that, in adjudication proceedings, the Officer shall have due regard to certain factors. The section reads as under (emphasis supplied):-

While adjudging quantum of penalty under section 15-I, the Adjudicating Officer shall have the due regard to the following factors, namely :-
(a )the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default;
(b)the amount of loss caused to an investor or group of investors as a result of the default;
(c )the repetitive nature of the default."

Thus, the Act itself mandates the Adjudicating Officer to consider these three factors. This was recognized in Shriram too.

It is also submitted that in appropriate cases levy of zero penalty is also appropriate. It is also submitted that other factors, apart from these three statutory factors, would also be relevant, depending on facts of each case. This is also evident from decision of Supreme Court in Shriram itself.

For example, the Supreme Court noted that “there has been a clear violation of the statutory regulations and provisions repetitively, covering a period of 6 quarters”. In other words, the fact that the violations were repetitive over 6 quarters was highlighted.

The Supreme Court also reviewed the circumstances in the case to show that there were no extraordinary circumstances mitigating the violation. The Court observed, “The facts and circumstances of the present case in no way indicate the existence of special circumstances so as to waive the penalty imposed by the adjudicating officer”. Again, this shows two things. Had there been special facts/circumstances shown, they, firstly, would have to be considered. Secondly, appropriate circumstances would justify waiver of the penalty too. Indeed, the Court went ahead and observed that the Officer had indeed considered all the circumstances before levy of penalty which too was below the maximum amount.

Curiously, the Court even noted that the violation was wilful. The Court observed, “Hence, we hold that the respondents have wilfully violated statutory provisions with impunity and, hence, the imposition of penalty was fully justified.” One wonders, if it was so clear that wilful intent is totally irrelevant, why was such factor needed to be considered? If it can be clearly established in a particular case that there was no wilful violation, would penalty not be leviable? Or at least penalty would be reduced? In other words, absence of mens rea is not wholly irrelevant, as SEBI orders suggest.

In light of this, it is submitted that the consistent stand of SEBI that violation has to result in penalty is wrong in law and its reliance on Shriram, far from being correct, is actually wrong and goes against what the Court held in that case. It is submitted that SEBI has to consider all mitigating factors before levy of penalty. If the appellant demonstrates that he did not have guilty intention, that too has to be judicially considered. Further, SEBI has full discretion to levy a nominal penalty or even waive penalty altogether. SEBI also has to consider the three factors that Section 15J prescribes. The defaulter would also be right in questioning an order of penalty on grounds that there were mitigating circumstances or that such circumstances were not appreciated by SEBI. It is thus high time that the ghost of Shriram that haunts adjudication proceedings is exorcised, either by SEBI itself, or through a strong appeal before SAT/Supreme Court. And justice, sense of fair play and absence of arbitrariness be restored in adjudication proceedings.

Endnote:- It is worth drawing attention to a recent amendment to penalty provisions made by the Securities Laws Amendment Act 2014, notified on 25th August 2014. By this, most provisions relating to penalties now provide that a minimum penalty of Rs. 1 lakh would be leviable. It is submitted that even despite such provision, the ratio of Shriram continues to be valid. SEBI has to consider all circumstances even for levy of minimum penalty. And that SEBI continues to have power to waive penalty altogether.

Tuesday, September 16, 2014

“Deposits” existing on 31st March 2014 - how to be treated under new Companies Act/Rules?

Since notification of the Companies Act, 2013 and Rules thereunder, certain transitional issues relating to “deposits” are causing concerns to numerous companies, big and small, listed and unlisted, public or private. They arise from the substantially modified definition of the term “deposits”. Many items of loans and other receipts that were not “deposits” earlier being now treated as deposits. Companies are thus not allowed or severely restricted from accepting such amounts. While there are enough issues in the new definition, certain transitional issues are creating more urgent problems. Differing views by professionals and others to resolve the ambiguities is creating its own further confusion.

