Month: November 2023

oppression and mismanagement

The terms oppression and mismanagement are not defined under the Companies Act, 2013. These terms are to be interpreted by the court depending on the facts of each case. Mismanagement refers to the practice of managing the company incompetently and dishonestly. Violation of Memorandum of Association, Articles of Association, or other statutory provisions would amount to mismanagement. In the case of Elder v. Watson Limited [1952 SC 29 (Scotland)], the term oppression was defined.

“Oppression refers to a misdemeanor committed by majority shareholders upon the minority shareholders of the company.”

Chapter XVI of the Companies Act, 2013 deals with the prevention of oppression and mismanagement. The majority rule is normally followed in the company and thereby, courts do not interfere to protect minority rights. However, the prevention of oppression and mismanagement is an exception to the rule.

Prevention Of oppression and mismanagement- India

The precedent-setting Foss u. Harbottle (1843) 2 461,67 ER 189 stated the principle of preventing oppression and mismanagement. The Honorable Court listed the aspects of the Rule of Majority for the first time in the case that is being appealed. It indicated that a resolution passed by a 3/4th majority of the company’s members would become binding on the organization. At first, the majority members’ (shareholders’) decisions took precedence over the wishes of the minority members.

The 2013 Companies Act’s provisions, however, caused a paradigm shift in this perspective. All of the mandate’s provisions are designed to protect the company’s minority shareholders as well as to support the business’s long-term growth. In the cases of S V Daniel (1978) 2 AllE.R.89 and Greenhalgh v. Arderne Cinemas Ltd L (191951) Ch 286 (1950)2 All ER 1120) on the grounds of fraud on minority, the Hon’ble Court refuted the Foss case on the grounds of wrongdoer’s control.

What constitutes an act Of Oppression in a Company?

An act of oppression typically refers to any behavior that violates the fair dealing principle, including depriving members of their rights, acting in a way that is detrimental to the company’s goals and actions, or taking a highly risky decision. Furthermore, mismanagement encompasses a broad range of behaviors that are difficult to categorize into narrow categories. However, any action that is taken against the company’s goals or the general public can be classified as mismanagement. Mismanagement can also include the improper appointment of a director or the director’s breach of duty. Mismanagement would also be constituted under any intention to defraud the public.

laws on Oppression and Mismanagement in India

According to Section 241 of The Companies Act of 2013, any member who recognizes that mismanagement is occurring may file a complaint with the tribunal. While Section 241 (1B) of the Companies Act of 2013 defines the scope of mismanagement, Section 241 (IA) of the Companies Act of 2013 defines oppression. Afterwards, Section 242 (2) of The Companies Act, 2013 defines the tribunal’s authority. In instances of mismanagement or oppression, the tribunal is empowered to grant relief to the shareholders who have filed complaints. The tribunal can impose rules on the company’s future operations. An additional measure that the tribunal can do is to transfer the company’s shares to another member. It is able to determine if any management member should be fired and to mandate the imposition of such fees. Company acts that are biased and arbitrary are examples of oppression and inadequate management. officials.

The Honorable Court has also actively defined the terms “oppression” and “mismanagement.” This is demonstrated in the case of Rajahmundary Electric Corporation v. Nageshwara RaaC61. In the contested case, the vice chairman of the company erred by taking money from the company for personal use and by doing several other things that did not constitute poor management. The Honorable Court concurred that the vice-chairman and chairman of the company had managerial responsibilities.

In the previously described situation, only an individual may apply to the tribunal in order to file a complaint alleging mismanagement and oppression. A public notice informing all members and depositors of the matter’s admission must be sent out once the application is accepted. Applications that are similar to one another may be tried as a class action lawsuit. (71 Additionally, someone must be chosen to serve as the lead applicant. The tribunal may be required to designate one person as the lead applicant if the applicant does not designate a single individual as the lead.

It Observe that there cannot be more than one application for the same cause of action.t8) Whoever is accountable for oppression or malpractice, or the business itself, shall bear the expense of litigation. The parties must abide by all tribunal orders, and the tribunal would have the last say in all matters. On the other hand, in the event that the parties disregard it, they may face penalties or even jail time. According to the Section 241 Of the Companies Act, 2013, the tribunal should decipher whether an application is made in good faith. If an application is found to be frivolous or vexatious, then for the reasons to be.
recorded in writing, the tribunal may reject the application and may make an order that the applicant shall pay to the opposite party such cost that may be prescribed from time to time.

Additionally, in Cyrus Investments (P) Ltd. v. Tata Sons Ltd., 2008 SCC Online NCLT 24460, the matter concerned the reinstatement of Mr. Cyrus Pallonji Mistry as Executive Chairman of Tata Sons Limited due to his involvement in the unlawful conversion of the company from a “Public Company” to a “Private Company.” For the remainder of his tenure, Mistry will be reinstated as a “Executive Chairman” and subsequently as a “Director” of the Tata Group of Companies, according to the National Company Law Appellate Tribunal.

Difference between oral and documentary Evidence

Documentary evidence:

Documentary evidence: Documentary evidence is defined as follows in Section 3 of the Indian Evidence Act: Documentary evidence is any material that is brought before the court to be examined, verified, or displayed. Electronic records submitted to the court are also covered by this definition. Documentary evidence is covered in Chapter 5 of the Indian Evidence Act. This section includes Sections 61 through 90A. The general guidelines for proving documentary evidence in various contexts are covered in Sections 61 to 73A of the Act. In particular, Sections 61–66 of the Act address how the contents of a document are to be proven. Three sections can be made out of the content of documentary evidence:

b) How the record is to be proved to be authentic?

c) How far and in what instance oral evidence is excluded by documentary evidence?

Sections 74 to 78 deal with public documents and Section 79 to 90-A deal with presumptions as to documents

There is an ancient Roman proverb that is “Vox Audita Perit, Littera Scripta Manet” which means that Spoken Word will Vanish, but the Written Word Remains. Hence the law of evidence recognises the superiority and credibility of documentary evidence as against oral evidence. There are two kinds of documentary evidence:

Public Documents (Section 74)

A certified copy issued by an authority or a reproduction of an entry from a book, record, or public register pertaining to pertinent facts are considered public documents. Public documents include things like birth and marriage certificates, utility bills for public utilities, police station complaints, and more.

Private Documents (Section 75)

Private documents are correspondence between opposing parties in a legal dispute, such as letters, agreements, emails, etc. Because there is a lower assumption that public documents can be tampered with, courts typically favor accepting public documents over private ones. Public documents can also be verified, if needed, by following their provenance to a trustworthy source.

Section 61 provides that the contents in documentary evidence can be proved by

a) Primary Evidence (Section 62)

These are the “original documents” that are produced in the court for inspection. There are 2 special circumstances explained under this section:

When a document is executed in parts. In such cases, each part is the primary evidence of the document.

2. Where several documents are made by one uniform process such as printing, lithography or photography, each is the primary evidence for the contents of the rest.

b) Secondary Evidence (Section 63)

Section 63 of the Act provides Secondary Evidence.

Secondary evidence means and includes:

1.Certified copies.

2.Copies made from the original using a mechanical process while ensuring the accuracy of the copy.

3.Copies made from and compared with the original.

4.Oral accounts of the contents of a document given by some person who has seen it.

When the contents of a document are to be verified by oral evidence then such document becomes secondary evidence

Documentary evidence is any evidence that is, or can be, introduced at a trial in the form of documents, as distinguished from oral testimony . The following are some types of documentary evidence that can be used to prove a case ²:

Official documents: These include powers of attorney, birth and marriage certificates, grants of probate, land certificates, and contracts.
Witness statements: These are written statements made by witnesses who have knowledge of the facts of the case.
Photographs and videos: These can be used to provide visual evidence of the events in question.
Correspondence: This includes letters, emails, and other written communications.
Notes of meetings: These can be used to provide evidence of what was discussed and agreed upon during a meeting.
Medical reports: These can be used to provide evidence of injuries or medical conditions.
Reports by other experts: These can be used to provide expert opinions on technical or scientific matters.
Ledgers and books: These can be used to provide evidence of financial transactions.
Video or audio recordings: These can be used to provide evidence of conversations or events.
Photos or screenshot images: These can be used to provide visual evidence of digital communications.
Physical copies or computer printouts of documents, files, records, messages, or emails: These can be used to provide evidence of digital communications or other records.
Writings on paper: These include invoices, contracts, or wills.
Photographs: These can be used to provide visual evidence of events or conditions.
Tape recordings: These can be used to provide evidence of conversations or events.
Films: These can be used to provide visual evidence of events or conditions.
Printed emails: These can be used to provide evidence of digital communications.

Oral Evidence

Evidence that is restricted to spoken words, gestures, or motion is known as oral evidence. It is evidence that has been personally heard or seen by the witness. Oral evidence must always be direct or positive, which means it goes straight to establishing the main fact in the issue. Section 3 of the Evidence Act 1872 defines evidence as “All statements which the court permits or requires to be made before it by witnesses about matters of fact under inquiry; such statements are called oral evidence.” The word oral indicates something spoken or expressed by mouth, so anything which is accepted in court about the inquiry and expressed by any witnesses who are called in the trial is called oral evidence.

Oral evidence can only be given by such a witness who has heard the crime/ issue themselves. For example, A has heard the conversation of C over the phone to kill B. A will be the witness and give oral Evidence. If it refers to a fact which could be perceived by any other sense or in any other manner, by a witness.

Oral evidence can only be given by such a witness who has sensed the crime/ issue themselves. For Example, A finds the behaviour of B very odd around C who is B’s wife. Later C is found dead. If it refers to an opinion or to the grounds on which that opinion is held by the witness. It means that if a person has an opinion on an incident, it should be solely his opinion based on some grounds then only his testimony will be considered. For Example, If A thinks C is a wicked person and responsible for the incident, then C’s personal opinion shall be considered on those grounds.

Case law of Oral Evidence

Amar Singh v.s Chhaju Singh and another In this case, it was held that a relationship between section 50 and 60 of the Indian Evidence Act has been established which says that for proving evidence completely, two things shall be fulfilled firstly, there shall be a presence of relevant facts and those facts have been presented directly by the person who has either seen them, heard them, etc

There are two forms of evidence that are used in court: written and oral. Said testimony provided by a witness in court, typically under oath, is referred to as oral evidence. It comprises the testimony provided by witnesses during the main, cross-examination, and re-examination stages of the trial. The witness is required to swear or affirm under penalty of law that they will only testify truthfully. Documentary evidence, or evidence presented in the form of papers like contracts, letters, and photos, can be contrasted with oral testimony.

Contrarily, written evidence is defined as that which is provided through written means, including emails, letters, and contracts. Because written evidence offers a tangible record that can be shared, stored, and referred to, it can sometimes be more trustworthy than oral testimony. Oral evidence may be more trustworthy than written evidence, though, since written evidence is susceptible to fabrication and manipulation.

Oral testimony has less weight in court than written testimony. Because the India Evidence Act of 1872’s guiding principle, the “Best Evidence Rule,” is always required by law. Conversely, there are two categories of documentary evidence. Primary evidence is the most trustworthy type of evidence that the court will take into account. When there isn’t any primary evidence, the witnesses’ personal perceptions serve as secondary evidence. The best kind of oral evidence is direct evidence since it is verifiable. Cross-examination of the direct evidence provider is an opportunity to verify its accuracy. However, primary evidence is always the best evidence available.

DIFFERENCE BETWEEN ORAL EVIDENCE AND DOCUMENTARY EVIDENCE

BASIS	ORAL EVIDENCE	DOCUMENTARY EVIDENCE
MEANING	It is given by the witnesses in the court orally that is by mouth.	Documentary evidence that is written evidence is submitted in the court in form of hard papers, documents.
DEFINITION	It is given in section 3 of the act.	It is given in section 3 of the act.
SCOPE	It is included in section 59 and 60.	Written evidence ranges from section 61-66 of the act.
FORM	It has to be given in direct form although few exceptions are there.	It is proved through primary and secondary evidences.
SUBMISSION	It is submitted orally, signs or by gestures.	This is submitted in writing also includes electronic form.

CONCLUSION

Oral and written evidence are both reliable sources of information. However, each person’s power varies depending on the situation and the circumstances. Without a doubt, written evidence in the form of documentary evidence is stronger and more trustworthy than oral testimony. However, courts consider both of these since, in certain cases, it may not be possible to prove a fact through documentary evidence. As a result, each of these has equal weight, and how they are interpreted has opened the door to more equitable justice.

Ashwini Kumar Upadhyay v. Union of India

2022 SCC OnLine SC 1098.

(Delivered on August 26, 2022) Coram : 3-Judge Bench of HM Justices N.V. Ramana, Hima Kohli and C.T. Ravikumar Per Curiam (Full Court’s) Order of Reference

The questions arose in the batch of writ petitions relating to promises made by the political parties for the distribution of free goods (freebies) as part of their election manifesto or during election speeches. Such “freebies” were challenged as having a large-scale impact on the economy of the state, which are made invariably without any assessment of the financial implications on the state but simply for attracting the vote bank.

A request was made for reconsideration of the judgment of S. Subramaniam Balaji v. State of T.N. (2013) 9 SCC 659, wherein the Supreme Court held, while interpreting Section 123 of the Representation of People Act, 1951, that such pre-poll promises for “freebies” do not fall within the ambit of corrupt practices. The Court in S. Subramaniam Balaji had issued directions to the ECI for framing certain guidelines in the absence of any legislative enactment covering the field. The aforementioned reasoning of the Supreme Court in the aforementioned judgment was challenged as having serious ramifications over state policies and that directive principles of state policy override fundamental rights is a proposition erroneously stated in the aforementioned judgment. Accordingly, the issue and the batch of writ petitions were referred to 3-Judge Bench for consideration.

