PRAKASH D. NAIK, J.

1. Heard both sides for final disposal.

2. This petition is preferred by invoking Article 227 of Constitution of India and inherent powers under section 482 of Code of Criminal Procedure, 1973 to quash the order dated 27th December, 2017 passed by SEBI Special Court at Mumbai in SEBI Special Case No. 219 of 2014 rejecting the application preferred by the petitioners under Section 24A of the Securities and Exchange Board of India Act, 1992 (for short 'SEBI Act').

3. The petitioner No.1 is a company registered under the Companies Act 1956 and petitioner Nos.2 and 3 are purportedly the Directors of Petitioner No.1 who were facing prosecution under Section 24(2) of SEBI Act. The Respondent No.1 conducted investigation into an allegation of acquisition of shares of Shonkh Technologies International Limited by certain entities in excess of the limits prescribed under regulations 7 and 10 of SEBI Regulations 1997. The acquisition of shares by petitioner No.1 was allegedly found to be in violation of the takeover regulations and the respondent No.1 therefore initiated adjudication proceedings against the petitioner No.1. By order dated 27th April, 2003, the Adjudication Officer appointed by Respondent No.1 imposed a penalty of Rs. 1,50,000/- for violation of Regulation of 7(1) and (2) of takeover Regulations and Section 15(A)(b) of SEBI Act to be paid within 45 days of receipt of the adjudication order. The petitioner No.1 preferred an appeal before the Securities Appellate Tribunal against the aforesaid adjudication order. The said appeal was dismissed by order dated 9th January, 2007. The petitioner No.1 was unable to pay the entire amount and by letter dated 26th February, 2007 forwarded part payment of the penalty amount by way of demand draft. However, the said demand draft was not encashed and was returned by Respondent No.1. Subsequently, on 14th January, 2013 the Respondent No.1 filed a complaint before the Court of Metropolitan Magistrate at Bandra under Section 26 read with Section 24(2) and Section 27 of SEBI Act on account of nonpayment of penalty imposed by Adjudicating Officer. The said complaint was subsequently transferred to SEBI Special Court and is presently pending in the said Court.

4. The petitioners had filed an application before the SEBI Special Court for compounding the offence on 8th December, 2017, expressing their willingness to comply with the terms that may be mandated by SEBI as part of compounding process. The said application was opposed by Respondent No.1 by filling reply. The application was rejected vide order dated 22nd December, 2017. The petitioners are aggrieved by the said order and thus preferred the present petition challenging the impugned order.

5. Learned Senior Advocate Mr. Amit Desai advanced following submissions

i. The offence alleged against the petitioners is under Section 24(2) of the SEBI Act which provides for imprisonment and fine and hence it is compoundable in accordance with Section 24(A) of the said Act.

ii. Learned Special Judge failed to appreciate that Section 24(A) of the said Act does not anywhere provide that the compounding can be permitted only with consent of SEBI. The section is clear and unambigious that the power to compound is provided to the Court before which the proceedings are pending and consent of the complainant is of no consequence.

iii. Learned Special Judge failed to appreciate that unlike Section 320 of Code of Criminal Procedure Section 24(A) of SEBI Act does not provide that the compounding can be permitted with the consent of any particular person. If the intent of the statute had been to permit compounding of offence only with the help of SEBI, the Act would have contained a provision to that effect similar to the provision of Section 320 of Code of Criminal Procedure. The fact that the no such provision is provided shows that the intent of the statute is to provide unfettered power to the Court to compound the offence irresp