The Securities and Exchange Board of India Act, 1992
Administered Ministry: Ministry of Finance / Department of Economic Affairs
Section
Section 16 Power of Central Government to issue directions
(1) Without prejudice to the foregoing provisions of this Act, the Board shall, in exercise of its powers or the performance of its functions under 1 [this Act or the Depositories Act, 1996 (22 of 1996)], be bound by such directions on questions of policy as the Central Government may give in writing to it from time to time:
Provided that the Board shall, as far as practicable, be given an opportunity to express its views before any direction is given under this sub-section.
(2) The decision of the Central Government whether a question is one of policy or not shall be final.
Provided that the Board shall, as far as practicable, be given an opportunity to express its views before any direction is given under this sub-section.
(2) The decision of the Central Government whether a question is one of policy or not shall be final.
1. Subs. by Act 22 of 1996, s. 30 and the Schedule, for this Act (w.e.f. 20-9-1995).
Section 17 Power of Central Government to supersede the Board.
(1) If at any time the Central Government is of opinion--
(a) that on account of grave emergency, the Board is unable to discharge the functions and duties imposed on it by or under the provisions of this Act; or
(b) that the Board has persistently made default in complying with any direction issued by the Central Government under this Act or in the discharge of the functions and duties imposed on it by or under the provisions of this Act and as a result of such default the financial position of the Board or the administration of the Board has deteriorated; or
(c) that circumstances exist which render it necessary in the public interest so to do,
the Central Government may, by notification, supersede the Board for such period, not exceeding six months, as may be specified in the notification.
(2) Upon the publication of a notification under sub-section (1) superseding the Board,
(a) all the members shall, as from the date of supersession, vacate their offices as such;
(b) all the powers, functions and duties which may, by or under the provisions of this Act, be exercised or discharged by or on behalf of the Board, shall until the Board is reconstituted under sub-section (3), be exercised and discharged by such person or persons as the Central Government may direct; and
(c) all property owned or controlled by the Board shall, until the Board is reconstituted under sub-section (3), vest in the Central Government.
(3) On the expiration of the period of supersession specified in the notification issued under sub-section (1), the Central Government may reconstitute the Board by a fresh appointment and in such case any person or persons who vacated their offices under clause (a) of sub-section (2), shall not be deemed disqualified for appointment:
Provided that the Central Government may, at any time, before the expiration of the period of supersession, take action under this sub-section.
(4) The Central Government shall cause a notification issued under sub-section (1) and a full report of any action taken under this section and the circumstances leading to such action to be laid before each House of Parliament at the earliest.
(a) that on account of grave emergency, the Board is unable to discharge the functions and duties imposed on it by or under the provisions of this Act; or
(b) that the Board has persistently made default in complying with any direction issued by the Central Government under this Act or in the discharge of the functions and duties imposed on it by or under the provisions of this Act and as a result of such default the financial position of the Board or the administration of the Board has deteriorated; or
(c) that circumstances exist which render it necessary in the public interest so to do,
the Central Government may, by notification, supersede the Board for such period, not exceeding six months, as may be specified in the notification.
(2) Upon the publication of a notification under sub-section (1) superseding the Board,
(a) all the members shall, as from the date of supersession, vacate their offices as such;
(b) all the powers, functions and duties which may, by or under the provisions of this Act, be exercised or discharged by or on behalf of the Board, shall until the Board is reconstituted under sub-section (3), be exercised and discharged by such person or persons as the Central Government may direct; and
(c) all property owned or controlled by the Board shall, until the Board is reconstituted under sub-section (3), vest in the Central Government.
(3) On the expiration of the period of supersession specified in the notification issued under sub-section (1), the Central Government may reconstitute the Board by a fresh appointment and in such case any person or persons who vacated their offices under clause (a) of sub-section (2), shall not be deemed disqualified for appointment:
Provided that the Central Government may, at any time, before the expiration of the period of supersession, take action under this sub-section.
(4) The Central Government shall cause a notification issued under sub-section (1) and a full report of any action taken under this section and the circumstances leading to such action to be laid before each House of Parliament at the earliest.
Section 18 Returns and reports.
(1) The Board shall furnish to the Central Government at such time and in such form and manner as may be prescribed or as the Central Government may direct, such returns and statements and such particulars in regard to any proposed or existing programme for the promotion and development of the securities market, as the Central Government may, from time to time, require.
(2) Without prejudice to the provisions of sub-section (1), the Board shall, within 1[ ninety days] after the end of each financial year, submit to the Central Government a report in such form, as may be prescribed, giving a true and full account of its activities, policy and programmes during the previous financial year.