The Insolvency and Bankruptcy Code 2016

The Insolvency and Bankruptcy Code passed by Parliament is a welcome overhaul of the existing framework dealing with the insolvency of corporates, individuals, partnerships, and other entities. It paves the way for much-needed reforms while focusing on creditor-driven insolvency resolution.

BACKGROUND

At present, there are multiple overlapping laws and adjudicating forums dealing with the financial failure and insolvency of companies and individuals in India. The current legal and institutional framework does not aid lenders in the effective and timely recovery or restructuring of defaulted assets and causes undue strain on the Indian credit system. Recognizing that reforms in the bankruptcy and insolvency regime are critical for improving the business environment and alleviating distressed credit markets, the Government introduced the Insolvency and Bankruptcy Code Bill in November 2015, drafted by a specially.
constituted the ‘Bankruptcy Law Reforms Committee’ (BLRC) under the Ministry of Finance. Trilegal worked with the BLRC to assist with the drafting of the bill.
After a public consultation process and recommendations from a joint committee of Parliament, both houses of Parliament have now passed the Insolvency and Bankruptcy Code, 2016 (Code). While the legislation of the Code is a historical development for economic reforms in India, its effect will be seen in due course when the institutional infrastructure and implementing rules as envisaged under the Code are formed.

THE CODE

The Code offers uniform, comprehensive insolvency legislation encompassing all companies, partnerships, and individuals (other than financial firms). The government is proposing a separate framework for bankruptcy resolution for failing banks and financial sector entities.
One of the fundamental features of the Code is that it allows creditors to assess the viability of a debtor as a business decision and agree upon a plan for its revival or a speedy liquidation. The Code creates a new institutional framework, consisting of a regulator, insolvency professionals, information utilities, and adjudicatory mechanisms, that will facilitate a formal and time-bound insolvency resolution process and liquidation.

Insolvency Resolution Process, during which financial creditors assess whether the debtor’s business is viable to continue and the options for its rescue and revival; and
Liquidation: if the insolvency resolution process fails or financial creditors decide to wind down and distribute the assets of the debtor,
(a) The Insolvency Resolution Process (IRP)
The IRP provides a collective mechanism for lenders to deal with the overall distressed position of a corporate debtor. This is a significant departure from the existing legal framework under which the primary onus to initiate a reorganization process lies with the debtor, and lenders may pursue distinct actions for recovery, security enforcement and debt restructuring.
The Code envisages the following steps in the IRP:
(i) Commencement of the IRP
A financial creditor (for a defaulted financial debt) or an operational creditor (for an unpaid operational debt) can initiate an IRP against a corporate debtor at the National Company Law Tribunal (NCLT).
The defaulting corporate debtor, its shareholders or employees, may also initiate voluntary insolvency proceedings.
(ii)Moratorium
The NCLT orders a moratorium on the debtor’s operations for the period of the IRP. This operates as a ‘calm period’ during which there are there are there are no judicial proceedings for recovery, enforcement of security interest, sale or transfer of assets, or termination of essential contracts can take place against the debtor.
(iii) Appointment of Resolution Professional
The NCLT appoints an insolvency professional or ‘Resolution Professional’ to administer the IRP. The Resolution Professional’s primary function is to take over the management of the corporate borrower and operate its business as a going concern under the broad directions of a committee of creditors. This is similar to the approach under the UK insolvency laws, but distinct from the “debtor in possession” approach under Chapter 11 of the US bankruptcy code. Under the US bankruptcy code, the debtor’s
management retains control while the bankruptcy professional only oversees the business in order to prevent asset stripping on the part of the promoters.
Therefore, the thrust of the Code is to allow a shift of control from the defaulting debtor’s management to its creditors, where the creditors drive the business of the debtor with the Resolution Professional acting as their agent.
(vi) Creditors Committee and Revival Plan

The Resolution Professional identifies the financial creditors and constitutes a creditors committee. Operational creditors above a certain threshold are allowed to attend meetings of the committee but do not have voting power. Each decision of the creditors committee requires a 75% majority vote. Decisions of the creditors committee are binding on the corporate debtor and all its creditors.
The creditors committee considers proposals for the revival of the debtor and must decide whether to proceed with a revival plan or liquidation within a period of 180 days (subject to a one-time extension by 90 days). Anyone can submit a revival proposal, but it must necessarily provide for payment of operational debts to the extent of the liquidation waterfall.
The Code does not elaborate on the types of revival plans that may be adopted, which may include fresh finance, sale of assets, haircuts, change of management etc.

(b) Liquidation
Under the Code, a corporate debtor may be put into liquidation in the following scenarios:
(i) A 75% majority of the creditor’s committee resolves to liquidate the corporate debtor at any time during the insolvency resolution process.
(ii)The creditor’s committee does not approve a resolution plan within 180 days (or within the extended 90 days).
(iii) The NCLT rejects the resolution plan submitted to it on technical grounds; or
(vii) The debtor contravenes the agreed resolution plan, and an affected person makes an application to the NCLT to liquidate the corporate debtor.
Once the NCLT passes an order of liquidation, a moratorium is imposed on the pending legal proceedings against the corporate debtor, and the assets of the debtor (including the proceeds of liquidation) vest in the liquidation estate.

Priority of Claims
The Code significantly changes the priority waterfall for distribution of liquidation proceeds. After the costs of insolvency resolution (including any interim finance), secured debt together with workmen dues for the preceding 24 months rank highest in priority. Central and state Government dues stand below the claims of secured creditors, workmen dues, employee dues and other unsecured financial creditors. Under the earlier regime, Government dues were immediately below the claims of secured
creditors and workmen in order of priority.
Upon liquidation, a secured creditor may choose to realise his security and receive proceeds from the sale of the secured assets in first priority. If the secured creditor enforces his claims outside the liquidation, he must contribute any excess proceeds to the liquidation trust. Further, in case of any shortfall in recovery, the secured creditors will be junior to the unsecured creditors to the extent of the shortfall.

Insolvency Resolution Process for Individuals/Unlimited Partnerships
For individuals and unlimited partnerships, the Code applies in all cases where the minimum default amount is INR 1000 (USD 15) and above (the Government May later revise the minimum amount of default to a higher threshold). The Code envisages two distinct processes in case of insolvencies: automatic fresh start and insolvency resolution.
Under the automatic fresh start process, eligible debtors (basis gross income) can apply to the Debt Recovery Tribunal (DRT) for discharge from certain debts not exceeding a specified threshold, allowing them to start afresh.
The insolvency resolution process consists of preparation of a repayment plan by the debtor, for approval of creditors. If approved, the DRT passes an order binding the debtor and creditors to the repayment plan.
If the plan is rejected or fails, the debtor or creditors may apply for a bankruptcy order.
Institutional Infrastructure
(a) The Insolvency Regulator
The Code provides for the constitution of a new insolvency regulator i.e., the Insolvency and Bankruptcy Board of India (Board). Its role includes: (i) overseeing the functioning of insolvency intermediaries i.e., insolvency professionals, insolvency professional agencies and information utilities; and (ii) regulating the insolvency process.
(b) Insolvency Resolution Professionals
The Code provides for insolvency professionals as intermediaries who would play a key role in them efficient working of the bankruptcy process. The Code contemplates insolvency professionals as a classm of regulated but private professionals having minimum standards of professional and ethical conduct.
In the resolution process, the insolvency professional verifies the claims of the creditors, constitutes a creditors committee, runs the debtor’s business during the moratorium period and helps the creditors in reaching a consensus for a revival plan. In liquidation, the insolvency professional acts as a liquidator and bankruptcy trustee.
(c) Information Utilities
A notable feature of the Code is the creation of information utilities to collect, collate, authenticate and disseminate financial information of debtors in centralised electronic databases. The Code requires creditors to provide financial information of debtors to multiple utilities on an ongoing basis. Such information would be available to creditors, resolution professionals, liquidators and other stakeholders in insolvency and bankruptcy proceedings. The purpose of this is to remove information asymmetry and dependency on the debtor’s management for critical information that is needed to swiftly resolve insolvency. (d) Adjudicatory authorities: The adjudicating authority for corporate insolvency and liquidation is the NCLT. Appeals from NCLT orders lie to the National Company Law Appellate Tribunal and thereafter to the Supreme Court of India. For individuals and other persons, the adjudicating authority is the DRT, appeals lie to the Debt Recovery Appellate Tribunal and thereafter to the Supreme Court. In keeping with the broad philosophy that insolvency resolution must be commercially and professionally driven (rather than court driven), the role of adjudicating authorities is limited to ensuring due process rather than adjudicating on the merits of the insolvency resolution.

Winding up of company

In the words of Prof. L.C.B. Gower, the winding-up of a company is the process whereby its life is ended, and its property administered for the benefit of its creditors and members. A liquidator is appointed, and he takes control of the company, collects its debts, and finally distributes any surplus among the members in accordance with their rights. The main purpose of winding up a company is to realize its assets and pay its debts expeditiously and fairly in accordance with the law. The Companies Act, 2013 provides for an effective time-bound winding-up process.

Under the process, the life of the company is ended, and its property is administered for the benefit of the members and creditors. A liquidator is appointed to realise the assets and properties of the company. After payment of the debts, any surplus of assets left out will be distributed among the members according to their rights. Winding up does not necessarily mean that the company is insolvent. A perfectly solvent company may be wound up with the approval of members in a general meeting.

As per Section 2(94A) of the Companies Act, 2013, “winding up” means winding up under this Act or liquidation under the Insolvency and Bankruptcy Code, 2016. Thus, winding up ultimately leads to the dissolution of the company. In between winding up and dissolution, the legal entity of the company remains, and it can be sued in a Tribunal of law.

The meaning of dissolution

A company is said to be dissolved when it ceases to exist as a corporate entity. On dissolution, the company’s name shall be struck off by the Registrar from the Register of Companies and he shall also get this fact published in the Official Gazette. The dissolution thus puts an end to the existence of the company.

Modes of dissolution

Dissolution of a company may be brought about in any of the following ways:

Through transfer of a company’s undertaking to another under a scheme of reconstruction or amalgamation. In such a case the transferor company will be dissolved by an order of the Tribunal without being wound up.
Through the winding up of the company, wherein assets of the company are realized and applied towards the payment of its liabilities. The surplus, if any is distributed to the members of the company, in accordance with their rights.

Difference between dissolution and winding up.

Particulars	Winding up	Dissolution
Meaning	Winding up means appointing a liquidator to sell off the assets, divide the proceeds among creditors, and file to the NCLT for dissolution.	Dissolution means to dissolve the company completely. Any further operations cannot be done in the company name.
Process	Winding up is one of the methods through which the dissolution of a company is carried on.	Dissolution is the end process/result of winding up and getting the name stuck off from the Register of Companies.
Existence of Company	The legal entity of the company continues and exists at the commencement and during the winding up process.	The dissolution of the company brings an end to its legal entity status.
Continuation of Business	A company can be allowed to continue its business during the winding up process if it is required for the beneficial winding up of the company.	The company ceases to exist upon its dissolution.
Moderator	Liquidator carries out the process of winding up.	The NCLT passes the order of dissolution.
Activities Included	Filling of winding up resolution or petition, the appointment of the liquidator, receiving declarations, preparation of reports, disclosures to ROC and filing for dissolution to the NCLT.	Filing of resolutions, declarations and other required documents to the NCLT to pass dissolution order.

Modes of winding up

A company may be wound up in any of the following two ways:

Compulsory winding up. (Sec. 272)
Liquidation under Insolvency and Bankruptcy Code, 2016.

Grounds of Winding up

As per section 271, Tribunal may order for the winding up of a company on a petition submitted to it
under section 272 on any of the following grounds:

Passing of special resolution for the winding up. When a company has by passing a special resolution resolved to be wound up by the Tribunal, winding up order may be made by the Tribunal. The resolution may be passed for any cause whatever. Tribunal may not order for the winding up if it finds it to be opposed to public interest or the interest of the company as a whole.
Inability to pay debts. As per section 271(2), a company shall be deemed to be unable to pay its debts under the following circumstances:
a) Notice for payment. If a creditor to whom the company owes a sum exceeding one lakh rupees has served on the company a demand for payment and the company has for three weeks thereafter neglected to pay the sum or otherwise satisfy the creditor, it shall be deemed that the company has become unable to pay its debt. It is essential that the debt is payable presently. Negligence in paying a debt on demand is omitting to pay without reasonable cause. Mere omission by itself will not amount to negligence. Further, where a debt is bonafide disputed, there is no negligence to pay. Failure to pay public deposits on their due dates amount to inability to pay debts. A dividend when declared becomes a debt due by the company and the shareholder can also apply for company’s liquidation if the company is unable to pay his dividend.

b) Decree. If a decree or order issued by a Tribunal/court in favour of a creditor of the company on execution remains unsatisfied on its execution.

c) Commercial Insolvency. It is proved to the satisfaction of the Tribunal that the company cannot pay its debts. This implies commercial insolvency (when company’s assets are insufficient to meet its existing liabilities) of the company as is disclosed by its balance sheet. The mere fact that the company is incurring losses does not mean that it is unable to pay its debts, for its assets may be more than its liabilities. Liabilities for this purpose will include all contingent and prospective liabilities and even if the debt relied upon in the petition is disputed bona fide, the company may be wound up if the applicant can prove the insolvency of the company. However, non-payment of a bona fide disputed claim is no proof of insolvency.

