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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SANDEEP V.MARNE
Securities and Exchange Board of India – Appellant
Versus
Mahendra Shah – Respondent
| Table of Content |
|---|
| 1. allegations of fraudulent activities (Para 2 , 3 , 4) |
| 2. compounding application procedures and implications (Para 5 , 6 , 18) |
| 3. jurisdictional authority and sebi's role (Para 9 , 10 , 11) |
| 4. analysis of interest rate determination (Para 15 , 16) |
| 5. importance of sebi's views in compounding (Para 32 , 34) |
| 6. court's order for modification and discharge guidelines (Para 36 , 37) |
JUDGMENT :
SANDEEP V. MARNE, J.
1) This is an Appeal preferred by the Securities and Exchange Board of India (SEBI) allowing the Compounding Application and discharging the Respondent of the offence punishable under Section 24 (2) of the Securities and Exchange Board of India Act, 1992 (SEBI Act). The Special Court has allowed the application preferred by the Respondent for compounding of offences and has permitted compounding by directing Respondent No.1 to pay penalty of Rs.54,00,000/- alongwith interest @ 6% p.a. from the date of adjudication of order in addition to payment of amount of Rs.1,00,000/- towards legal charge. Appellant-SEBI is aggrieved by orders dated 4 March 2024 and 4 April 2024 to the limited extent of the Special Court reducing the rate of interest from 12% p.a. to 6% p.a. an
The court affirmed that the Special Judge has discretion in compounding offence penalties under the SEBI Act, and can determine interest rates independently of SEBI's recommendations.
(1) Power of compounding must be expressly conferred by Statute which creates offence. (2) Section 147 of N.I. Act does not expressly incorporate permission of Court for compounding, conceivably beca....
The main legal point established in the judgment is that SEBI's consent is necessary for compounding the offense under Section 24A of the SEBI Act, and the court must obtain the views of SEBI for gui....
A court may compel the SEBI to disclose documents relevant to compounding applications, reinforcing that while SEBI’s views are influential, they do not override judicial discretion in deciding these....
Statutory interest at 12% per annum on unpaid penalties arises from the expiry of the compliance period, reflecting SEBI's authority in recovery due under the Act.
(1) Dishonour of cheque – Compounding of offence – Section 482, Cr.P.C. and Section 147, N.I. Act, are different and distinct – Offence under Section 138, N.I. Act could be compounded under Section 1....
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