The Supreme Court Friday held that the consent of regulator Sebi is not mandatory for compounding offences under section 24A of the Sebi Act but taking views of the expert body is necessary for stability in the securities market as well as investor protection.
A bench headed by Justice D Y Chandrachud said though Sebi is not conferred with any authority to veto a decision for proceeding in trial offences, it is a regulatory and prosecuting agency and the Securities Appellate Tribunal and the courts must obtain its views since it is an expert body. The bench said it is clear that Sebi’s consent cannot be mandatory before or the Court before which the proceeding is pending, for exercising the power of compounding under Section 24A. The apex court, which elucidated some guidelines that T or such courts must take into account while adjudicating an application under Section 24A, said however that eliciting of views of Sebi was necessary in the interest of the stability of the securities market and protection of investors.
The bench, also comprising Justice M R Shah, said the Securities and Exchange Board of India (Sebi) has vital functions to discharge in maintaining an orderly and stable market so as to protect the interests of investors.