Just and equitable. The Tribunal may order for the winding up of a company if it thinks that there are just and equitable grounds for doing so. The Tribunal has very large discretionary power in this case. This power has been given to the Tribunal to safeguard the interests of the minority and the weaker group of members. Tribunal, before passing such an order, will take into account the interest of the shareholders, creditors, employees and also the general public. Tribunal may also refuse to grant an order for the compulsory winding up of the company if it is of the opinion that some other remedy is available to the petitioner to redress his grievances and that the demand for the winding up of the company is unreasonable. A few of the examples of ‘just and equitable’
grounds on the basis of which the Tribunal may order for the winding up of the company are given:
(i) Oppression of minority. In cases where those who control the company abuse their power to such an extent that it seriously prejudices the interests of minority shareholders, the Tribunal may order for the winding up of the company.
(ii) Deadlock in management. Where there is a complete deadlock in the management of the company, the company may be ordered to be wound up.
(iii) Loss of substratum. Where the objects for which a company was constituted have either failed or become substantially impossible to be carried out, i.e., ‘substratum of the company’ is lost.
(iv) Losses. When the business of a company cannot be carried on except at a loss, the company may be wound up by an order of the Tribunal on just and equitable grounds. But mere apprehension on the part of some shareholders that the company will not be able to earn profits cannot be just and equitable ground for the winding up order.

(v) Fraudulent object. If the business or the objects of the company are fraudulent or illegal or have become illegal with the changes in the law, the Tribunal may order the company to be wound up on just and equitable grounds. However, the mere fact of having been a fraud in the promotion or fraudulent misrepresentation in the prospectus will not be sufficient ground for a winding up order, for the majority of shareholders may waive the fraud.

4. If the company has made a default in filing with the Registrar its financial statements or annual returns for immediately preceding five consecutive financial years.

5. If the company has acted against the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality.

6. If on an application made by the Registrar or any other person authorized by the Central Government by notification under this Act, the Tribunal is of the opinion that the affairs of the company have been conducted in a fraudulent manner or the company was formed for fraudulent and unlawful purpose or the persons concerned in the formation or management of its affairs have been guilty of fraud, misfeasance or misconduct in connection therewith and that it is proper that the company be wound up.

Example: Re. Yenidje Tobacco Ltd. W and R were the only two shareholders as well as the directors of a private company. Subsequently some serious differences developed, and they became hostile to each other. They stopped even talking to each other. It was held that there was complete deadlock in the management of the company and, therefore, it would be just and equitable to order for its winding up.

Who may file petition?

An application for the winding up of a company has to be made by way of petition to the Court. A
petition may be presented under Section 272 by any of the following persons:
(a) the company; or
(b) any creditor or creditors.
(c) any contributory or contributories.
(d) all or any of the parties specified above in clauses (a), (b), (c) together
(e) the Registrar.
(f) any person authorized by the Central Government in that behalf.
(g) by the Central Government or State Government in case of company acting against the interest of the sovereignty and integrity of India. Section 272 provides that the petition for compulsory winding up of a company may be filed in the tribunal by any of the following persons:

Company. A company can make a petition to the Tribunal for its winding up by an order of the Tribunal, when the members of the company have resolved by passing a special resolution to wind up the affairs of the company. Managing director or the directors cannot file such a petition on their own account unless they do it on behalf of the company and with the proper authority of the members in the general meeting. (Section 272(5))
Creditors. A creditor may make a petition to the Tribunal for the winding up of the company, when he is able to prove that the company is unable to pay off his debts exceeding Rs. 1, 00,000 within three weeks of the notice of demand or where a decree or any other process issued by the Tribunal in favour of a creditor of a company is returned unsatisfied in whole or in part. Law does not recognize any difference between the secured and unsecured creditors for this purpose. ‘A secured creditor is as much entitled as of right to file a petition as an unsecured creditor.’ But in case of secured creditor’s petition, winding up order shall not be made where the security is adequate, and no other creditor supports the petition.
A contingent or prospective creditor can also file a winding up petition if he obtains the prior consent of the Tribunal. The Tribunal shall grant the permission only when:
(i) It is satisfied that there is a prima facie case for the winding up of the company; and
(ii) The creditor provides such security for costs as the Tribunal thinks reasonable.
The Tribunal may, before passing a winding up order, on a creditor’s petition, ascertain the wishes of other creditors. If the majority of the creditors in value oppose, and the Tribunal having regard to the company’s assets and liabilities considers the opposition reasonable, it may refuse to pass a winding up order.
Contributories. A contributory3 shall be entitled to present a petition for the winding up of a company, notwithstanding that he may be the holder of fully paid-up shares, or that the company may have no assets at all or may have no surplus assets left for distribution among the shareholders after the satisfaction of its liabilities, and shares in respect of which he is a contributory or some of them were either originally allotted to him or have been held by him, and registered in his name,
for at least six months during the eighteen months immediately before the commencement of the winding up or have devolved on him through the death of a former holder. (Section 272(3))
Registrar. Registrar may with the previous sanction of the Central Government make petition to the Tribunal for the winding up the company only in the following cases:
a) when it appears that the company has become unable to pay debts from the accounts of the company or from the report of the inspectors appointed by the Central Government under section 210; or
b) If the company has made a default in filing with the Registrar its financial statements or annual returns for immediately preceding five consecutive financial years.
c) if the company has acted against the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality.
d) if on an application made by the Registrar or any other person authorized by the Central
Government by notification under this Act, the Tribunal is of the opinion that the affairs of the company have been conducted in a fraudulent manner or the company was formed for fraudulent and unlawful purpose, or the persons concerned in the formation or management of its affairs have been guilty of fraud, misfeasance or misconduct in connection therewith and that it is proper that the company be wound up.

X v. Health & Family Welfare Department 2022 SCC online SC 905

(Delivered on July 21, 2022) Coram: 3-Judge Bench of HM Justices D.Y. Chandrachud, Surya Kant and A.S. Bopanna Authored by: HM Justice D.Y. Chandrachud.

The question that was brought before the court was whether Rule 3(b) of the Medical Termination of Pregnancy Rules, 2003 (“the MTP Rules”) could be applied to an unmarried woman in order to allow her to end her pregnancy in compliance with Section 3(2)(b) of the Medical Termination of Pregnancy Act, 1971 (“MTP Act”).

The petitioner was denied the opportunity to abort the fetus in her womb on the ground that she was an unmarried lady and not covered by the provisions of Rule 3(b). The Court held that the High Court took an extremely restrictive and narrow pedantic view of Rule 3(b), excluding unmarried women from its ken.

Referring to Explanation 1 and the phrase employed therein, “women or her partner,” the Court held that the section intends to cover all categories of women within its purview, whosoever wants to get their fetus aborted for an unwanted pregnancy. The court compared the provisions of the pre-amendment and the post-amendment modifications to Section 3 of the MTP Act, wherein prior to the amendment the word “women or her partner” was not existing but was substituted through the amendment of 2021.

Holding women’s rights to their reproductive choice as an inseparable and inseparable part of their personal liberty, under Article 21, it was held that women have a sacrosanct right to their bodily integrity. Referring to the long line of judgments of Suchita Srivastava v. Chandigarh (2009) 9 SCC 1

Admn., K.S. Puttaswamy v. Union of India, (2017) 10 SCC 1. and the High Court on its own Motion v. State of Maharashtra, 2016 SCC Online Bom 8426. the Court held that if the woman does not want to continue her pregnancy, then forcing her to do so violates her bodily integrity and aggravates her mental trauma, which would be deleterious to her mental health. Engagement in premarital sex cannot be labelled as vicious or criminal in nature only because notions of social morality are totally subjective.

In light of the fact that the rules, when read in conjunction with Section 3(2)(b) of the MTP Act, expressly envision and include single women within their scope and jurisdiction, the women’s plea was granted, and the High Court’s decision was overturned. Subject to the Medical Board’s assessment at AIIMS Delhi, she was granted permission to abort as a temporary measure

Salient features of Evidence Act

Meaning :

Procedural laws define the rules by which substantial laws may be enforced. Thus, the Evidence Act is essentially a procedural law. The Latin term “evident,” also known as to prove or to show clearly,

It makes sense that courts base their decisions on the evidence, and the relevant laws provide guidance. One such law is the Indian Evidence Act of 1872, which specifies in great detail the types of evidence that are acceptable in court. In criminal cases, the gathering of evidence starts as soon as the police officials receive the First Information Report (FIR). The parties must independently provide pertinent evidence to support their position in civil proceedings. In most civil cases, the state does not have the police-like authority to help with evidence collection.

NATURE OF LAW EVIDENCE

The most significant position in a adjective law is held by the law of evidence. The courts are responsible for determining whether or not specific facts exist, applying substantive law to the facts, and stating the parties’ rights and obligations to the extent that those facts affect them. Evidence is the way through which the courts are informed that these facts exist.

OBJECT OF LAW OF EVIDENCE

Preventing errors in evidence admissibility and implementing a more accurate and consistent set of guidelines are the court’s goals.

History of Indian Evidence Act, 1872

Facts, data, and other supporting evidence are always needed in arguments in order to establish the position being argued. To determine whether, why, and how things happen, it is based on logical reasoning and common sense. Evidence that leads to the truth, or “saakshya,” was prized even in Dharma-ruled ancient India. Since nobody could go back in time to witness the scene again, it is essential to remember the circumstances, objects, and people that prove the sequence of events in an act in order to establish the truth. Even during the Muslim dynasty, there were indications left behind.

The Indian Evidence Act, 1872, is credited to Sir James Fitz James Stephens and was passed during British rule in India. Even though the English government introduced it, it is still appropriate for India’s current legal system. The law of evidence has changed significantly over the last 75 years of legal evolution and independence as a result of amendments and case laws.

Main Features of Indian Evidence Act

In India, the Evidence Act is applicable to all court proceedings. Court martials are also included in this term. Affidavits filed with a court or before an officer are examples of exceptions, as are proceedings before arbitrators.
The Act and the development of criminal law go hand in hand.
Regarding the latest developments in technology, the applicability of electronic evidence is also examined.
The Indian Evidence Act recognizes the relative importance of first-hand witness testimony over hearsay. This reinforces the significance of concrete, authentic evidence.
Additionally, the law of evidence recognizes and makes provisions for the distinctions between civil and criminal law.
The Act also states whether a fact can be proven, refuted, or left unproven based on the evidence at hand.
In criminal cases, where one party is accusing the other, the prosecution bears the burden of proof; in civil cases, the burden of proof is with the plaintiff seeking relief.
The Evidence Act of 1872 makes clear the conditions under which the burden of proof is shifted by a particular fact.
Under the 1872 Act, suspects’ confessions made outside of court are not considered credible evidence against the accused.
The Act uses the phrase “court may presume” to validate circumstances, giving the judicial officer the discretion to accept or reject particular evidence.
Conversely, phrases such as “must presume” impose an obligation on the judge to accept particular evidence while leaving no room for discretion.
In terms of court evidence, the Act is not definitive. Additional laws, such as the Code of Civil Procedure, the Indian Penal Code, the Indian Stamps Act, etc., also supplement relevant provisions.

Conclusion:

The facts and information offered on this legal blog are only a small portion of what the Indian Evidence Act is all about. For someone to represent a client in court, it is not sufficient to understand the offense and its components. Understanding the procedure, what is permissible according to it, and the phases of procedural law that limit particular aspects are all crucial. Particularly for criminal advocates, illicit production of evidence may tip the scales in your favor even if the case overall is against your client. The secret is to prepare the case thoroughly and to be aware of all relevant laws, such as the Evidence Act.

The Securities and Exchange Board of India Act, 1992 (Bare Act)

An Act to provide for the establishment of a Board to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith or incidental thereto.

CHAPTER I

Preliminary1. Short title, extent and commencement. – (1) This Act may be called The Securities and Exchange Board of India Act, 1992.(2) It extends to the whole of India.(3) It shall be deemed to have come into force on the 30th day of January, 1992.

2. Definitions. – (1) In this Act, unless the context otherwise requires,-

(a) “Board” means the Securities and Exchange Board of India established under section 3;

(b) “Chairman” means the Chairman of the Board;

[(ba) “collective investment scheme” means any scheme or arrangement which satisfies the conditions specified in section 11-AA;]

(c) “existing Securities and Exchange Board” means the Securities and Exchange Board of India constituted under the Resolution of the Government of India in the Department of Economic Affairs No. 1 (44) SE/86, dated the 12th day of April, 1988;

(d) “Fund” means the Fund constituted under section 14;

(e) “member” means a member of the Board and includes the Chairman;

(f) “notification” means a notification published in the Official Gazette;

(g) “prescribed” means prescribed by rules made under this Act;

(h) “regulations” means the regulations made by the Board under this Act;

[(ha) “Reserve Bank” means the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934);]

(i) “securities” has the meaning assigned to it in section 2 of the Securities Contracts (Regulation) Act, 1956.[(2) Words and expressions used and not defined in this Act but defined in][the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the Depositories Act, 1996 (22 of 1996)][shall have the meanings respectively assigned to them in that Act.]

Establishment Of The Securities And Exchange Board Of India

3. Establishment and incorporation of Board. – (1) With effect from such date as the Central Government may, by notification, appoint, there shall be established, for the purposes of this Act, a Board by the name of the Securities and Exchange Board of India.(2) The Board shall be a body corporate by the name aforesaid, having perpetual succession and a common seal, with power subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to contract, and shall, by the said name, sue or be sued.(3) The head office of the Board shall be at Bombay.(4) The Board may establish offices at other places in India.