The issue is – how are monies received by a company on or before 31st March 2014 and which under the new definition have become deposits to be treated? The wide new definition has resulted in common items like share application monies, certain types of debentures, security deposits, advance against goods/property, loans from shareholders, etc. to be deposits under certain circumstances. If such monies were accepted on or before 31st March 2014, and they remain outstanding on and after 1st April 2014, is there a violation involved? Is there a time period during which such “deposits” should be repaid?

Take an example of share application money. The revised definition says that shares should be allotted within 60 days of receipt of share application monies, failing which the amount should be repaid within 15 days thereafter. Say, a company received on 29th March 2014. The allotment of shares partly took place on 31st August 2014 and remaining will take place in June 2015. Is there any violation of law? More specifically should the company:-
(i)             have repaid the share application money on 31st March 2014?
(ii)           have allotted the shares by 28th May 2014, and failing which repaid them by 12th June 2014?
(iii)          have allotted the shares by 31st May 2014, and failing which repaid them by 15th June 2014?
(iv)         Have allotted the shares by 31st March 2015 or repaid the amount?
(v)           if the monies were received on 1st January 2014, will they have to be repaid on 31st March 2014?

Or can the Company continue to hold these amounts till the Company/the share applicants decide to either allot the shares or refund the money?

Similar concerns arise for numerous other common items that are now treated as deposits.

There are serious penal consequences if the provisions are violated including fine and/or imprisonment.

Section 74 provides that “deposits accepted” before 1st April 2014 and which “remain unpaid” shall be repaid within one year from that date or one year from date when they became due, whichever is earlier. It is not clear whether “deposits” refers to the definition under the earlier law or the new one. It is also not clear whether “unpaid” means due and unpaid or unpaid even if not due.

The issue is further complicated by the Rules. For example, it is provided that shares should be allotted against share application monies within 60 days of their receipt failing which the amounts should be repaid within 15 days after such 60 days. Advances against goods have to be adjusted by delivery of goods or repaid within one year. And so on. Will – and, if yes, how - will these provisions apply to such amounts existing on 31st March 2014? For example, in case of share application monies in the above example, will the allotment have to be carried out within 60 days? For advance received against goods on 1st January 2014, should the goods be delivered or amount repaid by 1st January 2015?

Professionals and even professional bodies are not much helpful in sense of having a consensus. On one extreme is a view that the new law does not at all apply to any amount received on or before 31st March 2014, which will continue to be governed by the old law. Another view is that Section 74 should be interpreted to mean that all such amounts on 31st March 2014 should be repaid within the time specified in that section. Yet another view is that the new law applies to such old amounts too and thus, for example, share application monies received on or before 31st March 2014 should have been repaid within 60 days of receipt. The FAQs of the Institute of Company Secretaries of India opines that share application monies existing on 31st March 2014 should be repaid by 31st May 2014 or else it will be treated as deposits. No detailed reasoning is given for this view.

I submit that amounts received on or before 31st March 2014 ought to be governed by old law. The new law ought to apply only to receipts on or after 1st April 2014.

However, there is ambiguity and resultant anxiety. It is reported that amendments relating to deposits are soon expected. I hope that either these amendments or amendment to the rules or clarification by circulars resolve these ambiguities.

Monday, September 8, 2014

SAT Order on “Flash Crash”

A few days ago, the Securities Appellate Tribunal (SAT) passed its order on an appeal by Emkay Global Financial Services Limited against the National Stock Exchange (NSE) and several investors in a case involving a “flash crash”. This case raises interesting legal and contractual issues, although they were substantially resolved through an interpretation of the bye laws and various circulars issued by the NSE.

The case arose due to a “fat finger” trade, which involves an error in inputing information into a computer while executing a trade. In October 2012, a dealer of Emkay Global placed an order to sell 17 lakh NIFTY 50 units ‘based on quantity’ instead of Rs. 17 lakh in value. Due to this error, the sell order was executed for a value of Rs. 980 crores, which was vastly in excess of the contemplated transaction. While the dealer immediately realised the situation and tried to cancel the order, he was unable to do so as it had already entered the exchange server. The enormity of the situation can be attributed to a confluence of factors that led to a “perfect storm”. The risk management measures at Emkay Global’s end did not function to backstop the human error. Moreover, NSE’s circuit breaker system did not arrest the market fall when the NIFTY index fell by 10%. Following this incident, the Disciplinary Action Committee (DAC) of the NSE investigated the matter and imposed a penalty of Rs. 25 lakhs on Emkay Global and certain other trading parties. NSE also rejected a request by Emkay Global for annulment of the trade on account of the error.

