The main legal point established is that the Securities Exchange Board of India has the power to investigate past transactions and that Section 11-C of the Act is retrospective in nature.

JUDGMENT

T. Raja, J.

1. Having been unsuccessful in the challenge made to the respective impugned orders dated 20.07.2004, 15.08.2004, 16.08.2004, 15.09.2004 passed by the respondent in Reference No.IVD/ID4/KVRR/PS/2004 with the accompanying summons issued under Section 11-C(3), (5) & (6) of the Securities and Exchange Board of India Act, 1992 before the learned single Judge, the appellants/writ petitioners have preferred these writ appeals.

2. According to the respondent, the appellants/writ petitioners were involved in the business of buying, selling or dealing in shares of M/s Sai Televisions Limited during the period between April, 2001 and June, 2002 and by means of the orders impugned in the writ petitions, they were directed to furnish the details/information for such transactions held by them to enable the investigating authority to investigate into the allegations.

3. It is the claim of the appellants that the respondent/Securities and Exchange Board of India (for short, “the Board”) was established in the year 1988 by a Government resolution to promote orderly and healthy growth of the securities market. For the reason that the capital market in India witnessed a tremendous growth with increasing participation of the public, the Government of India, to sustain the investors confidence, decided to vest the Board with statutory powers. Therefore, the President of India promulgated the Securities Exchange Board of India Ordinance, 1992, since the Parliament was not in session. Later on, the Securities Exchange Board of India Act, 1992 (for short, “the Act)” was enacted replacing the said Ordinance. The Act has been amended from time to time vesting certain powers with the Board and Section 11 of the Act defines the power of the Board. Additional powers were also vested with the Board by the amendment in the year 2002 by inserting Section 11-C through Act 59 of 2002 with effect from 29.10.2002 vesting investigative powers on the Board giving a prospective effect subject to the conditions enumerated under Section 11-C(1)(a) and (b) of the Act.

4. Mr.S.R.Rajagopal, learned counsel appearing for the appellants submitted that Section 11-C(6) creates a punishable offence, if any person fails without reasonable cause or refuses to furnish information under sub- section (3), with imprisonment for a term which may extend to one year or with fine which may extend to one crore rupees, or with both, and also with a further fine which may extend to five lakh rupees for every day after the first during which the failure or refusal continues. Under Section 11-C(3), the person associated with the securities market is required to furnish information. But prior to the amendment of Section 11, the powers of the Board do not extend to any private individual. At the beginning of the year 2004, the respondent Board, by addressing a letter captioned as 'Investigation in the case of Sai Televisions Limited', requested for furnishing the details of transactions done for the period between April, 2001 and June, 2002. Therefore, the appellants/writ petitioners made a reply requesting the respondent to close the file, as they do not have the power to investigate. Subsequently, the respondent addressed the communications that were impugned before the learned single Judge, when the respondent does not have the power to issue summons in respect of the transactions prior to the amendment of the Act and even assuming but not admitting that the respondent has got power to issue the summons, such a power did not exist until 29.10.2002. It was the specific case of the appellants/writ petitioners before the learned single Judge that when the amendment came into force, more particularly, when the respondent did not have such power during the year 2001, they cannot exercise powers retrospectively for the transactions of the year 1996, as it is outside the scope and purview of the Act, therefore, such penal provision cannot be retrospective, it was pleaded. When t