(3) A copy of the report received under sub-section (2) shall be laid, as soon as may be after it is received, before each House of Parliament.
(2) Without prejudice to the provisions of sub-section (1), the Board shall, within 1[ ninety days] after the end of each financial year, submit to the Central Government a report in such form, as may be prescribed, giving a true and full account of its activities, policy and programmes during the previous financial year.
(3) A copy of the report received under sub-section (2) shall be laid, as soon as may be after it is received, before each House of Parliament.
1. Subs. by Act 9 of 1995, s. 10, for sixty days (w.e.f. 25-1-1995).
Section 19 Delegation.
The Board may, by general or special order in writing delegate to any member, officer of the Board or any other person subject to such conditions, if any, as may be specified in the order, such of its powers and functions under this Act (except the powers under section 29) as it may deem necessary.
Section 20 Appeals.
(1) Any person aggrieved by 1 [an order of the Board made, before the commencement of the Securities Laws (Second Amendment) Act, 1999 (32 of 1999)], under this Act, or the rules or regulations made thereunder may prefer an appeal to the Central Government within such time as may be prescribed.
(2) No appeal shall be admitted if it is preferred after the expiry of the period prescribed therefor:
Provided that an appeal may be admitted after the expiry of the period prescribed therefor if the appellant satisfies the Central Government that he had sufficient cause for not preferring the appeal within the prescribed period.
(3) Every appeal made under this section shall be made in such form and shall be accompanied by a copy of the order appealed against and by such fees as may be prescribed.
(4) The procedure for disposing of an appeal shall be such as may be prescribed:
Provided that before disposing of an appeal, the appellant shall be given a reasonable opportunity of being heard.
(2) No appeal shall be admitted if it is preferred after the expiry of the period prescribed therefor:
Provided that an appeal may be admitted after the expiry of the period prescribed therefor if the appellant satisfies the Central Government that he had sufficient cause for not preferring the appeal within the prescribed period.
(3) Every appeal made under this section shall be made in such form and shall be accompanied by a copy of the order appealed against and by such fees as may be prescribed.
(4) The procedure for disposing of an appeal shall be such as may be prescribed:
Provided that before disposing of an appeal, the appellant shall be given a reasonable opportunity of being heard.
1. Subs. by Act 32 of 1999, s. 11, for "an order of the Board made" (w.e.f. 16-12-1999).
Section 20A Bar of jurisdiction.
1[20A. Bar of jurisdiction.--No order passed by the 2 [Board or the adjudicating officer] under this Act shall be appealable except as provided in 3 [section 15T or section 20] and no civil court shall have jurisdiction in respect of any matter which the 2 [Board or the adjudicating officer] is empowered by, or under, this Act to pass any order and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any order passed by the 2 [Board or the adjudicating officer] by, or under, this Act].
1. Ins. by Act 9 of 1995, s. 11 (w.e.f. 25-1-1995).
2. Subs. by Act 32 of 1999, s. 12, for "Board" (w.e.f. 16-12-1999).
3. Subs. by s. 12, ibid., for "section 20" (w.e.f. 16-12-1999).
2. Subs. by Act 32 of 1999, s. 12, for "Board" (w.e.f. 16-12-1999).
3. Subs. by s. 12, ibid., for "section 20" (w.e.f. 16-12-1999).
Section 21 Savings.
Nothing in this Act shall exempt any person from any suit or other proceedings which might, apart from this Act, be brought against him.
Section 22 Members, officers and employees of the Board to be public servants.
All members, officers and other employees of the Board shall be deemed, when acting or purporting to act in pursuance of any of the provisions of this Act, to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).
Section 23 Protection of action taken in good faith.
No suit, prosecution or other legal proceedings shall lie against the Central Government 1 [or Board] or any officer of the Central Government or any member, officer or other employee of the Board for anything which is in good faith done or intended to be done under this Act or the rules or regulations made thereunder.
1. Ins. by Act 9 of 1995, s. 12 (w.e.f. 25-1-1995).
Section 24 Offences.
1[24. Offences.--(1) Without prejudice to any award of penalty by the adjudicating officer 2[or the Board] under this Act, if any person contravenes or attempts to contravene or abets the contravention of the provisions of this Act or of any rules or regulations made thereunder, he shall be punishable with imprisonment for a term which may extend to 3 [ten years, or with fine, which may extend to twenty-five crore rupees or with both].
(2) If any person fails to pay the penalty imposed by the adjudicating officer 2[or the Board] or fails to comply with any 4*** directions or orders, he shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to 5 [ten years, or with fine, which may extend to twenty-five crore rupees or with both].