It is against these actions that Emkay Global appealed before the SAT. From a legal standpoint, SAT was concerned with three broad questions, on two of which it returned a finding. First, it considered whether the erroneous trades are liable to be treated as a “material mistake” and hence to be annulled by virtue of NSE’s bye law 5(a). SAT decided to provide a narrow interpretation to the expression “material mistake” and that since the trades occurred due to a failure in the risk management system of Emkay Global, it amounted to breach of duty/ negligence which cannot be a circumstance for invocation of bye law 5(a). SAT’s interpretation suggests that bye law 5(a) contemplates inviolability of dealings on the stock exchange and that “it is evident that the expression ‘material mistake’ in Bye law 5(a) would be attributable to such trades which affect sanctity of the trade in spite of it being executed after exercising due care, caution and diligence”. Moreover, SAT was categorical in that the magnitude of the loss caused it not determinative of “material mistake”.

Second, it was found that various investors had placed unrealistic orders to buy NIFTY 50 at prices distant from the prevailing market price, and that these trades were effected without the stipulated margin money. Hence, apart from the lack of diligence on the part of Emkay Global, there were also violations on the part of the investors who purchased the securities so as to derive unanticipated profits. SAT seemed to display some concern on this count given that NSE does not seem to have considered these matters in detail while rejecting annulment of the trades. Hence, SAT set aside NSE’s orders against the annulment of trades relating to two counterparties and remanded the matter for fresh consideration. Hence, in these instances, the question of annulment of the trades has been left open and for further consideration.

Third, SAT refused to annul the trades on the ground of the failure of NSE’s systems to halt trading when the NIFTY index fell below 10%.

A majority of SAT consisting of two members rejected Emkay Global’s appeal on the first and third issues discussed above, and remanded the second for fresh consideration. In a separate order, the third member refused annulment and rule against Emkay Global.

While the legalities and technicalities of the circumstances  have been discussed in detail in SAT’s order, the essential question revolving around this dispute is whether sanctity of trades ought to be preserved despite the erroneous nature of the trades. SAT’s outcome has largely pointed towards upholding these trades, and therefore preserving the sanctity. This has economic implications as such an approach would preserve market integrity. Where SAT has left the matter for further consideration, the issue does not pertain to the erroneous nature of the trade but rather to the non-compliance of the counteparties with relevant NSE requirements regarding princing and margin. Overall, this approach may be considered somewhat harsh as it leaves no room for error on the parties of trading entities and their dealers, who are cast with the onerous obligations of establishing and maintaining the necessary risk management systems, procedures and practices. The obligations are further enforced by powers conferred upon the stock exchange to penalise the offenders so as to have a deterrent effect against the lack of care and diligence. Given the strict nature of this approach, there is no risk of moral hazard.

On the other hand, unyielding insistence on sanctity of trades could confer windfall gains upon counterparties who are fortunate (and perhaps even canny) to have taken the benefit of the erroneous trades. One method of preventing undue advantage to such counterparties would be to disgorge the profits they may have obtained so as to balance the equities between the parties. The fact that SAT has left the door open for some form of reconsideration (including annulment) suggests it is cognisant of these inequities that need to be rectified.

In all, flash crashes that are caused by errors such as fat finger trades bring about significant complexities in the markets, especially given their magnitudes. While systems and processes can help guard against the occurrence of such events, they may be faced with a “perfect storm” situation wherein the regulatory and dispute resolution mechanisms would have to be invoked to dispense justice to the parties affected by the error.

For a further analysis of the SAT order and its implications, please see “SAT order on NSE's actions after the Emkay crash”.