4. Management of the Board. – (1) The Board shall consist of the following members, namely:-

(a) a Chairman;

(b) two members from amongst the officials of the [Ministry] of the Central Government dealing with finance [and administration of the Companies Act, 1956 (1 of 1956)] ;

[(d) five other members of whom at least three shall be the whole-time members,]to be appointed by the Central Government.(2) The general superintendence, direction and management of the affairs of the Board shall vest in a Board of members, which may exercise all powers and do all acts and things which may be exercised or done by the Board.(3) Save as otherwise determined by regulations, the Chairman shall also have powers of general superintendence and direction of the affairs of the Board and may also exercise all powers and do all acts and things which may be exercised or done by that Board.(4) The Chairman and members referred to in clauses (a) and (d) of sub-section (1) shall be appointed by the Central Government and the members referred to in clauses (b) and (c) of that sub-section shall be nominated by the Central Government and the [Reserve Bank] respectively.(5) The Chairman and the other members referred to in clauses (a) and (d) of sub-section (1) shall be persons of ability, integrity and standing who have shown capacity in dealing with problems relating to securities market or have special knowledge or experience of law, finance, economics, accountancy, administration or in any other discipline which, in the opinion of the Central Government, shall be useful to the Board.

5. Term of office and conditions of service of Chairman and members of the Board. – (1) The term of office and other conditions of service of the Chairman and the members referred to in clause (d) of sub-section (1) of section 4 shall be such as may be prescribed.(2) Notwithstanding anything contained in sub-section (1), the Central Government shall have the right to terminate the services of the Chairman or a member appointed under clause (d) of sub-section (1) of section 4, at any time before the expiry of the period prescribed under sub-section (1), by giving him notice of not less than three months in writing or three months’ salary and allowances in lieu thereof, and the Chairman or a member, as the case may be, shall also have the right to relinquish his office, at any time before the expiry of the period prescribed under sub-section (1), by giving to the Central Government notice of not less than three months in writing.

6. Removal of member from office. – [*] The Central Government shall remove a member from office if he-

(a) is, or at any time has been, adjudicated as insolvent;

(b) is of unsound mind and stands so declared by a competent Court;

[* * * *]

(e) has, in the opinion of the Central Government, so abused his position as to render his continuation in office detrimental to the public interest:Provided that no member shall be removed under this clause unless he has been given a reasonable opportunity of being heard in the matter.

7. Meetings. – (1) The Board shall meet at such times and places, and shall observe such rules of procedure in regard to the transaction of business at its meetings (including quorum at such meetings) as may be provided by regulations.(2) The Chairman or, if for any reason, he is unable to attend a meeting of the Board, any other member chosen by the members present from amongst themselves at the meeting shall preside at the meeting.(3) All questions which come up before any meeting of the Board shall be decided by a majority votes of the members present and voting, and, in the event of an equality of votes, the Chairman, or in his absence, the person presiding, shall have a second or casting vote

.[7A. Member not to participate in meetings in certain cases. – Any member, who is a director of a company and who as such director has any direct or indirect pecuniary interest in any matter coming up for consideration at a meeting of the Board, shall, as soon as possible after relevant circumstances have come to his knowledge, disclose the nature of his interest at such meeting and such disclosure shall be recorded in the proceedings of the Board and the member shall not take any part in any deliberation or decision of the Board with respect to that matter.]

8. Vacancies, etc., not to invalidate proceedings of Board. – No act or proceeding of the Board shall be invalid merely by reason of-

(a) any vacancy in, or any defect in the constitution of, the Board; or

(b) any defect in the appointment of a person acting as a member of the Board; or

9. Officers and employees of the Board. – (1) The Board may appoint such other officers and employees as it considers necessary for the efficient discharge of its functions under this Act.(2) The term and other conditions of service of officers and employees of the Board appointed under sub-section (1) shall be such as may be determined by regulations.

CHAPTER III

Transfer Of Assets, Liabilities, Etc., Of The Existing Securities And Exchange Board To The Board

10. Transfer of assets, liabilities, etc., of existing Securities and Exchange Board to the Board. – (1) On and from the date of establishment of the Board,-

(a) any reference to the existing Securities and Exchange Board in any law other than this Act or in any contract or other instrument shall be deemed as a reference to the Board;

(b) all properties and assets, movable and immovable, of, or belonging to, the existing Securities and Exchange Board, shall vest in the Board;

(c) all rights and liabilities of the existing Securities and Exchange Board shall be transferred to, and be the rights and liabilities of, the Board;

(d) without prejudice to the provisions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all matters and things engaged to be done by, with or for the existing Securities and Exchange Board immediately before that date, for or in connection with the purpose of the said existing Board shall be deemed to have been incurred, entered into or engaged to be done by, with for, the Board;

(e) all sums of money due to the existing Securities and Exchange Board immediately before that date shall be deemed to be due to the Board;

(f) all suits and other legal proceedings instituted or which could have been instituted by or against the existing Securities and Exchange Board immediately before that date may be continued or may be instituted by or against the Board; and

(g) every employee holding any office under the existing Securities and Exchange Board immediately before that date shall hold his office in the Board by the same tenure and upon the same terms and conditions of service as respects remuneration, leave, provident fund, retirement and other terminal benefits as he would have held such office if the Board had not been established and shall continue to do so as an employee of the Board or until the expiry of the period of six months from that date if such employee opts not to be the employee of the Board within such period.(2) Notwithstanding anything contained in the Industrial Disputes Act, 1947, or in any other law for the time being in force, absorption of any employee by the Board in its regular service under this section shall not entitle such employee to any compensation under that Act or other law and no such claim shall be entertained by any Court, tribunal or other authority.

CHAPTER IV

Powers And Functions Of The Board\

I1. Functions of Board. – (1) Subject to the provisions of this Act, it shall be the duty of the Board to protect the interest of investors in securities and to promote the development of, and to regulate the securities market, by such measures as it thinks fit.(2) Without prejudice to the generality of the foregoing provisions, the measures referred to therein may provide for-

(a) regulating the business in stock exchanges and any other securities markets;I

(b) registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner;

[(ba) registering and regulating the working of the] [depositories, participants, custodians] [of securities, foreign institutional investors, credit rating agencies and such other intermediaries as the Board may, by notification specify in this behalf;]

(c) registering and regulating the working of [venture capital funds and collective investment schemes] , including mutual funds;

(d) promoting and regulating self-regulatory organisations;

(e) prohibiting fraudulent and unfair trade practices relating to securities markets;

(f) promoting investors’ education and training of intermediaries of securities markets;

(g) prohibiting insider trading in securities;

(h) regulating substantial acquisition of shares and take-over of companies;

(i) calling for information from, undertaking inspection, conducting inquiries and audits of the [stock exchanges, mutual funds, other persons associated with the securities market] intermediaries and self-regulatory organisations in the securities market;

[(ia) calling for information and records from any person including any bank or any other authority or board or corporation established or constituted by or under any Central or State Act which, in the opinion of the Board, shall be relevant to any investigation or inquiry by the Board in respect of any transaction in securities]

[(ib) calling for information from, or furnishing information to, other authorities, whether in India or outside India, having functions similar to those of the Board, in the matters relating to the prevention or detection of violations in respect of securities laws, subject to the provisions of other laws for the time being in force in this regard:

Provided that the Board, for the purpose of furnishing any information to any authority outside India, may enter into an arrangement or agreement or understanding with such authority with the prior approval of the Central Government]

(j) performing such functions and exercising such powers under the provisions of [* * *] the Securities Contracts (Regulation) Act, 1956, as may be delegated to it by the Central Government;

(k) levying fees or other charges for carrying out the purposes of this section;

(l) conducting research for the above purposes;

[(la) calling from or furnishing to any such agencies, as may be specified by the Board, such information as may be considered necessary by it for the efficient discharge of its functions;]

(m) performing such other functions as may be prescribed.[(2-A) Without prejudice to the provisions contained in sub-section (2), the Board may take measures to undertake inspection of any book, or register, or other document or record of any listed public company or a public company (not being intermediaries referred to in section 12) which intends to get its securities listed on any recognised stock exchange where the Board has reasonable grounds to believe that such company has been indulging in insider trading or fraudulent and unfair trade practices relating to securities market.][(3) Notwithstanding anything contained in any other law for the time being in force while exercising the powers under][clause (i) or clause (ia) of sub-section (2) or sub-section (2-A)], [the Board shall have the same powers as are vested in a civil Court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit, in respect of the following matters, namely:-(i) the discovery and production of books of account and other documents, at such place and such time as may be specified by the Board;(ii) summoning and enforcing the attendance of persons and examining them on oath;

(iii) inspection of any books, registers and other documents of any person referred to in section 12, at any place;]

(iv) inspection of any book, or register, or other document or record of the company referred to in sub-section (2-A);

(v) issuing commissions for the examination of witnesses or documents.[(4) Without prejudice to the provisions contained in sub-sections (1), (2), (2-A) and (3) and section 11-B, the Board may, by an order, for reasons to be recorded in writing, in the interests of investors or securities market, take any of the following measures, either pending investigation or inquiry or on completion of such investigation or inquiry, namely:-(a) suspend the trading of any security in a recognised stock exchange;(b) restrain persons from accessing the securities market and prohibit any person associated with securities market to buy, sell or deal in securities;(c) suspend any office-bearer of any stock exchange or self-regulatory organisation from holding such position;(d) impound and retain the proceeds or securities in respect of any transaction which is under investigation;

[(e) attach, for a period not exceeding ninety days, bank accounts or other property of any intermediary or any person associated with the securities market in any manner involved in violation of any of the provisions of this Act, or the rules or the regulations made thereunder:Provided that the Board shall, within ninety days of the said attachment, obtain confirmation of the said attachment from the Special Court, established under section 26A, having jurisdiction and on such confirmation, such attachment shall continue during the pendency of the aforesaid proceedings and on conclusion of the said proceedings, the provisions of section 28A shall apply:Provided further that only property, bank account or accounts or any transaction entered therein, so far as it relates to the proceeds actually involved in violation of any of the provisions of this Act, or the rules or the regulations made thereunder shall be allowed to be attached.]

(f) direct any intermediary or any person associated with the securities market in any manner not to dispose of or alienate an asset forming part of any transaction which is under investigation:Provided that the Board may, without prejudice to the provisions contained in sub-section (2) or sub-section (2-A), take any of the measures specified in clause (d) or clause (e) or clause (f), in respect of any listed public company or a public company (not being intermediaries referred to in section 12) which intends to get its securities listed on any recognised stock exchange where the Board has reasonable grounds to believe that such company has been indulging in insider trading or fraudulent and unfair trade practices relating to securities market:Provided further that the Board shall, either before or after passing such orders, give an opportunity of hearing to such intermediaries or persons concerned.][(4A) without prejudice to the provisions contained in sub-sections (1), (2), (2A), (3) and (4), section 11B and section 15-I, the Board may, by an order for reasons to be recorded in writing, levy penalty under sections 15A, 15B, 15C, 15E, 15EA, 15EB, 15F, 15G, 15H, 15HA and 15HB after holding an inquiry in the prescribed manner.][(5) The amount disgorged, pursuant to a direction issued, under section 11B of this Act or section 12A of the Securities Contracts (Regulation) Act, 1956 or section 19 of the Depositories Act, 1996, [or under a settlement made under section 15JB or section 23JA of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or section 19-IA of the Depositories Act, 1996 (22 of 1996)] as the case may be, shall be credited to the Investor Protection and Education Fund established by the Board and such amount shall be utilised by the Board in accordance with the regulations made under this Act.]

[11A. Board to regulate or prohibit issue of prospectus, offer document or advertisement soliciting money for issue of securities. – (1) Without prejudice to the provisions of the Companies Act, 1956 (1 of 1956), the Board may, for the protection of investors,-

(a) specify, by regulations-

(i) the matters relating to issue of capital, transfer of securities and other matters incidental thereto; and

(ii) the manner in which such matters shall be disclosed by the companies;

(b) by general or special orders-

(i) prohibit any company from issuing prospectus, any offer document, or advertisement soliciting money from the public for the issue of securities;

(ii) specify the conditions subject to which the prospectus, such offer document or advertisement, if not prohibited, may be issued.(2) Without prejudice to the provisions of section 21 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Board may specify the requirements for listing and transfer of securities and other matters incidental thereto.]

[11AA. Collective investment scheme. – (1) Any scheme or arrangement which satisfies the conditions referred to in sub-section (2) [or sub-section (2A)] shall be a collective investment scheme.[Provided that any pooling of funds under any scheme or arrangement, which is not registered with the Board or is not covered under sub-section (3), involving a corpus amount of one hundred crore rupees or more shall be deemed to be a collective investment scheme.](2) Any scheme or arrangement made or offered by any [person] under which,-

(i) the contributions, or payments made by the investors, by whatever name called, are pooled and utilized for the purposes of the scheme or arrangement;

(ii) the contributions, or payments made to such scheme or arrangement by the investors with a view to receive profits, income, produce or property, whether movable or immovable, from such scheme or arrangement;

(iii) the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors;

(iv) the investors do not have day-to-day control over the management and operation of the scheme or arrangement.[(2A) Any scheme or arrangement made or offered by any person satisfying the conditions as may be specified in accordance with the regulations made under this Act.](3) Notwithstanding anything contained in sub-section (2) [or sub-section (2A)] , any scheme or arrangement-

(i) made or offered by a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912) or a society being a society registered or deemed to be registered under any law relating to co-operative societies for the time being in force in any State;

(ii) under which deposits are accepted by non-banking financial companies as defined in clause (f) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934);

(iii) being a contract of insurance to which the Insurance Act, 1938 (4 of 1938), applies;

(iv) providing for any scheme, pension scheme or the insurance scheme framed under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952);

(v) under which deposits are accepted under section 58-A of the Companies Act, 1956 (1 of 1956);

(vi) under which deposits are accepted by a company declared as a Nidhi or a Mutual Benefit Society under section 620-A of the Companies Act, 1956 (1 of 1956);

(vii) falling within the meaning of chit business as defined in clause (e) of section 2 of the Chit Funds Act, 1982 (40 of 1982);

(viii) under which contributions made are in the nature of subscription to a mutual fund;shall not be a collective investment scheme.]

