ADJUDICATING OFFICER, SECURITIES AND EXCHANGE BOARD OF INDIA versus BHAVESH PABARI

Citation: [2019] 18 S.C.R. 898 · Decided: 28-02-2019 · Supreme Court of India · Bench: RANJAN GOGOI, DEEPAK GUPTA, SANJIV KHANNA · Disposal: Disposed off

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Judgment (excerpt)

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898
SUPREME COURT REPORTS
[2019] 18 S.C.R.
ADJUDICATING OFFICER, SECURITIES AND EXCHANGE
BOARD OF INDIA
v.
BHAVESH PABARI
(Civil Appeal No.11311 of 2013)
FEBRUARY 28, 2019
[RANJAN GOGOI, CJI, DEEPAK GUPTA AND
SANJIV KHANNA, JJ.]
Securities and Exchange Board of India Act, 1992 – s.15-J,
Cl. (a), (b) & (c) – Whether conditions stipulated in Clauses (a), (b)
and (c) of s.15-J are exhaustive to govern the discretion in the
Adjudicating Officer to decide on the quantum of penalty or the
said conditions are merely illustrative – Held: Provisions of Clauses
(a), (b) and (c) of s.15-J are illustrative in nature and have to be
taken into account whenever such circumstances exist – But this is
not to say that there can be no other circumstance(s) beyond those
enumerated in Clauses (a), (b) and (c) of s.15-J that the Adjudicating
Officer is precluded in law from considering while deciding on the
quantum of penalty to be imposed – A narrow view would be in
direct conflict with the provisions of s.15-I(2) which vests jurisdiction
in the Adjudicating Officer, who is empowered on completion of the
inquiry to impose “such penalty as he thinks fit in accordance with
the provisions of any of those sections.”– The above apart, the
circumstances enumerated in Clauses (a), (b) and (c) of s.15-J may
have no relevance and may never arise in case of contraventions
contemplated by certain provisions of the SEBI Act, for instance
s.15-A, 15-B or 15-C – Therefore, to understand the conditions
stipulated in Clauses (a), (b) and (c) of s.15-J to be exhaustive and
admitting of no exception or vesting any discretion in the
Adjudicating Officer would be virtually to admit / concede that in
adjudications involving penalties u/ss.15-A, 15-B and 15-C, s.15-J
will have no application – Such a result could not have been intended
by the legislature – Conditions stipulated in Clauses (a), (b) and (c)
of s.15-J are not exhaustive and in the given facts of a case, there
can be circumstances beyond those enumerated by Clauses (a), (b)
and (c) of s.15-J which can be taken note of by the Adjudicating
Officer while determining the quantum of penalty.
898
[2019] 18 S.C.R. 898
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Securities and Exchange Board of India Act, 1992 – s.15-J,
Cl. (a), (b) & (c) and ss.15-A to 15-HA – Whether conditions
stipulated in Clauses (a) to (c) of s.15-J (which enumerates the
“factors to be taken into account by the Adjudicating Officer” while
adjudging the quantum of penalty) are mandatory conditions which
must be read into ss.15-A to 15-HA (the penalty provisions) in the
sense that unless the conditions specified in Clauses (a) to (c) are
satisfied, penalty cannot be imposed by the Adjudicating Officer
under the substantive provisions of ss.15-A to 15-HA – Held: The
argument is too far-fetched to be accepted – s.15-J enumerates by
way of illustration(s) the factors which the Adjudicating Officer
should take into consideration for determining the quantum of
penalty imposable – Imposition of penalty depends upon satisfaction
of the substantive provisions as contained in s.15-A to s.15-HA.
Securities and Exchange Board of India Act, 1992 – s.15-J,
Cl. (c) –   Default under – Nature of – Continuing or repetitive –
Held: Clause(c) of s.15-J refers to repetitive nature of default and
not a continuing default – The word “repetitive” as used therein
would refer to a recurring or successive default – This dictum,
however, does not mean that factum of continuing default is not a
relevant factor as Clauses (a) to (c) in s.15-J of the Act are merely
illustrative and are not the only grounds/factors which can be taken
into consideration while determining the quantum of penalty – Words
and Phrases – “repetitive”.
Securities and Exchange Board of India Act, 1992 – s.15-J,
Cl. (a), (b) & (c) and ss.15-A to 15-HA –  Whether power and
discretion vested by s.15-J to decide on the quantum of penalty,
stands eclipsed by the penalty provisions contained in s.15-A to
s.15-HA – Held: ss.15-A(a) to 15-HA have to be read along with
s.15-J in a manner to avoid any inconsistency or repugnancy –
Need to avoid conflict and head-on-clash and construe the said
provisions harmoniously – Explanation to s.15-J added by
Amendment Act No.7 of 2017, has clarified and vested in the
Adjudicating Officer a discretion u/s.15-J on the quantum of penalty
to be imposed while adjudicating defaults u/ss.15-A to 15-HA –
Explanation to s.15-J, which was introduced / added in 2017 for
remova

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