Securities, Exchanges and Markets

Securities and Exchange Board of India Act, 1992

— Ss. 15-A to 15-HB and 15-I & 15-J — Penalty provisions under — Nature of — Words <169>shall be liable<170> in — Import of — Mens rea or intention to contravene the said sections — Showing of, held, not necessary for imposition of penalty — Held, Ss. 15-A to 15-HB mandatorily provide for imposition of monetary penalties for respective breaches or non-compliance therewith and the relevant regulations [in this case SEBI (Mutual Funds) Regulations, 1996] — Defaults or failures to comply with Ss. 15-A to 15-HB are nothing but failures or defaults of statutory civil obligations, and proceedings under these sections are neither criminal nor quasi-criminal in nature — Therefore, there is no question of proof of intention or any requirement of mens rea and the same is not an essential element for imposing penalty under the said sections and relevant regulations — Penalty under Ss. 15-A to 15-HB is attracted as soon as a contravention of the statutory obligation(s) as contemplated thereunder and the relevant regulations is established — Intention of parties committing such violation is wholly irrelevant — It is only the quantum of penalty which is discretionary — Hence on facts, penalty imposed on respondent Mutual Fund for violating Ss. 15-D(b) and 15-E of SEBI Act and Regn. 25(7)(a), SEBI (Mutual Funds) Regulations, 1996, by adjudicating officer was proper — Securities Appellate Tribunal erred in importing an element of mens rea for imposition of penalty under the said provisions, (2006) 5 SCC 361-A

Securities, Exchanges and Markets

Securities and Exchange Board of India Act, 1992

— Ch. VI-A (Ss. 15-A to 15-K) — Object of insertion of penal provisions under, discussed, (2006) 5 SCC 361-B

Securities, Exchanges and Markets

Securities and Exchange Board of India Act, 1992

— S. 15-I — Proceeding under — Nature of — Held, penalty imposed by adjudicating officer is done so in adjudicatory proceedings and not by way of fine as a result of prosecution of an accused for a criminal offence, (2006) 5 SCC 361-C

Securities, Exchanges and Markets

SEBI (Mutual Funds) Regulations, 1996

— Regn. 25(7)(a) — Restriction on mutual fund on purchasing or selling securities through any broker associated with sponsor of the mutual fund beyond specified limit — Special circumstances which might justify waiver of the penalty for contravention of — Held, redemption requests, or small size of funds, low volume of transactions, thinly traded securities and administrative and operational exigencies, are not special circumstances that would warrant waiver of the penalty for contravention — However, such factors might be taken into consideration in determination of quantum of penalty by adjudicating officer (as done in present case) under S. 15-J, SEBI Act, 1992, (2006) 5 SCC 361-D

Securities, Exchanges and Markets

SEBI (Mutual Funds) Regulations, 1996

— Regn. 25(7)(a) — Restriction on mutual fund on purchasing or selling securities through any broker associated with sponsor of the mutual fund beyond specified limit — Rationale for, explained, (2006) 5 SCC 361-E

Civil Law

Penalty

— Penalty for breach of contravention of a commercial statute — Mens rea or intention to contravene — Showing of, held, not necessary for imposition of penalty, (2006) 5 SCC 361-F