[(ix) such other scheme or arrangement which the Central Government may, in consultation with the Board, notify.]

11B. Power to issue directions [and levy penalty]. – (1) Save as otherwise provided in section 11, if after making or causing to be made an enquiry, the Board is satisfied that it is necessary-

(i) in the interest of investors, or orderly development of securities market; or

(ii) to prevent the affairs of any intermediary or other persons referred to in section 12 being conducted in a manner detrimental to the interests of investors of securities market; or

(iii) to secure the proper management of any such intermediary or person, it may issue such directions-

(a) to any person or class of persons referred to in section 12, or associated with the securities market; or

(b) to any company in respect of matters specified in section 11-A, as may be appropriate in the interests of investors in securities and the securities market.[(2) Without prejudice to the provisions contained in sub-section (1), sub-section (4A) of section 11 and section 15-I, the Board may, by an order, for reasons to be recorded in writing, levy penalty under sections 15A, 15B, 15C, 15D, 15E, 15EA, 15EB, 15F, 15G, 15H, 15HA and 15HB after holding an inquiry in the prescribed manner.][ Explanation. – For the removal of doubts, it is hereby declared that the power to issue directions under this section shall include and always be deemed to have been included the power to direct any person, who made profit or averted loss by indulging in any transaction or activity in contravention of the provisions of this Act or regulations made thereunder, to disgorge an amount equivalent to the wrongful gain made or loss averted by such contravention.]

[11C. Investigation. – (1) Where the Board has reasonable ground to believe that-

(a) the transactions in securities are being dealt with in a manner detrimental to the investors or the securities market; or

(b) any intermediary or any person associated with the securities market has violated any of the provisions of this Act or the rules or the regulations made or directions issued by the Board thereunder, it may, at any time by order in writing, direct any person (hereafter in this section referred to as the Investigating Authority) specified in the order to investigate the affairs of such intermediary or persons associated with the securities market and to report thereon to the Board.(2) Without prejudice to the provisions of sections 235 to 241 of the Companies Act, 1956 (1 of 1956), it shall be the duty of every manager, managing director, officer and other employee of the company and every intermediary referred to in section 12 or every person associated with the securities market to preserve and to produce to the Investigating Authority or any person authorised by him in this behalf, all the books, registers, other documents and record of, or relating to, the company or, as the case may be, of or relating to, the intermediary or such person, which are in their custody or power.(3) The Investigating Authority may require any intermediary or any person associated with securities market in any manner to furnish such information to, or produce such books, or registers, or other documents, or record before him or any person authorised by him in this behalf as he may consider necessary if the furnishing of such information or the production of such books, or registers, or other documents, or record is relevant or necessary for the purposes of its investigation.(4) The Investigating Authority may keep in its custody any books, registers, other documents and record produced under sub-section (2) or sub-section (3) for six months and thereafter shall return the same to any intermediary or any person associated with securities market by whom or on whose behalf the books, registers, other documents and record are produced:Provided that the Investigating Authority may call for any book, register, other document and record if they are needed again:Provided further that if the person on whose behalf the books, registers, other documents and record are produced requires certified copies of the books, registers, other documents and record produced before the Investigating Authority, it shall give certified copies of such books, registers, other documents and record to such person or on whose behalf the books, registers, other documents and record were produced.(5) Any person, directed to make an investigation under sub-section (1), may examine on oath, any manager, managing director, officer and other employee of any intermediary or any person associated with securities market in any manner, in relation to the affairs of his business and may administer an oath accordingly and for that purpose may require any of those persons to appear before him personally.(6) If any person fails without reasonable cause or refuses-

(a) to produce to the Investigating Authority or any person authorised by him in this behalf any book, register, other document and record which is his duty under sub-section (2) or sub-section (3) to produce; or

(b) to furnish any information which is his duty under sub-section (3) to furnish; or

(c) to appear before the Investigating Authority personally when required to do so under sub-section (5) or to answer any question which is put to him by the Investigating Authority in pursuance of that sub-section; or

(d) to sign the notes of any examination referred to in sub-section (7), he shall be punishable with imprisonment for a term which may extend to one year, or with fine, which may extend to one crore rupees, or with both, and also with a further fine which may extend to five lakh rupees for every day after the first during which the failure or refusal continues.(7) Notes of any examination under sub-section (2) shall be taken down in writing and shall be read over to, or by, and signed by, the person examined, and may thereafter be used in evidence against him.[(8) Where in the course of an investigation, the Investigating Authority has reason to believe that any person or enterprise, as the case may be, to whom a notice under sub-section (3) has been issued or might be issued,-

(a) has omitted or failed to provide the information or produce documents as required in the notice; or

(b) would not provide the information or produce documents which shall be useful for, or relevant to, the investigation; or

(c) would destroy, mutilate, alter, falsify or secrete the information or documents useful for, or relevant to, the investigation,then, the Chairman may, after being satisfied that it is necessary to do so, authorise the Investigating Authority or any other officer of the Board (the officer so authorised in all cases being hereinafter referred to as the authorised officer), to-

(i) enter and search, with such assistance, as may be required, the building, place, vessel, vehicle or aircraft where such information or documents are expected or believed to be kept;

(ii) break open the lock of any door, box, locker, safe almirah or other receptacle for exercising the powers conferred by sub-clause (i), where the keys thereof are not available;

(iii) search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted about his person any such books of account or other documents;

(iv) require any person who is found to be in possession or control of any books of account or other documents, maintained in the form of electronic record, to provide the authorised officer the necessary facility to inspect such books of account or other documents.Explanation – For the purposes of this sub-clause, the expression “electronic record” shall have the meaning assigned to it in clause (t) of sub-section (1) of section 2 of the information Technology Act, 2000.

(v) seize any such books of account or other documents found as a result of such search;

(vi) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom;

(vii) record on oath the statement of any person who is found to be in possession or in control of the information or documents referred to in sub-clause (i), (iii) and (iv).][(8A) The authorised officer may requisition the services of any police officer or any officer of the Central Government, or of both, to assist him for all or any of the purposes specified in sub-section (8) and it shall be the duty of every such officer to comply with such requisition.](9) After considering the application and hearing the Investigating Authority, if necessary, [the Magistrate or Judge of the Designated Court] may, by order, authorise the Investigating Authority-

(a) to enter, with such assistance, as may be required, the place or places where such books, registers, other documents and record are kept;

(b) to search that place or those places in the manner specified in the order; and

(c) to seize books, registers, other documents and record, it considers necessary for the purposes of the investigation:Provided that [the Magistrate or Judge of the Designated Court] shall not authorise seizure of books, registers, other documents and record, of any listed public company or a public company (not being the intermediaries specified under section 12) which intends to get its securities listed on any recognised stock exchange unless such company indulges in insider trading or market manipulation.(10) The Investigating Authority shall keep in its custody the books, registers, other documents and record seized under this section for such period not later than the conclusion of the investigation as it considers necessary and thereafter shall return the same to the company or the other body corporate, or, as the case may be, to the managing director or the manager or any other person, from whose custody or power they were seized and inform [the Magistrate or Judge of the Designated Court] of such return:Provided that the Investigating Authority may, before returning such books, registers, other documents and record as aforesaid, place identification marks on them or any part thereof.(11) Save as otherwise provided in this section, every search or seizure made under this section shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches or seizures made under that Code.

11D. Cease and desist proceedings. – If the Board finds, after causing an inquiry to be made, that any person has violated, or is likely to violate, any provisions of this Act, or any rules or regulations made thereunder, it may pass an order requiring such person to cease and desist from committing or causing such violation:Provided that the Board shall not pass such order in respect of any listed public company or a public company (other than the intermediaries specified under section 12) which intends to get its securities listed on any recognised stock exchange unless the Board has reasonable grounds to believe that such company has indulged in insider trading or market manipulation.]

CHAPTER V

Registration Certificate

12. Registration of stock-brokers, sub-brokers, share transfer agents, etc. – (1) No stock-broker, sub-broker, share transfer agent, banker to an issue, trustee of trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediary who may be associated with securities market shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained from the Board in accordance with the [regulations] made under this Act:Provided that a person buying or selling securities or otherwise dealing with the securities market as a stock-broker, sub-broker, share transfer agent, banker to an issue, trustee of trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediary who may be associated with securities market immediately before the establishment of the Board for which no registration certificate was necessary prior to such establishment, may continue to do so for a period of three months from such establishment or, if he has made an application for such registration within the said period of three months, till the disposal of such application:[Provided further that any certificate of registration, obtained immediately before the commencement of the Securities Laws (Amendment) Act, 1995, shall be deemed to have been obtained from the Board in accordance with the regulations providing for such registration.(1-A) No][depository, participant custodian][of securities, foreign institutional investor, credit rating agency or any other intermediary associated with the securities market as the Board may by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained from the Board in accordance with the regulations made under this Act:Provided that a person buying or selling securities or otherwise dealing with the securities market as a][depository, participant custodian][of securities, foreign institutional investor or credit rating agency immediately before the commencement of the Securities Laws (Amendment) Act, 1995, for which no certificate of registration was required prior to such commencement, may continue to buy or sell securities or otherwise deal with the securities market until such time regulations are made under clause (d) of sub-section (2) of section 30.(1-B) No person shall sponsor or cause to be sponsored or carry on or cause to be carried on any venture capital funds or collective investment scheme including mutual funds, unless he obtains a certificate of registration from the Board in accordance with the regulations:Provided that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any venture capital funds or collective investment scheme operating in the securities market immediately before the commencement of the Securities Laws (Amendment) Act, 1995 for which no certificate of registration was required prior to such commencement, may continue to operate till such time regulations are made under clause (d) of sub-section (2) of section 30.][Explanation. – For the removal of doubts, it is hereby declared that, for the purposes of this section, a collective investment scheme or mutual fund shall not include any unit linked insurance policy or scrips or any such instrument or unit, by whatever name called, which provides a component of investment besides the component of insurance issued by an insurer.](2) Every application for registration shall be in such manner and on payment of such fees as may be determined by regulations.(3) The Board may, by order, suspend or cancel a certificate of registration in such manner as may be determined by regulations:Provided that no order under this sub-section shall be made unless the person concerned has been given a reasonable opportunity of being heard.

[CHAPTER V-A]

Prohibition Of Manipulative And Deceptive Devices, Insider Trading And Substantial Acquisition Of Securities Or Control12A. Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of securities or control. – No person shall directly or indirectly-

(a) use or employ, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recognised stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of this Act or the rules or the regulations made thereunder;

(b) employ any device, scheme or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stock exchange;

(c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stock exchange, in contravention of the provisions of this Act or the rules or the regulations made thereunder;

(d) engage in insider trading;

(e) deal in securities while in possession of material or non-public information or communicate such material or non-public information to any other person, in a manner which is in contravention of the provisions of this Act or the rules or the regulations made thereunder;

(f) acquire control of any company or securities more than the percentage of equity share capital of a company whose securities are listed or proposed to be listed on a recognised stock exchange in contravention of the regulations made under this Act.

CHAPTER VI

Finance, Accounts And Audit13. Grants by the Central Government. – The Central Government may, after due appropriation made by Parliament by law in this behalf, make to the Board grants of such sums of money as that Government may think fit for being utilised for the purposes of this Act.14. Fund. – (1) There shall be constituted a Fund to be called the Securities and Exchange Board of India General Fund and there shall be credited thereto-

(a) all grants, fees and charges received by the Board under this Act; [*]

[* * *]

(b) all sums received by the Board from such other sources as may be decided upon by the Central Government.(2) The Fund shall be applied for meeting-

(a) the salaries, allowances and other remuneration of the members, officers and other employees of the Board;

(b) the expenses of the Board in the discharge of its functions under section 11;

[(d) the capital expenditure, as per annual capital expenditure plan approved by the Board and the Central Government.][(3) The Board shall constitute a Reserve Fund and twenty-five per cent. of the annual surplus of the General Fund in any year shall be credited to such Reserve Fund and such fund shall not exceed the total of annual expenditure of preceding two financial years.(4) After incurring all the expenses referred to in sub-section (2) and transfer to Reserve Fund as specified in sub-section (3), the surplus of the General Fund shall be transferred to the Consolidated Fund of India.]

15. Accounts and audit. – (1) The Board shall maintain proper accounts and other relevant records and prepare an annual statement of accounts in such form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India.(2) The accounts of the Board shall be audited by the Comptroller and Auditor-General of India at such intervals as may be specified by him and any expenditure incurred in connection with such audit shall be payable by the Board to the Comptroller and Auditor-General of India.(3) The Comptroller and Auditor-General of India and any other person appointed by him in connection with the audit of the accounts of the Board shall have the same rights and privileges and authority in connection with such audit as the Comptroller and Auditor-General generally has in connection with the audit of the Government accounts and, in particular, shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of the Board.(4) The accounts of the Board as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded annually to the Central Government and that Government shall cause the same to be laid before each House of Parliament.

