PRAKASH GUPTA versus SECURITIES AND EXCHANGE BOARD OF INDIA

PRAKASH GUPTA versus SECURITIES AND EXCHANGE BOARD OF INDIA

Section 24A vests the exclusive statutory power to compound offences punishable under the SEBI Act in the Securities Appellate Tribunal or the Court before which proceedings are pending and does not make SEBI’s consent mandatory; however, the SAT or Court must elicit and duly consider SEBI’s (and HPAC’s) views and give them considerable deference unless manifestly arbitrary or mala fide. On the facts, SEBI’s objection to compounding was justified and the High Court’s order refusing compounding was rightly upheld.

Parties
Appellant: Prakash Gupta; Respondent: Securities and Exchange Board of India
Jurisdiction
India
Judgment Date
23 July 2021
Procedural Posture
Criminal Appeal / Appeal to the Supreme Court From the High Court of Delhi Judgment in Crl. Rev. P. No.1076 of 2018 (order Dated 01.04.2019)
Legal Topics
Compounding of Offences, Section 24 a SEBI Act, Section 24 SEBI Act, Section 320 Cr PC, Role of SEBI and HPAC, Guidelines for Compounding
Securities Law Criminal Procedure Regulatory Law Compounding of Offences Section 24 a SEBI Act Section 24 SEBI Act Section 320 Cr PC Role of SEBI and HPAC +1 more

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Parties

Prakash Gupta

Appellant

Securities and Exchange Board of India

Respondent

Procedural Posture

Criminal Appeal / Appeal to the Supreme Court From the High Court of Delhi Judgment in Crl. Rev. P. No.1076 of 2018 (order Dated 01.04.2019)

Legal Issues

  1. 1 Whether the consent of SEBI is mandatory for compounding offences under Section 24A of the SEBI Act
  2. 2 Scope and authority conferred by Section 24A (who may compound, at what stage)
  3. 3 Relationship between Section 24A and Section 320 CrPC/non-obstante effect

Ratio Decidendi

Section 24A vests the exclusive statutory power to compound offences punishable under the SEBI Act in the Securities Appellate Tribunal or the Court before which proceedings are pending and does not make SEBI’s consent mandatory; however, the SAT or Court must elicit and duly consider SEBI’s (and HPAC’s) views and give them considerable deference unless manifestly arbitrary or mala fide. On the facts, SEBI’s objection to compounding was justified and the High Court’s order refusing compounding was rightly upheld.