(2) If any person fails to pay the penalty imposed by the adjudicating officer 2[or the Board] or fails to comply with any 4*** directions or orders, he shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to 5 [ten years, or with fine, which may extend to twenty-five crore rupees or with both].
1. Subs. by s. 13,ibid., for section 24 (w.e.f. 25-1-1995).
2. Ins. by Act 13 of 2018, s. 187 (w.e.f. 8-3-2019).
3. Subs. by Act 59 of 2002, s. 28, for "one year, or with fine, or with both" (w.e.f. 29-10-2002).
4. The words "of his" omitted by s. 187,ibid. (w.e.f. 8-3-2019).
5. Subs. by s. 28, ibid., for certain words (w.e.f. 29-10-2002).
2. Ins. by Act 13 of 2018, s. 187 (w.e.f. 8-3-2019).
3. Subs. by Act 59 of 2002, s. 28, for "one year, or with fine, or with both" (w.e.f. 29-10-2002).
4. The words "of his" omitted by s. 187,ibid. (w.e.f. 8-3-2019).
5. Subs. by s. 28, ibid., for certain words (w.e.f. 29-10-2002).
Section 24A Composition of certain offences.
1[24A. Composition of certain offences.--Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), any offence punishable under this Act, not being an offence punishable with imprisonment only, or with imprisonment and also with fine, may either before or after the institution of any proceeding, be compounded by a Securities Appellate Tribunal or a court before which such proceedings are pending.]
1. Ins. by s. 29, ibid. (w.e.f. 29-10-2002).
Section 24B Power to grant immunity.
1[24B. Power to grant immunity.-- (1) The Central Government may, on recommendation by the Board, if the Central Government is satisfied, that any person, who is alleged to have violated any of the provisions of this Act or the rules or the regulations made thereunder, has made a full and true disclosure in respect of the alleged violation, grant to such person, subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under this Act, or the rules or the regulations made thereunder or also from the imposition of any penalty under this Act with respect to the alleged violation:
Provided that no such immunity shall be granted by the Central Government in cases where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of application for grant of such immunity:
Provided further that recommendation of the Board under this sub-section shall not be binding upon the Central Government.
(2) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by the Central Government, if it is satisfied that such person had, in the course of the proceedings, not complied with the condition on which the immunity was granted or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the contravention and shall also become liable to the imposition of any penalty under this Act to which such person would have been liable, had not such immunity been granted.]
Provided that no such immunity shall be granted by the Central Government in cases where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of application for grant of such immunity:
Provided further that recommendation of the Board under this sub-section shall not be binding upon the Central Government.
(2) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by the Central Government, if it is satisfied that such person had, in the course of the proceedings, not complied with the condition on which the immunity was granted or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the contravention and shall also become liable to the imposition of any penalty under this Act to which such person would have been liable, had not such immunity been granted.]
1. Ins. by s. 29, ibid. (w.e.f. 29-10-2002)
Section 25 Exemption from tax on wealth and income.
Notwithstanding anything contained in the Wealth-tax Act, 1957 (27 of 1957), the Income-tax Act, 1961 (43 of 1961) or any other enactment for the time being in force relating to tax on wealth, income, profits or gains
(a) the Board;
(b) the existing Securities and Exchange Board from the date of its constitution to the date of establishment of the Board,
shall not be liable to pay wealth-tax, income-tax or any other tax in respect of their wealth, income, profits or gains derived.
(a) the Board;
(b) the existing Securities and Exchange Board from the date of its constitution to the date of establishment of the Board,
shall not be liable to pay wealth-tax, income-tax or any other tax in respect of their wealth, income, profits or gains derived.
Section 26 Cognizance of offences by courts.
(1) No court shall take cognizance of any offence punishable under this Act or any rules or regulations made thereunder, save on a complaint made by the Board 1 ***.
2 *****
2 *****
1. The words "with the previous sanction of the Central Government" omitted by Act 9 of 1995, s. 14 (w.e.f. 25-1-1995).
2. Sub-section (2) omitted by Act 27 of 2014, s. 19 (w.e.f. 18-7-2013).
2. Sub-section (2) omitted by Act 27 of 2014, s. 19 (w.e.f. 18-7-2013).
Section 26A Establishment of Special Courts.
1[26A. Establishment of Special Courts.--(1) The Central Government may, for the purpose of providing speedy trial of offences under this Act, by notification, establish or designate as many Special Courts as may be necessary.
(2) A Special Court shall consist of a single judge who shall be appointed by the Central Government with the concurrence of the Chief Justice of the High Court within whose jurisdiction the judge to be appointed is working.
(3) A person shall not be qualified for appointment as a judge of a Special Court unless he is, immediately before such appointment, holding the office of a Sessions Judge or an Additional Sessions Judge, as the case may be.
