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THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

Title : THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

Year : 1992



(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 Board1 [***].
3[***]

26A -4* 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 -4* Offences triable by Special Courts

Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), all offences under this Act committed prior to the date of commencement of the Securities Laws (Amendment) Act, 2014 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 -4* Appeal and revision

The High Court may exercise, so far as may be applicable, all the powers conferred by Chapters XXIX and XXX of the Code of Criminal Procedure, 1973 (2 of 1974) on a High Court, as if a Special Court within the local limits of the jurisdiction of the High Court were a Court of Session trying cases within the local limits of the jurisdiction of the High Court.

26D -4* Application of Code to proceedings before Special Court

(1) Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure, 1973 (2 Of 1974) shall apply to the proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall be deemed to be a Court of Session and the person conducting prosecution before a Special Court shall be deemed to be a Public Prosecutor within the meaning of clause (u) of section 2 of the Code of Criminal Procedure, 1973.

(2) 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 - 4*Transitional provisions

Any offence committed under this Act, which is triable by a Special Court shall, until a Special Court is established, be taken cognizance of and tried by a Court of Session exercising jurisdiction over the area, notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974):

Provided that nothing contained in this section shall affect the powers of the High Court under section 407 of the Code of Criminal Procedure, 1973 (2 of 1974) to transfer any case or class of cases taken cognizance by a Court of Session under this section.

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1. The words, "with the previous sanction of the Central Government" omitted by Act 9 of 1995,section 14(w.r.e.f. 25-1-1995).

2. Substituted by Act 59 of 2002, section 30 for "a Metropolitan Magistrate or a Judicial Magistrate of the first class"(w.r.e.f. 29-10-2002).

3. Omitted by the Securities Laws (Amendment) Act, 2014, the previous text was:-"(2) No court inferior to that of 2[a court of session] shall try any offence punishable under this Act."

4. Inserted by the Securities Laws (Amendment) Act, 2014.

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(1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence 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 offence 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.



[Rep. by the Securities Laws (Amendment) Act, 1995 (9 of 1995), section 15 (w.r.e.f. 25-1-1995).]

28A - 1*Recovery of amounts

[(1) If a person fails to pay the penalty imposed by the adjudicating officer 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;

(c) Attachment and sale of the person's immovable property;

(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.

(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.]

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1. Inserted by the Securities Laws (Amendment) Act, 2014.

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(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;

1[***]

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

2*[(da) The manner of inquiry under sub-section (1) of section 15-1;

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

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

(dd) The form in which an appeal may be filed before the securities Appellate Tribunal under section 15T 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.

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1. Clause (c) omitted by Act 9 of 1995,section 16(w.r.e.f. 25-1-1995).

2.Inserted by Act 9 of 1995, section 16(w.r.e.f. 25-1-1995).

3.Substituted by Act 59 of 2002, section 31, for "Presiding Officers"(w.r.e.f. 29-10-2002).

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(1) The Board may,1 [***] by notification, make regulations consistent with this Act and the rules made there under to carry out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the forgoing 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 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;

2*[(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;

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

(cb) The fulfillment of other conditions relating to collective investment scheme under sub-section (2A) of section 11AA;]

(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.]

3*[(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.]
 
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1. The words "with the previous approval of the Central Government" omitted by Act 9 of 1995,section 17(w.r.e.f. 25-1-1995).

2. Substituted by Act 9 of 1995, section 17, for clause (c)(w.r.e.f. 25-1-1995).

3. Inserted by the Securities Laws (Amendment) Act, 2014.

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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.



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.



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.



(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 - 1*Validation of certain acts

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.]

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1. Inserted by the Securities Laws (Amendment) Act, 2014.

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(1) The Securities and Exchange Board of India Ordinance, 1992 (Ord. 5 of 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.

Last updated on July, 2016

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