Sunday, September 7, 2014

The Securities Laws (Amendment) Act, 2014 – A Critical Analysis

[The following guest post is contributed by Mubashshir Sarshar, who is a lawyer and an alumnus of National Law University Delhi. The author can be reached at mubashshir.sarshar@gmail.com.]

Two standalone incidents within a span of one year have managed to change the entire paradigm of the securities market transactions in India. The Sahara and Saradha episodes symbolised the stark loopholes that existed in the regulatory regime controlling the affairs of securities market transactions in India.

While a slew of legislative changes were brought into company law in the form of Chapter III, Part II of the Companies Act, 2013 in line with the Supreme Court judgment[1] to tackle the interpretation of ‘private placement’ given by Sahara.

As for Saradha, since the Parliament was not in session, the President after being satisfied about the gravity of the situation used his emergency law making powers and promulgated an ordinance three times in a row to tackle the situation in the interim. After the expiration of the third ordinance, a Bill was tabled in the monsoon session of the 16th Lok Sabha to give legislative sanctity and to amend certain unilateral provisions contained in the said ordinance. The Bill reinstated certain provisions in the SEBI Act, digressing from the Ordinance to an extent, in order to include a check and balance mechanism for the regulatory authority i.e. SEBI. The Parliament passed the Bill in the first week of August after which it received the assent of the President on 22 August 2014 and was simultaneously published in the official gazette to bring the Securities Law (Amendment) Act, 2014 (“Act”) into force.

As the recital of the Act provides, it is a legislation to amend and plug the existing loopholes in three cardinal legislations controlling the securities market transactions in India, namely the Securities and Exchange Board of India (SEBI) Act, 1992, the Securities Contracts (Regulation) Act, 1956 and the Depositories Act, 1996.

Although, certain reforms introduced under the Act have already been discussed in a previous post when the provisions were in the form of a Bill, the following are certain predicaments which could potentially become a point of judicial interpretation and construction in the days to come.

1.         Power to SEBI to seek permission for search and seizure from a designated Court/Magistrate in Mumbai

The erstwhile Section 11C (8) of the SEBI Act provided that in case the investigative authority had any reasonable ground to believe that any documents associated with securities market may be destroyed, it may make an application to a Judicial Magistrate of the first class having jurisdiction for an order for the seizure of such documents. Further, there were certain other pre-qualifications prescribed under the said section before a magistrate could authorize such search and seizures.[2]

The Ordinance on the other hand removed all such impediments and gave the Chairman of SEBI unfettered powers to authorize the search and seizures without any prior judicial approval.

However, the Act now reinstates the erstwhile position with a minor change,[3] requiring SEBI to approach a Magistrate or Judge of a designated court in Mumbai as may be notified by the Central Government before undertaking the operations.

This is positive step from the erstwhile position as pointed out by the Finance Minister in his introduction to the Bill in the Lok Sabha,[4] stating that while approaching a magistrate of an area where the search was to be conducted, the whole issue would become public and the purpose of a search was defeated as secrecy was an essential element of any search operation. On the other hand, power in the hands of executives without any safeguards is bound to be abused. Hence, the check and balance approach promulgated under the Act is a welcome step.

However, the latest position of the government to designate special magistrates/judges from where a sectoral regulator could obtain permission before conducting a search and seizure operation could have repercussions and judicial scrutiny of other sectoral regulators especially that of the Income Tax authorities under Section 132 of the Income Tax Act, 1961 and more recently that of the Competition Commission under the proposed Section 41(3) of the Competition (Amendment) Bill, 2012.

2.         Excessive delegation of power to SEBI with regard to Collective Investment Schemes

Under Section 11AA of the SEBI Act, two addendums have been added by the Act. The first one being a proviso to sub-section (1) which essentially brings under SEBI’s purview any corpus of funds amounting to Rs. 100 crore or more which is not regulated by any other sectoral regulator and the second one being a new sub-section (2A) which allows SEBI to frame regulations for any scheme to be considered as a collective investment scheme, without prescribing any guidelines on the criteria that SEBI may use to formulate such regulations.

