SECURITIES AND EXCHANGE BOARD OF INDIA versus AJAY AGARWAL

SECURITIES AND EXCHANGE BOARD OF INDIA versus AJAY AGARWAL

Section 11-B of the SEBI Act is procedural in nature and can be applied retrospectively. No ex-post facto violation occurs unless the action is penal for an 'offence'; here, only a restraint order was imposed, not a penalty, and thus Article 20(1) is not attracted. SEBI, therefore, acted within its powers when passing the impugned order at the time the statute so empowered it, regardless of when the alleged conduct occurred.

Parties
Appellant: Securities and Exchange Board of India; Respondent: Ajay Agarwal
Jurisdiction
India
Judgment Date
25 February 2010
Procedural Posture
Civil Appeal / Supreme Court Appeal From Securities Appellate Tribunal Decision
Outcome
Appeal allowed; order of Securities Appellate Tribunal quashed; SEBI's order upheld.
Legal Topics
Retrospective Application of Amendments, Powers of SEBI Under SEBI Act, Interpretation of Social Welfare Legislation, Protection Against Ex Post Facto Law Under Article 20(1) of the Constitution, Procedural Vs Substantive Law
Securities Law Administrative Law Constitutional Law Retrospective Application of Amendments Powers of SEBI Under SEBI Act Interpretation of Social Welfare Legislation Protection Against Ex Post Facto Law Under Article 20(1) of the Constitution Procedural Vs Substantive Law

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Parties

Securities and Exchange Board of India

Appellant

Ajay Agarwal

Respondent

Procedural Posture

Civil Appeal / Supreme Court Appeal From Securities Appellate Tribunal Decision

Legal Issues

  1. 1 Whether Section 11-B of the Securities and Exchange Board of India Act, 1992 can be applied retrospectively to restrain a person from securities market access for acts committed prior to its enactment/amendment.
  2. 2 Whether such action violates Article 20(1) of the Constitution of India as an ex-post facto law.

Ratio Decidendi

Section 11-B of the SEBI Act is procedural in nature and can be applied retrospectively. No ex-post facto violation occurs unless the action is penal for an 'offence'; here, only a restraint order was imposed, not a penalty, and thus Article 20(1) is not attracted. SEBI, therefore, acted within its powers when passing the impugned order at the time the statute so empowered it, regardless of when the alleged conduct occurred.

Court Disposition

Appeal allowed; order of Securities Appellate Tribunal quashed; SEBI's order upheld.

Orders

  • Order of Securities Appellate Tribunal is quashed.
  • Order of the Chairman of SEBI restraining respondent for five years is upheld.