(2) A Special Court shall consist of a single judge who shall be appointed by the Central Government with the concurrence of the Chief Justice of the High Court within whose jurisdiction the judge to be appointed is working.
(3) A person shall not be qualified for appointment as a judge of a Special Court unless he is, immediately before such appointment, holding the office of a Sessions Judge or an Additional Sessions Judge, as the case may be.
1. Ins. by s. 20, ibid. (w.e.f. 18-7-2013).
Section 26B Offences triable by Special Courts.
1[26B. Offences triable by Special Courts.-- Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), all offences under this Act committed prior to the date of commencement of the Securities Laws (Amendment) Act, 2014 (27 of 2014) or on or after the date of such commencement, shall be taken cognizance of and tried by the Special Court established for the area in which the offence is committed or where there are more Special Courts than one for such area, by such one of them as may be specified in this behalf by the High Court concerned.]
1. Ins. by Act 27 of 2014, s. 20 (w.e.f. 18-7-2013).
Section 26C Appeal and revision.
1[26C. Appeal and revision.-- The High Court may exercise, so far as may be applicable, all the powers conferred by Chapters XXIX and XXX of the Code of Criminal Procedure, 1973 (2 of 1974) on a High Court, as if a Special Court within the local limits of the jurisdiction of the High Court were a Court of Session trying cases within the local limits of the jurisdiction of the High Court.]
1. Ins. by Act 27 of 2014, s. 20 (w.e.f. 18-7-2013)
Section 26D Application of Code to proceedings before Special Court.
1[26D. Application of Code to proceedings before Special Court.-- (1) Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply to the proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall be deemed to be a Court of Session and the person conducting prosecution before a Special Court shall be deemed to be a Public Prosecutor within the meaning of clause (u) of section 2 of the Code of Criminal Procedure, 1973 (2 of 1974).
(2) The person conducting prosecution referred to in sub-section (1) should have been in practice as an advocate for not less than seven years or should have held a post, for a period of not less than seven years, under the Union or a State, requiring special knowledge of law.]
(2) The person conducting prosecution referred to in sub-section (1) should have been in practice as an advocate for not less than seven years or should have held a post, for a period of not less than seven years, under the Union or a State, requiring special knowledge of law.]
@1. Ins. by Act 27 of 2014, s. 20 (w.e.f. 18-7-2013).
Section 26E Transitional provisions.
1[26E. Transitional provisions.-- Any offence committed under this Act, which is triable by a Special Court shall, until a Special Court is established, be taken cognizance of and tried by a Court of Session exercising jurisdiction over the area, notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974):
Provided that nothing contained in this section shall affect the powers of the High Court under section 407 of the Code of Criminal Procedure, 1973 (2 of 1974) to transfer any case or class of cases taken cognizance by a Court of Session under this section.]
Provided that nothing contained in this section shall affect the powers of the High Court under section 407 of the Code of Criminal Procedure, 1973 (2 of 1974) to transfer any case or class of cases taken cognizance by a Court of Session under this section.]
1. Ins. by Act 27 of 2014, s. 20 (w.e.f. 18-7-2013)
Section 27 Contravention by companies.
1[Contravention by companies].--(1) Where 2[a contravention of any of the provisions of this Act Act or any rule, regulation, direction or order made thereunder] an offence under this Act has been committed by a company, every person who at the time the 3[contravention] was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the 3[contravention] was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an 3[contravention] under this Act has been committed by a company and it is proved that the 3[contravention] has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the 3[contravention] and shall be liable to be proceeded against and punished accordingly.
Explanation.--For the purposes of this section,--
(a) "company" means any body corporate and includes a firm or other association of individuals; and
(b) "director", in relation to a firm, means a partner in the firm.
Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the 3[contravention] was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an 3[contravention] under this Act has been committed by a company and it is proved that the 3[contravention] has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the 3[contravention] and shall be liable to be proceeded against and punished accordingly.
Explanation.--For the purposes of this section,--
(a) "company" means any body corporate and includes a firm or other association of individuals; and
(b) "director", in relation to a firm, means a partner in the firm.
1. Subs. by Act 13 of 2018, s. 188, for marginal heading (w.e.f. 8-3-2019).
2. Subs. by s. 188, ibid., for "an offence under this Act" (w.e.f. 8-3-2019).
3. Subs. by s. 188, ibid., for "offence" (w.e.f. 8-3-2019).
2. Subs. by s. 188, ibid., for "an offence under this Act" (w.e.f. 8-3-2019).
3. Subs. by s. 188, ibid., for "offence" (w.e.f. 8-3-2019).