Both these addendums, in my opinion invite huge ramifications for SEBI so far so it is not able to clearly cull out what ‘pooling of funds’ would be deemed to mean and what would constitute a collective investment scheme apart from the four attributes specified under the present Section 11AA(2) of the SEBI Act.

Further, if the delegated authority provided to SEBI to frame regulations for collective investment scheme is tested on the anvil of constitutionality and in the backdrop of the Supreme Court judgment in the case of In Re Delhi Laws Act,[5] it might be considered as a case of excessive delegation of power.

3.         Power of Disgorgement

A new sub-section in the form of sub-section (5) under Section 11 of the SEBI Act has been inserted by the Act to provide that any amounts collected through disgorgement (repayment) i.e. amount of profit made or the loss averted in the said fraudulent transaction, after an issuance of a direction under Section 11B of the SEBI Act or Section 12A of the Securities Contracts (Regulation) Act, 1956 or Section 19 of the Depositories Act, 1996 would be credited to the Investor Protection an Education Fund (“IPF”).

However, again the formulation of a framework to utilise such disgorged funds has been bestowed on SEBI. In my opinion, the amount credited in the IPF should primarily be used to recoup the innocent investors who would have a rightful claim to such amounts.

From the standpoint of SEBI, this addition has lent a fresh lease of life to disgorgement orders because of the clarity in the law that it has offered and the days to come should see SEBI come at par with the US Securities Exchange Commission (SEC) in terms of utilising disgorgement orders to effectively curb securities market malpractices.

4.         Securities Appellate Tribunal’s (“SAT”) power with regard to settlement proceedings

There is a significant change in the position of law with regard to SAT’s power to adjudicate upon an appeal from an order passed by SEBI under settlement proceedings.

The erstwhile Section 15T sub-clause (2) of the SEBI Act essentially provided that no appeal shall lie with the SAT when an order was made by SEBI with the consent of both the parties. However, both, the Ordinance as well as the Act has omitted the concerned sub-section and replaced it with a new addendum in the form of Section 15JB sub-clause (4) which provides that no appeal shall lie against any order passed by SEBI in settlement proceedings.

In my opinion, such a restriction under the new provision would also come under severe judicial scrutiny because once a party receives an adverse order from SEBI under the settlement proceedings and the SAT refuses to entertain the matter for want of jurisdiction, the natural course of action followed would be to file a writ petition before a High Court under Article 226 of the Constitution or challenge the said provision to be unconstitutional before the Supreme Court under Article 32 of the Constitution.

5.         Establishment of Special Courts

A set of new provisions in the form of Section 26A to 26E has been inserted by the Act, which provides for the establishment of Special Courts for speedy trial of all offences committed under the SEBI Act. The Special Court would consist of a single judge appointed by the Central Government with the concurrence of the Chief Justice of High Court within whose jurisdiction the judge to be appointed is working. The Special Court would however, only serve as a Court of Sessions under the jurisdiction of the designated High Court.

This amendment is in line with Section 435 of the Companies Act, 2013 which also provides for the establishment of special courts to deal with all offences under the Companies Act. One could assume that the idea behind this move by the government to designate special courts to deal with offences under a particular statute is to provide a more efficient and specialized system of judicial functioning.

However, in my opinion, the legislature has left a lot of leeway for supposition, as to the rationale for creating a fast track feeder within the criminal justice system, which is not created by the judiciary but at the discretion of the executive. Although, in the backdrop of the vast number of securities frauds’ surfacing of late, such a step is seen in a positive light by the various stakeholders.

- Mubashshir Sarshar




[1] Sahara India Real Estate Corporation Limited & Ors v. Securities and Exchange Board of India & Anr, Civil Appeal No. 9813 and 9833 of 2011.
[2] Proviso to Section 11C (9) of the SEBI Act.
[3] Section 5 of the Act.
[4] Lok Sabha Debates, August 5, 2014.
[5] 1951 2 SCR 747.