[CHAPTER VI-A]

Penalties And Adjudication

15A. Penalty for failure to furnish information, return, etc. – If any person, who is required under this Act or any rules or regulations made thereunder,-

(a) to furnish any document, return or report to the Board, fails to furnish the same [or who furnishes or files false, incorrect or incomplete information, return, report, books or other documents], he shall be liable to [a penalty [which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees] ]

(b) to file any return or furnish any information, books or other documents within the time specified therefor in the regulations, fails to file return or furnish the same within the time specified therefor in the regulations [or who furnishes or files false, incorrect or incomplete information, return, report, books or other documents], he shall be liable to [a penalty [which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees] ]

(c) to maintain books of account or records, fails to maintain the same, he shall be liable to [a penalty [which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees] ]

15B. Penalty for failure by any person to enter into agreement with clients. – If any person, who is registered as an intermediary and is required under this Act or any rules or regulations made thereunder to enter into an agreement with his client, fails to enter into such agreement, he shall be liable to [a penalty [which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees] ][15C. Penalty for failure to redress investors’ grievances. – If any listed company or any person who is registered as an intermediary, after having been called upon by the Board in writing [including by any means of electronic communication], to redress the grievances of investors, fails to redress such grievances within the time specified by the Board, such company or intermediary shall be liable to a penalty [which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees] ]

15D. Penalty for certain defaults in case of mutual funds. – If any person, who is-

(a) required under this Act or any rules or regulations made thereunder to obtain a certificate of registration from the Board for sponsoring or carrying on any collective investment scheme, including mutual funds, sponsors or carries on any collective investment scheme, including mutual funds, without obtaining such certificate of registration, he shall be liable to [a penalty [which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which he sponsors or carries on any such collective investment scheme including mutual funds subject to a maximum of one crore rupees]

(b) registered with the Board as a collective investment scheme, including mutual funds, for sponsoring or carrying on any investment scheme, fails to comply with the terms and conditions of certificate of registration, he shall be liable to [a penalty] [which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees]

(c) registered with the Board as a collective investment scheme including mutual funds, fails to make an application for listing of its schemes as provided for in the regulations governing such listing, he shall be liable to [a penalty] [which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees]

(d) registered as a collective investment scheme, including mutual funds, fails to despatch unit certificates of any scheme in the manner provided in the regulation governing such despatch, he shall be liable to [a penalty] [which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees]

(e) registered as a collective investment scheme, including mutual funds, fails to refund the application monies, paid by the investors within the period specified in the regulations, he shall be liable to [a penalty] [which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees]

(f) registered as a collective investment scheme, including mutual funds, fails to invest money collected by such collective investment schemes in the manner or within the period specified in the regulations, he shall be liable to a penalty [which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees] .

15E. Penalty for failure to observe rules and regulations by an asset management company. – Where any asset management company of a mutual fund registered under this Act fails to comply with any of the regulations providing for restrictions on the activities of the asset management companies, such asset management company shall be liable to [a penalty][which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees]

[15EA. Penalty for default in case of alternative investment funds, infrastructure investment trusts and real estate investment trusts. – Where any person fails to comply with the regulations made by the Board in respect of alternative investment funds, infrastructure investment trusts and real estate investment trusts or fails to comply with the directions issued by the Board, such person shall be liable to penalty which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees or three times the amount of gains made out of such failure, whichever is higher.

15EB. Penalty for default in case of investment adviser and research analyst. – Where an investment adviser or a research analyst fails to comply with the regulations made by the Board or directions issued by the Board, such investment adviser or research analyst shall be liable to penalty which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees.]

15F. Penalty for default in case of stock brokers. – If any person, who is registered as a stock broker under this Act, –

(a) fails to issue contract notes in the form and manner specified by the stock exchange of which such broker is a member, he shall be liable to [a penalty which shall not be less than one lakh rupees but which may extend to [one crore rupees]] for which the contract note was required to be issued by that broker;

(b) fails to deliver any security or fails to make payment of the amount due to the investor in the manner within the period specified in the regulations, he shall be liable to [a penalty] [which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which [such failure continues] subject to a maximum of one crore rupees]

(c) charges an amount of brokerage which is in excess of the brokerage specified in the regulations, he shall be liable to [a penalty of one lakh rupees] or five times the amount [which shall not be less than one lakh rupees but which may extend to five times the amount of brokerage] whichever is higher.

15G. Penalty for insider trading. – If any insider who,-

(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stock exchange on the basis of any unpublished price sensitive information; or

(ii) communicates any unpublished price sensitive information to any person with or without his request for such information except as required in the ordinary course of business or under any law; or

(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price sensitive information, shall be liable to a penalty [which shall not be less than ten lakh rupees but which may extend to twenty-five crore rupees or three times the amount of profits made out of insider trading, whichever is higher] .

15H. Penalty for non-disclosure of acquisition of shares and takeovers. – If any person, who is required under this Act or any rules or regulations made thereunder, fails to-

(i) disclose the aggregate of his shareholding in the body corporate before he acquires any shares of that body corporate; or

(ii) make a public announcement to acquire shares at a minimum price;

[(iii) make a public offer by sending letter of offer to the shareholders of the concerned company; or

(iv) make payment of consideration to the shareholders who sold their shares pursuant to letter of offer,] he shall be liable to a penalty [which shall not be less than ten lakh rupees but which may extend to twenty-five crore rupees or three times the amount of profits made out of such failure, whichever is higher] .

[15HA. Penalty for fraudulent and unfair trade practices. – If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty not exceeding [which shall not be less than five lakh rupees but which may extend to twenty-five crore rupees or three times the amount of profits made out of such practices, whichever is higher] .[15HAA. Penalty for alteration, destruction, etc., of records and failure to protect the electronic database of Board. – Any person, who-

(a) knowingly alters, destroys, mutilates, conceals, falsifies, or makes a false entry in any information, record, document (including electronic records), which is required under this Act or any rules or regulations made thereunder, so as to impede, obstruct, or influence the investigation, inquiry, audit, inspection or proper administration of any matter within the jurisdiction of the Board.Explanation. – For the purposes of this clause, a person shall be deemed to have altered, concealed or destroyed such information, record or document, in case he knowingly fails to immediately report the matter to the Board or fails to preserve the same till such information continues to be relevant to any investigation, inquiry, audit, inspection or proceeding, which may be initiated by the Board and conclusion thereof;

(b) without being authorised to do so, access or tries to access, or denies of access or modifies access parameters, to the regulatory data in the database;

(c) without being authorised to do so, downloads, extracts, copies, or reproduces in any form the regulatory data maintained in the system database;

(d) knowingly introduces any computer virus or other computer contaminant into the system database and brings out a trading halt;

(e) without authorisation disrupts the functioning of system database;

(f) knowingly damages, destroys, deletes, alters, diminishes in value or utility, or affects by any means, the regulatory data in the system database; or

(g) knowingly provides any assistance to or causes any other person to do any of the acts specified in clauses (a) to (f), shall be liable to a penalty which shall not be less than one lakh rupees but which may extend to ten crore rupees or three times the amount of profits made out of such act, whichever is higher.Explanation. – In this section, the expressions “computer contaminant”, “computer virus” and “damage” shall have the meanings respectively assigned to them under section 43 of the Information Technology Act, 2000.]

15HB. Penalty for contravention where no separate penalty has been provided. – Whoever fails to comply with any provision of this Act, the rules or the regulations made or directions issued by the Board thereunder for which no separate penalty has been provided, shall be [liable to a penalty which shall not be less than one lakh rupees but which may extend to one crore rupees] .]

15I. Power to adjudicate. – (1) For the purpose of adjudging under sections 15-A, 15-B, 15-C, 15-D, 15-E, [15EA, 15EB,] 15-F, 15-G, [15-H, 15-HA and 15-HB] , the Board [may] appoint any officer not below the rank of a Division Chief to be an adjudicating officer for holding an inquiry in the prescribed manner after giving any person concerned a reasonable opportunity of being heard for the purpose of imposing any penalty.(2) While holding an inquiry the adjudicating officer shall have power to summon and enforce the attendance of any person acquainted with the facts and circumstances of the case to give evidence or to produce any document which in the opinion of the adjudicating officer, may be useful for or relevant to the subject matter of the inquiry and if, on such inquiry, he is satisfied that the person has failed to comply with the provisions of any of the sections specified in sub-section (1), he may impose such penalty as he thinks fit in accordance with the provisions of any of those sections.[(3) The Board may call for and examine the record of any proceedings under this section and if it considers that the order passed by the adjudicating officer is erroneous to the extent it is not in the interests of the securities market, it may, after making or causing to be made such inquiry as it deems necessary, pass an order enhancing the quantum of penalty, if the circumstances of the case so justify:Provided that no such order shall be passed unless the person concerned has been given an opportunity of being heard in the matter:Provided further that nothing contained in this sub-section shall be applicable after an expiry of a period of three months from the date of the order passed by the adjudicating officer or disposal of the appeal under section 15T, whichever is earlier.]

15J. [Factors to be taken into account while adjudging quantum of penalty.] – While adjudging the quantum of penalty under [15-I or section 11 or section 11B, the Board or the adjudicating officer] shall have due regard to the following factors, namely:-

(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default;

(b) the amount of loss caused to an investor or group of investors as a result of the default;

.[15JA. Crediting sum realised by way of penalties to Consolidated Fund of India. – All sums realised by way of penalties under this Act shall be credited to the Consolidated Fund of India.]

[15JB. Settlement of administrative and civil proceedings. – (1) Notwithstanding anything contained in any other law for the time being in force, any person, against whom any proceedings have been initiated or may be initiated under section 11, section 11B, section 11D, sub-section (3) of section 12 or section 15-I, may file an application in writing to the Board proposing for settlement of the proceedings initiated or to be initiated for the alleged defaults.(2) The Board may, after taking into consideration the nature, gravity and impact of defaults, agree to the proposal for settlement, on payment of such sum by the defaulter or on such other terms as may be determined by the Board in accordance with the regulations made under this Act.(3) The settlement proceedings under this section shall be conducted in accordance with the procedure specified in the regulations made under this Act.(4) No appeal shall lie under section 15T against any order passed by the Board or adjudicating officer, as the case may be, under this section.][(5) All settlement amounts, excluding the disgorgement amount and legal costs, realised under this Act shall be credited to the Consolidated Fund of India.]

CHAPTER VI-B

Establishment, Jurisdiction, Authority And Procedure Of Appellate Tribunal

15K. Establishment of Securities Appellate Tribunals. – (1) The Central Government shall by notification, establish one or more Appellate Tribunals to be known as the Securities Appellate Tribunal to exercise the jurisdiction, powers and authority conferred on such Tribunal by or under this Act [or any other law for the time being in force.](2) The Central Government shall also specify in the notification referred to in sub-section (1) the matters and places in relation to which the Securities Appellate Tribunal may exercise jurisdiction.

[15L. Composition of Securities Appellate Tribunal. – A Securities Appellate Tribunal shall consist of a Presiding Officer and two other Members, to be appointed, by notification, by the Central Government:Provided that the Securities Appellate Tribunal, consisting of one person only, established before the commencement of the Securities and Exchange Board of India (Amendment) Act, 2002, shall continue to exercise the jurisdiction, powers and authority conferred on it by or under this Act or any other law for the time being in force till two other Members are appointed under this section.

15M. Qualification for appointment as Presiding Officer or Member of Securities Appellate Tribunal. – [(1) A person shall not be qualified for appointment as the Presiding Officer of the Securities Appellate Tribunal unless he-

(a) is a sitting or retired Judge of the Supreme Court or a sitting or retired Chief Justice of a High Court; or

(b) is a sitting or retired Judge of a High Court who has completed not less than seven years of service as a Judge in a High Court.(1A) The Presiding Officer of the Securities Appellate Tribunal shall be appointed by the Central Government in consultation with the Chief Justice of India or his nominee.](2) A person shall not be qualified for appointment as Member of a Securities Appellate Tribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with problems relating to securities market and has qualification and experience of corporate law, securities laws, finance, economics or accountancy:Provided that a member of the Board or any person holding a post at senior management level equivalent to Executive Director in the Board shall not be appointed as Presiding Officer or Member of a Securities Appellate Tribunal during his service or tenure as such with the Board or within two years from the date on which he ceases to hold office as such in the Board.]

[15N. Tenure of office of Presiding Officer and other Members of Securities Appellate Tribunal. – The Presiding Officer and every other Member of a Securities Appellate Tribunal shall hold office for a term of five years from the date on which he enters upon his office and shall be eligible for re-appointment:Provided that no person shall hold office as the Presiding Officer of the Securities Appellate Tribunal after he has attained the age of sixty-eight years:Provided further that no person shall hold office as a Member of the Securities Appellate Tribunal after he has attained the age of sixty-two years.]

15O. Salary and allowances and other terms and conditions of service of Presiding Officers. – The salary and allowances payable to and the other terms and conditions of service (including pension, gratuity and other retirement benefits) of, the [Presiding Officer and other Members of a Securities Appellate Tribunal] shall be such as may be prescribed:Provided that neither the salary and allowances nor the other terms and conditions of service of the [Presiding Officer and other Members of a Securities Appellate Tribunal] shall be varied to their disadvantage after appointment.15P. Filling up of vacancies. – If, for reason other than temporary absence, any vacancy occurs in [the office of the Presiding Officer or any other Member,] of a Securities Appellate Tribunal, then the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Securities Appellate Tribunal from the stage at which the vacancy is filled.

15Q. Resignation and removal. – (1) [The Presiding Officer or any other Member of a Securities Appellate Tribunal] may, by notice in writing under his hand addressed to the Central Government, resign his office:Provided that the [Presiding Officer or any other Member] shall, unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is the earliest.(2) The [Presiding Officer or any other Member] of a Securities Appellate Tribunal shall not be removed from his office except by an order by the Central Government on the ground of proved misbehaviour or incapacity after an inquiry made by a Judge of the Supreme Court, in which the [Presiding Officer or any other Member] concerned has been informed of the charges against him and given a reasonable opportunity of being heard in respect of these charges.(3) The Central Government may, by rules, regulate the procedure for the investigation of misbehaviour or incapacity of [the Presiding Officer or any other Member] .

