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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2818 OF 2008
Securities and Exchange Board of India ...Appellant (s)
Versus
Kishore R. Ajmera ...Respondent (s)
WITH
CIVIL APPEAL NO.8769 OF 2012
CIVIL APPEAL NO.6719 OF 2013
CIVIL APPEAL NO.252 OF 2014
CIVIL APPEAL NO.282 OF 2014
JUDGMENT
RANJAN GOGOI, J.
1. The core question of law arising in this group of appeals
being similar and the facts involved being largely identical, all
the appeals which were heard analogously are being decided
by this common order.
2. The question of law arising in this group of appeals may
be summarized as follows.
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20. Before embarking upon the necessary discussions, we
would like to record our views on a somewhat unclear if not a
confused picture that emanates from parallel provisions
contained in the Act and the Regulations framed thereunder,
as referred to above. This is particularly in the context of the
power of imposition of penalty on determination of liability
either for manipulative or fraudulent practices or for violation
of the Code of Conduct Regulation, 1992. The different
Regulations including the Regulations that prescribe the
procedural course, namely, SEBI (Procedure for Holding
Enquiry by Enquiry Officer and imposing Penalty) Regulations
2002 and the successor Regulation i.e. SEBI (Intermediaries)
Regulations 2008 contain identical and parallel provisions
with regard to imposition of penalty resulting in myriad
provisions dealing with the same situation. A comprehensive
legislation can bring about more clarity and certainty on the
norms governing the security/capital market and, therefore,
would best serve the interest of strengthening and securing
the capital market.
21. The SEBI Act and the Regulations framed thereunder are
intended to protect the interests of investors in the Securities
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Market which has seen substantial growth in tune with the
parallel developments in the economy. Investors' confidence in
the Capital/Securities Market is a reflection of the
effectiveness of the regulatory mechanism in force. All such
measures are intended to preempt manipulative trading and
check all kinds of impermissible conduct in order to boost the
investors' confidence in the Capital market. The primary
purpose of the statutory enactments is to provide an
environment conductive to increased participation and
investment in the securities market which is vital to the
growth and development of the economy. The provisions of
the SEBI Act and the Regulations will, therefore, have to be
understood and interpreted in the above light.
22. It is a fundamental principle of law that proof of an
allegation levelled against a person may be in the form of
direct substantive evidence or, as in many cases, such proof
may have to be inferred by a logical process of reasoning from
the totality of the attending facts and circumstances
surrounding the allegations/charges made and levelled. While
direct evidence is a more certain basis to come to a
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proper to impose different penalties in different cases involving
different set of facts, we do not see how and why interference
should be made in present appeals.
31. In the light of the above discussions, we dismiss the Civil
Appeal No.2818 of 2008 (SEBI Vs. Kishore R. Ajmera) and
affirm the order dated 05.02.2008 passed by the Securities
Appellate Tribunal, Mumbai.
Insofar as the remaining appeals are concerned, we allow
the same and set aside the orders of the Securities Appellate
Tribunal, Mumbai passed in each of the appeals and restore
the orders and penalty imposed on the respondents - brokers
by the respective orders of the Whole Time Member of the
SEBI.
…….…………………………...J.
[RANJAN GOGOI]
…………………………….……J.
[PRAFULLA C. PANT]
NEW DELHI;
FEBRUARY 23, 2016.
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