[15QA. Qualifications, terms and conditions of service of Presiding Officer and Member. – Notwithstanding anything contained in this Act, the qualifications, appointment, term of office, salaries and allowances, resignation, removal and the other terms and conditions of service of the Presiding Officer and other Members of the Appellate Tribunal appointed after the commencement of [the Tribunal Reforms Act, 2021, shall be governed by the provisions of Chapter II of the said Act]:Provided that the Presiding Officer and Member appointed before the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall continue to be governed by the provisions of this Act and the rules made thereunder as if the provisions of section 184 of the Finance Act, 2017 had not come into force.]

15R. Orders constituting Appellate Tribunal to be final and not to invalidate its proceedings. – No order of the Central Government appointing any person as the [Presiding Officer or a Member] of a Securities Appellate Tribunal shall be called in question in any manner, and no act or proceeding before a Securities Appellate Tribunal shall be called in question in any manner on the ground merely of any defect in the constitution of a Securities Appellate Tribunal.

15S. Staff of the Securities Appellate Tribunal. – (1) The Central Government shall provide the Securities Appellate Tribunal with such officers and employees as that Government may think fit.(2) The officers and employees of the Securities Appellate Tribunal shall discharge their functions under general superintendence of the Presiding Officer.(3) The salaries and allowances and other conditions of service of the officers and employees of the Securities Appellate Tribunal shall be such as may be prescribed.

15T. Appeal to the Securities Appellate Tribunal. – [(1) Save as provided in sub-section (2), any person aggrieved,-

(a) by an order of the Board made, on and after the commencement of the Securities Laws (Second Amendment) Act, 1999, under this Act, or the rules or regulations made thereunder; or

(b) by an order made by an adjudicating officer under this Act, may prefer an appeal to a Securities Appellate Tribunal having jurisdiction in the matter.(2) [***](3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which [a copy of the order made by the Board or the adjudicating officer, as the case may be,] is received by him and it shall be in such form and be accompanied by such fee as may be prescribed:Provided that the Securities Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period.(4) On receipt of an appeal under sub-section (1), the Securities Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.(5) The Securities Appellate Tribunal shall send a copy of every order made by it to the [Board, the parties] to the appeal and to the concerned adjudicating officer.(6) The appeal filed before the Securities Appellate Tribunal under sub-section (1) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within six months from the date of receipt of the appeal.

15U. Procedure and powers of the Securities Appellate Tribunal. – The Securities Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules, the Securities Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings.(2) The Securities Appellate Tribunal shall have, for the purposes of discharging their functions under this Act, the same powers as are vested in a civil Court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely:-

(a) summoning and enforcing the attendance of any person and examining him on oath;

(b) requiring the discovery and production of documents;

(d) issuing commissions for the examination of witnesses or documents;

(e) reviewing its decisions;

(f) dismissing an application for default or deciding it ex parte ;

(g) setting aside any order of dismissal of any application for default or any order passed by it ex parte ;

(h) any other matter which may be prescribed.(3) Every proceeding before the Securities Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196 of the Indian Penal Code (45 of 1860) and the Securities Appellate Tribunal shall be deemed to be a civil Court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

[15V. Right to legal representation. – The appellant may either appear in person or authorise one or more legal chartered accountants or company secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate Tribunal.Explanation. – For the purposes of this section,-

(a) “chartered accountant” means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;

(b) “company secretary” means a company secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 (56 of 1980) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;

(c) “cost accountant” means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;

(d) “legal practitioner” means an advocate, vakil or an attorney of any High Court, and includes a pleader in practice.]1

5W. Limitation. – The provisions of the Limitation Act, 1963, shall, as far as may be, apply to an appeal made to a Securities Appellate Tribunal.

[15X. Presiding Officer, Members and Staff of Securities Appellate Tribunals to be public servants. – The Presiding Officer, Members and other officers and employees of a Securities Appellate Tribunal shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).]

15Y. Civil Court not to have jurisdiction. – No civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which an adjudicating officer appointed under this Act or a Securities Appellate Tribunal constituted under this Act is empowered by or under this Act to determine 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 power conferred by or under this Act.[

15Z. Appeal to Supreme Court. – Any person aggrieved by any decision or order of the Securities Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order of the Securities Appellate Tribunal to him on any question of law arising out of such order:Provided that the Supreme Court may, if it is satisfied that the applicant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.]

CHAPTER VII

Miscellaneous

16. Power of Central Government to issue directions. – (1) Without prejudice to the foregoing provisions of [this Act or the Depositories Act, 1996] , the Board shall, in exercise of its powers or the performance of its functions under this Act, 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.[(3) The Board may call for and examine the record of any proceedings under this section and if it considers that the order passed by the adjudicating officer is erroneous to the extent it is not in the interests of the securities market, it may, after making or causing to be made such inquiry as it deems necessary, pass an order enhancing the quantum of penalty, if the circumstances of the case so justify:Provided that no such order shall be passed unless the person concerned has been given an opportunity of being heard in the matter:Provided further that nothing contained in this sub-section shall be applicable after an expiry of a period of three months from the date of the order passed by the adjudicating officer or disposal of the appeal under section 15T, whichever is earlier.]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.

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 [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.

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.

20. Appeals. – (1) Any person aggrieved by [an order of the Board made, before the commencement of the Securities Laws (Second Amendment) Act, 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.[20A. Bar of jurisdiction. – No order passed by the][Board or the adjudicating officer][under this Act shall be appealable except as provided in][section 15-T or section 20][and no civil Court shall have jurisdiction in respect of any matter which the Board 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 Board by, or under, this Act.

]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.

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).

23. Protection of action taken in good faith. – No suit, prosecution or other legal proceedings shall lie against the Central Government [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.

[24. Offences. – (1) Without prejudice to any award of penalty by the adjudicating officer [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] [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 [or the Board] or fails to comply with any [***] 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] [ten years or with fine, which may extend to twenty-five crore rupees or with both]

.[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.

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.]

25. Exemption from tax on wealth and income. – Notwithstanding anything contained in the Wealth-tax Act, 1957, the Income-tax Act, 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

.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, [* * * *] .(2) [***]

[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.

26B. Offences triable by Special Courts. – Notwithstanding anything contained in the Code of Criminal Procedure, 1973, all offences under this Act committed prior to the date of commencement of the Securities Laws (Amendment) Act, 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.

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 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.

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 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) 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.

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: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 to transfer any case or class of cases taken cognizance by a Court of Session under this section.]

27. [Contravention by companies.] – (1) Where [a contravention of any of the provisions of this Act or any rule, regulation, direction or order made thereunder] has been committed by a company, every person who at the time the offence 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 [contravention] 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 [contravention] was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such [contravention].(2) Notwithstanding anything contained in sub-section (1), where an [contravention] under this Act has been committed by a company and it is proved that the [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 [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.

28. Power to exempt. – [ Omitted by the Securities Laws (Amendment) Act, 1995 (9 of 1995), section 15 (w.r.e.f.25-1-1995).][28A. Recovery of amounts. – (1) If a person fails to pay the penalty imposed [under this Act] or fails to comply with any direction of the Board for refund of monies or fails to comply with a direction of disgorgement order issued under section 11B or fails to pay any fees due to the Board, the Recovery Officer may draw up under his signature a statement in the specified form specifying the amount due from the person (such statement being hereafter in this Chapter referred to as certificate) and shall proceed to recover from such person the amount specified in the certificate by one or more of the following modes, namely:-

(a) attachment and sale of the person’s movable property;

(b) attachment of the person’s bank accounts;

(d) arrest of the person and his detention in prison;

(e) appointing a receiver for the management of the person’s movable and immovable properties,and for this purpose, the provisions of sections 220 to 227, 228A, 229, 232, the Second and Third Schedules to the Income-tax Act, 1961(43 of 1961) and the Income-tax (Certificate Proceedings) Rules, 1962, as in force from time to time, in so far as may be, apply with necessary modifications as if the said provisions and the rules made thereunder were the provisions of this Act and referred to the amount due under this Act instead of to income-tax under the Income-tax Act, 1961.Explanation 1. – For the purposes of this sub-section, the person’s movable or immovable property or monies held in bank accounts shall include any property or monies held in bank accounts which has been transferred directly or indirectly on or after the date when the amount specified in certificate had become due, by the person to his spouse or minor child or son’s wife or son’s minor child, otherwise than for adequate consideration, and which is held by, or stands in the name of, any of the persons aforesaid; and so far as the movable or immovable property or monies held in bank accounts so transferred to his minor child or his son’s minor child is concerned, it shall, even after the date of attainment of majority by such minor child or son’s minor child, as the case may be, continue to be included in the person’s movable or immovable property or monies held in bank accounts for recovering any amount due from the person under this Act.Explanation 2. – Any reference under the provisions of the Second and Third Schedules to the Income-tax Act, 1961(43 of 1961) and the Income-tax (Certificate Proceedings)Rules, 1962 to the assessee shall be construed as a reference to the person specified in the certificate.Explanation 3. – Any reference to appeal in Chapter XVIID and the Second Schedule to the Income-tax Act, 1961(43 of 1961), shall be construed as a reference to appeal before the Securities Appellate Tribunal under section 15T of this Act.[Explanation 4. – The interest referred to in section 220 of the Income-tax Act, 1961 shall commence from the date the amount became payable by the person.](2) The Recovery Officer shall be empowered to seek the assistance of the local district administration while exercising the powers under sub-section (1).(3) Notwithstanding anything contained in any other law for the time being in force, the recovery of amounts by a Recovery Officer under sub-section (1), pursuant to non-compliance with any direction issued by the Board under section 11B, shall have precedence over any other claim against such person.(4) For the purposes of sub-sections (1), (2) and (3), the expression “Recovery Officer” means any officer of the Board who may be authorised, by general or special order in writing, to exercise the powers of a Recovery Officer.]

[28B. Continuance of proceedings. – (1) Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay, if he had not died, in the like manner and to the same extent as the deceased:Provided that, in case of any penalty payable under this Act, a legal representative shall be liable only in case the penalty has been imposed before the death of the deceased person.(2) For the purposes of sub-section (1), –

(a) any proceeding for disgorgement, refund or an action for recovery before the Recovery Officer under this Act, except a proceeding for levy of penalty, initiated against the deceased before his death, shall be deemed to have been initiated against the legal representative, and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased and all the provisions of this Act shall apply accordingly;

(b) any proceeding for disgorgement, refund or an action for recovery before the Recovery Officer under this Act, except a proceeding for levy of penalty, which could have been initiated against the deceased if he had survived, may be initiated against the legal representative and all the provisions of this Act shall apply accordingly.(3) Every legal representative shall be personally liable for any sum payable by him in his capacity as legal representative if, while his liability for such sum remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with.(4) The liability of a legal representative under this section shall be limited to the extent to which the estate of the deceased is capable of meeting the liability.Explanation. – For the purposes of this section “legal representative” means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character, the person on whom the estate devolves on the death of the party so suing or sued.]

[28C. Powers of Board not to apply to International Financial Services Centre. – Notwithstanding anything contained in any other law for the time being in force, the powers exercisable by the Board under this Act, –

(a) shall not extend to an International Financial Services Centre set up under sub-section (1) of section 18 of the Special Economic Zones Act, 2005;

(b) shall be exercisable by the International Financial Services Centres Authority established under sub-section (1) of section 4 of the International Financial Services Centres Authority Act, 2019,in so far as regulation of financial products, financial services and financial institutions that are permitted in the International Financial Services Centres are concerned.]29. Power to make rules. – (1) The Central Government may, by notification, make rules for carrying out the purposes of this Act.(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-

(a) the term of office and other conditions of service of the Chairman and the members under sub-section (1) of section 5;

(b) the additional functions that may be performed by the Board under section 11;

[* * *]

(d) the manner in which the accounts of the Board shall be maintained under section 15;

[(da) the manner of inquiry under sub-section (1) of section 15-I;

(db) the salaries and allowances and other terms and conditions of service of the] [Presiding Officers, Members] [and other officers and employees of the Securities Appellate Tribunal under section 15-O and sub-section (3) of section 15-S;

(dc) the procedure for the investigation of misbehaviour or incapacity of the] [Presiding Officers, or other Members] [of the Securities Appellate Tribunals under sub-section (3) of section 15-Q;

(dd) the form in which an appeal may be filed before the Securities Appellate Tribunal under section 15-T and the fees payable in respect of such appeal;]

(e) the form and the manner in which returns and report to be made to the Central Government under section 18;

(f) any other matter which is to be, or may be, prescribed, or in respect of which provision is to be, or may be, made by rules.

30. Power to make regulations. – (1) The Board may, [* * *] by notification, make regulations consistent with this Act and the rules made thereunder to carry out the purposes of this Act.(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:-

(a) the times and places of meetings of the Board and the procedure to be followed at such meetings under sub-section (1) of section 7 including the quorum necessary for the transaction of business;

(b) the term and other conditions of service of officers and employees of the Board under sub-section (2) of section 9;

[(c) the matters relating to issue of capital, transfer of securities and other matters incidental thereto and the manner in which such matters shall be disclosed by the companies under section 11-A;

[(ca) the utilisation of the amount credited under sub-section (5) of section 11;

(cb) the fulfilment of other conditions relating to collective investment scheme under sub-section (2A) of section 11AA

(cc) the procedure to be followed by the authorised officer for search or seizure under sub-section (9) of section 11C;]

(d) the conditions subject to which certificate of registration is to be issued, the amount of fee to be paid for certificate of registration and the manner of suspension or cancellation of certificate of registration under section 12.][(da) the terms determined by the Board for settlement of proceedings under sub-section (2) and the procedure for conducting of settlement proceedings under sub-section (3) of section 15JB;

(db) any other matter which is required to be, or may be, specified by regulations or in respect of which provision is to be made by regulations.]

31. Rules and regulations to be laid before Parliament. – Every rule and every regulation made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both houses agree in making any modification in the rule or regulation or both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation.

32. Application of other laws not barred. – The provisions of this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force.

33. Amendment of certain enactments. – The enactments specified in Parts I and II of the Schedule to this Act shall be amended in the manner specified therein and such amendments shall take effect on the date of establishment of the Board.

34. Power to remove difficulties. – (1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty:Provided that no order shall be made under this section after the expiry of five years from the commencement of this Act.(2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.

[34A. Any act or thing done or purporting to have been done under the principal Act, in respect of calling for information from, or furnishing information to, other authorities, whether in India or outside India, having functions similar to those of the Board and in respect of settlement of administrative and civil proceedings, shall, for all purposes, be deemed to be valid and effective as if the amendments made to the principal Act had been in force at all material times.]

35. Repeal and saving. – (1) The Securities and Exchange Board of India Ordinance, 1992, is hereby repealed.(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance, shall be deemed to have been done or taken under the corresponding provisions of this Act.

The Schedule

[See section 33]

Amendment of Certain Enactments

Part I

Amendment to the Capital Issues (Control) Act, 1947 (29 of 1947)In section 10 for “to that Government” substitute “to that Government or the Securities and Exchange Board of India”.

Part II

Amendments to the Securities Contracts (Regulation) Act, 1956 (42 of 1956)1. Section 2 in clause (h) for sub-clause (ii), substitute the following :-

“(ii) Government securities;

(iia) such other instruments as may be declared by the Central Government to be securities; and”.2. Section 6,-

(i) in sub -section (1), for “Central Government”, substitute “Securities and Exchange Board of India”;

(ii) in sub -section (2) for “by the Central Government”, substitute “by the Securities and Exchange Board of India”.

(iii) in sub -section (3), for “Central Government”, wherever it occurs, substitute “Securities and Exchange Board of India”;3. Section 9, for “Central Government” wherever it occurs, substitute “Securities and Exchange Board of India”;4. Section 10, for “Central Government” wherever it occurs, substitute “Securities and Exchange Board of India”;5. Section 17, in sub-section (1), for “licence granted by the Central Government”, substitute “licence granted by the Securities and Exchange Board of India”;6. Section 21 for “Central Government”, substitute “Securities and Exchange Board of India”;7. Section 22A, in sub -section (3), for clause (b), substitute the following –

“(b) that the transfer of the securities is in contravention of any law or rules made thereunder or any administrative instructions or conditions of listing agreement laid down in pursuance of such laws and rules.”;8. In sub-section (2) of section 23, for “Central Government under section 21 or section 22”, substitute “Securities and Exchange Board of India under section 21 or the Central Government under section 22”;9. After section 29 insert the following :

“29A. Power to delegate. – The Central Government may, by order published in the Official Gazette, direct that the powers exercisable by it under any provision of this Act shall, in relation to such matters and subject to such conditions, if any as may be specified in order, be excusable also by the Securities and Exchange Board of India.”

[* * *]

(d) the manner in which the accounts of the Board shall be maintained under section 15;

[(da) the manner of inquiry under sub-section (1) of section 15-I;

(dc) the procedure for the investigation of misbehaviour or incapacity of the] [Presiding Officers, or other Members] [of the Securities Appellate Tribunals under sub-section (3) of section 15-Q;

(dd) the form in which an appeal may be filed before the Securities Appellate Tribunal under section 15-T and the fees payable in respect of such appeal;]

(e) the form and the manner in which returns and report to be made to the Central Government under section 18;

(f) any other matter which is to be, or may be, prescribed, or in respect of which provision is to be, or may be, made by rules.

(a) the times and places of meetings of the Board and the procedure to be followed at such meetings under sub-section (1) of section 7 including the quorum necessary for the transaction of business;

(b) the term and other conditions of service of officers and employees of the Board under sub-section (2) of section 9;

[(c) the matters relating to issue of capital, transfer of securities and other matters incidental thereto and the manner in which such matters shall be disclosed by the companies under section 11-A;

[(ca) the utilisation of the amount credited under sub-section (5) of section 11;

(cb) the fulfilment of other conditions relating to collective investment scheme under sub-section (2A) of section 11AA

(cc) the procedure to be followed by the authorised officer for search or seizure under sub-section (9) of section 11C;]

(db) any other matter which is required to be, or may be, specified by regulations or in respect of which provision is to be made by regulations.]

32. Application of other laws not barred. – The provisions of this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force.

34A. Any act or thing done or purporting to have been done under the principal Act, in respect of calling for information from, or furnishing information to, other authorities, whether in India or outside India, having functions similar to those of the Board and in respect of settlement of administrative and civil proceedings, shall, for all purposes, be deemed to be valid and effective as if the amendments made to the principal Act had been in force at all material times.]

The Schedule

[See section 33]

Amendment of Certain Enactments

Part I

Amendment to the Capital Issues (Control) Act, 1947 (29 of 1947)In section 10 for “to that Government” substitute “to that Government or the Securities and Exchange Board of India”.

Part II

Amendments to the Securities Contracts (Regulation) Act, 1956 (42 of 1956)1. Section 2 in clause (h) for sub-clause (ii), substitute the following :-

“(ii) Government securities;

(iia) such other instruments as may be declared by the Central Government to be securities; and”.2. Section 6,-

(i) in sub -section (1), for “Central Government”, substitute “Securities and Exchange Board of India”;

(ii) in sub -section (2) for “by the Central Government”, substitute “by the Securities and Exchange Board of India”.

Limited Liability Partnership (LLP)

A Limited Liability Partnership (LLP) is a type of partnership in which some or all partners have limited liabilities. This means that each partner is not responsible or liable for another partner’s misconduct or negligence. LLPs are flexible legal and tax entities that allow partners to benefit from economies of scale by working together while also reducing their liability for the actions of other partners. LLPs are common in professional businesses like law firms, accounting firms, medical practices, and wealth managers.

Indian legislation that enables the formation of LLPs in India. An LLP is a hybrid business entity that combines the features of a partnership firm and a company. It offers the benefits of a partnership firm, such as flexibility and tax efficiency, with the added advantage of limited liability to its partners. The Act provides provisions relating to the formation and regulation of LLPs and lays down the provisions for matters which are incidental or connected with the formation and regulation of LLPs. The LLP shall be a body corporate and a legal entity separate from its partners. The mutual rights and duties of the partners of the LLP inter se and those of the LLP and its partners shall be governed by an agreement done among the partners subject to the provisions of the Act. The LLP is a formal structure that requires a written partnership agreement and usually comes with annual reporting requirements depending on your legal jurisdiction. The provisions of the Indian Partnership Act, 1932 shall not apply to a limited liability partnership.

Steps for the Incorporation of an LLP

Reserving the name for the LLP: The applicant first files the e-Form 1 to check the availability of the name and then register the name of the LLP. Once the name gets approved by the Ministry, it is reserved for the applicant for a duration of 90 days. If the LLP fails to be incorporated within the given frame of time, they let go of the reservation and make it available for other applicants.
Incorporating a new LLP: After the reservation of the name for the LLP, the applicant has to file e-Form 2 for the incorporation of the LLP. It carries all the details of the LLP proposed, plus all the details of the partners and the designated partners.
The partners and the designated partners have to give their consent to act in the respective decided roles.
Filing of the LLP Agreement has to be done with the Registrar in e-Form 3 within 30 days from the incorporation of the LLP. Execution of the LLP Agreement is mandatory as per Section 23 of the LLP Act, 2008.
The LLP Incorporation process is complete after obtaining the approval of the LLP Agreement.

Procedure for Incorporating Limited Liability Partnership Act

The LLP Act provides a framework for regulating the business affairs of limited liability partnerships. It also defines what constitutes a partnership, how it can be formed, dissolved, and other important terms related to this type of entity.

Incorporating a limited liability partnership is a procedure to create the legal entity known as a limited liability partnership.

The articles of incorporation for a limited liability partnership must include the following:

The name, address, and registered agent of the LLP
The name, address, and registered agent of each general partner
The name and address of each member
The date when formed the LLP was formed.
A brief statement about what type of business or profession is being conducted by the LLP

Agreement Procedure

In a Limited Liability Partnership Agreement, the agreement has to be in writing and must have the following:

The parties’ names and addresses
The type of limited liability partnership and its state of formation
The date on which the limited liability partnership is formed and its duration,
The name of the limited liability partnership’s official agent for service of process (if applicable)
A list of all general partner members of the limited liability partnership of all general partner members of the limited liability partnership

Essentials of LLP

LLP is a body corporate: LLP is a body corporate formed and incorporated under this Act and is a legal entity separate from that of its partners.
Perpetual Succession: An LLP can continue its existence irrespective of changes in partners. Death, insanity, retirement, or insolvency of partners have no impact on the existence of an LLP. It is capable of entering into contracts and holding property in its own name.
Separate Legal Entity: An LLP is a separate legal entity that is liable to the full extent of its assets, but the liability of the partners is limited to their agreed-upon contribution to the LLP.
Mutual Agency: Further, no partner is liable on account of the independent or unauthorized actions of other partners. All partners will be agents of the LLP alone. No one partner can bind the other partner by his acts.
LLP Agreement: The mutual rights and duties of the partners within an LLP are governed by an agreement between the partners. The LLP Act, 2008, provides partners with the flexibility to devise the agreement as per their choice. In the absence of any such agreement, mutual rights and duties shall be governed by the provisions of the LLP Act, 2008
Artificial Legal Person: An LLP is an artificial legal person because it is created by a legal process and is clothed with all rights of an individual. It can do everything which any natural person can do, except of course that, it cannot be sent to jail, cannot take an oath, cannot marry or get divorce nor can it practice a learned profession like CA or Medicine.
Common Seal: An LLP being an artificial person can act through its partners and designated partners. LLP may have a common seal, if it decides to have one. Thus, it is not mandatory for an LLP to have a common seal.
Limited Liability: Every partner of a LLP is, for the purpose of the business of LLP, the agent of the LLP, but not of other partners (Section. 26). The liability of the partners will be limited to their agreed contribution in the LLP.
Management of Business: The partners in the LLP are entitled to manage the business of LLP. But
only the designated partners are responsible for legal compliances.
Minimum and Maximum number of Partners: Every LLP shall have least two partners and shall also have at least 2 individuals as designated partners, of whom at least one shall be resident in India. There is no maximum limit on the partners in LLP.

PK Uthuppu v NJ Varghese & Anr

Kerala High Court, citing Bir Singh v. Mukesh Kumar, held that a voluntarily signed blank cheque also attracts the presumption under Section 139 of the NI Act unless cogent evidence proves otherwise.

“Even if a blank cheque leaf is voluntarily signed and handed over by the accused, towards some payment, it would attract the presumption under Section 139 of the N.I Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt,” the High Court said quoting the Bir Singh judgment.

The High Court was considering a revision petition filed by a man (revision petitioner) convicted under Section 138 of the NI Act which deals with the offence of cheque bouncing.

The revision petitioner was accused of issuing a cheque without ensuring that he had sufficient funds in his bank account, thereby defaulting on a ₹4 lakh loan. The check bounced due to insufficient funds, leading to a lawyer’s notice from the lender and a complaint under Section 138 of the NI Act when the borrowed amount was not repaid despite the notice.

The trial court found the accused-petitioner guilty. An appellate court upheld the conviction but reduced the sentence. The revision petitioner claimed that he had only issued a blank check to the complainant’s financial institution as security for a vehicle loan.

He argued that the complainant later failed to return various documents, including the blank cheque, claiming that they were misplaced. As per the petitioner, the blank cheque was then misused to file a false case against him. However, the High Court rejected these arguments. It observed that the petitioner had failed to produce any documents to show that he had availed a vehicle loan from a financial institution run by the complainant.

On the other hand, the Court found that there was evidence to indicate that he had availed a personal loan of ₹4 lakh as claimed by the complainant.

The Court further noted that the revision petitioner had admitted that he had voluntarily given a signed check to the complainant. Hence, the High Court said that the presumption under Section 139 of the NI Act favored the complainant. The Court also found that the revision petitioner could not counter the presumption that he had issued the check to discharge his debt.

“The revision petitioner failed to adduce any cogent evidence to show that, the cheque given by him was not towards discharge of any legally enforceable debt … Since the presumption stands unrebutted, this Court has to hold that, the appellate court rightly upheld the conviction of the revision petitioner under Section 138 of the N.I Act, and sentenced him to undergo imprisonment till rising of the court and to pay fine of Rs.4 lakh,” the Court said.

Therefore, the High Court dismissed the revision petition and directed him to surrender before the trial court to serve his sentence and pay the fine.

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Prevention Of oppression and mismanagement- India

What constitutes an act Of Oppression in a Company?

laws on Oppression and Mismanagement in India

Documentary evidence:

Public Documents (Section 74)

Private Documents (Section 75)

Oral Evidence

Case law of Oral Evidence

DIFFERENCE BETWEEN ORAL EVIDENCE AND DOCUMENTARY EVIDENCE

CONCLUSION

BACKGROUND

THE CODE

The meaning of dissolution

Modes of dissolution

Difference between dissolution and winding up.

Modes of winding up

Grounds of Winding up

Who may file petition?

Meaning :

History of Indian Evidence Act, 1872

Main Features of Indian Evidence Act

Conclusion:

CHAPTER IV

CHAPTER VI

CHAPTER VI-B

CHAPTER VII

Steps for the Incorporation of an LLP

Procedure for Incorporating Limited Liability Partnership Act

Agreement Procedure

Essentials of LLP

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