Securities Contracts (Regulation) Act, 1956

The appellant, Rishyashringa Jewellery Ltd., issued a prospectus stating that it had applied for listing its shares on the Coimbatore, Bombay and Madras Stock Exchanges. While Coimbatore granted permission within the ten‑week period prescribed under Section 73(1A) of the Companies Act, 1956, the Bombay Exchange rejecte…

The Supreme Court dismissed appeals by Sahara India Real Estate Corporation Ltd. and Sahara Housing Investment Corporation Ltd. against SEBI's order to refund over Rs. 17,400 crores collected through Optionally Fully Convertible Debentures (OFCDs). The Court held that the OFCDs were public issues, not private placement…

V.C. Grover obtained an overdraft facility from Bank of India by pledging shares and later requested the bank to sell 500 of those shares to clear part of his overdraft. The bank delayed the sale for several months, during which the share price fell dramatically, causing Grover a loss. He filed a complaint before the N…

The Bombay Stock Exchange (BSE) declared member Suresh D. Shah a defaulter and the Income Tax Department sought to attach the proceeds of his membership card and securities under s.226(3) of the Income Tax Act. BSE argued that a membership card is a personal, non‑transferable privilege and that its lien under Rule 43 m…

The Supreme Court considered a dispute arising from SEBI’s direction that the acquirer of Colour‑Chem Ltd. pay interest to shareholders for the delay in making a public offer under the 1997 Takeover Regulations, as amended in 2002. The Board had directed a 15% per‑annum interest on the offer price and held that dividen…

The Securities and Exchange Board of India (SEBI) appealed against the Securities Appellate Tribunal’s (SAT) order that limited a stock broker’s "annual turnover" to the brokerage earned, thereby reducing the registration fee payable by ICAP India Pvt Ltd, a broker in the wholesale debt market. The Supreme Court examin…

The respondent, Bharat V. Patel, Chairman and MD of Procter & Gamble India, received Rs 6,80,40,724 on redemption of Stock Appreciation Rights (SARs) issued by P&G USA in 1997, before the Finance Act, 1999 amendment to Section 17(2) became effective on 1 April 2000. The Revenue argued that the amount should be taxed as…

The Supreme Court examined whether a Chief Judicial Magistrate (CJM) in non‑metropolitan areas could entertain a secured creditor's application under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) for taking possession of secured ass…

Prakash Gupta, a director of Ideal Hotels & Industries Ltd, was prosecuted by SEBI for alleged price rigging and insider trading during the company's 1995 IPO. Gupta applied to have the offence under Section 24 of the SEBI Act compounded under Section 24A, but the trial judge and the Delhi High Court rejected the appli…

The appellants borrowed money from the respondent, securing the loan with seven immovable properties. Their loan account was declared a non‑performing asset and the parties’ contract contained an arbitration clause, leading the respondent to initiate arbitration while also issuing notices under Section 13 of the SARFAE…

The case concerned the purchase of shares in Escorts Ltd by thirteen overseas companies, predominantly owned by non‑resident Indians, under the Foreign Exchange Regulation Act, 1973 (FERA) portfolio investment scheme. The Reserve Bank of India (RBI) later granted permission for the purchases, which the company had init…

The appellant banks entered into ready‑forward (buy‑back) contracts with brokers before June 1992, consisting of a completed ready leg (purchase of securities) and a future forward leg. The Custodian, under the Special Court Act, claimed the contracts were void for violating RBI circulars issued under the Banking Regul…

Mahesh Ratilal Shah filed a writ petition alleging that the Bombay Stock Exchange (BSE) had listed the shares of Presto Finance Ltd. despite fraudulent dealings, and that the BSE’s Rules and Bye‑laws, never published in the Gazette, were ultra vires the Securities Contracts (Regulation) Act, 1956. The petition sought d…

The appellant, former MD and CEO of Ricoh India Ltd., was served a show‑cause notice by SEBI alleging violations of the SEBI Act and the PFUTP Regulations based on an investigation report. The appellant demanded the full investigation report, but SEBI claimed it was an internal document not subject to disclosure. The S…

Bhagwati Developers Pvt. Ltd. sought registration of 14,120 shares of Peerless General Finance & Investment Co. that it had acquired as repayment of a loan. Peerless refused, alleging the transfer violated the Securities Contracts (Regulation) Act, 1956. The Company Law Board and the Calcutta High Court held that the s…

The Supreme Court examined multiple appeals arising from the Satyam scandal, where the appellant, Chintalapati Srinivasa Raju, a former executive and non‑executive director of Satyam Computer Services Ltd (SCSL) and co‑brother of its chairman, was shown cause for insider trading under SEBI (Prohibition of Insider Tradi…

The Delhi Stock Exchange sought to increase its membership by 250, half through a public issue of shares and half by diluting existing shareholdings, subject to a higher non‑refundable deposit for public‑issue applicants. The Central Government approved the scheme, and an Expert Committee was constituted to select the …

The Supreme Court examined whether a stock broker must obtain a separate SEBI certificate of registration for each stock exchange where he operates, or whether a single registration suffices, and whether the ad valorem fee prescribed in Schedule III must be paid for each registration. The Court held that the expression…

PGF Limited, which sold and developed agricultural land and ran joint‑venture schemes, was directed by SEBI to cease collecting money and to refund investors, on the ground that its activities constituted a collective investment scheme (CIS) under Section 11AA of the SEBI Act. PGF challenged the SEBI order and the cons…

The Securities and Exchange Board of India (SEBI) appealed against the Securities Appellate Tribunal’s (SAT) order that set aside penalties imposed on M/s Opee Stock‑Link Ltd. and others for illegal off‑market trading of IPO shares. The shares of Jet Airways India Ltd. and Infrastructure Development Finance Co. were ov…

Jyoti Limited sought to list equity shares on the Bombay Stock Exchange (BSE) that were allotted to an Asset Reconstruction Company (RARE) after converting part of its debt into equity. The BSE rejected the application, stating that Jyoti had not obtained in‑principle approval from the exchange and had not secured a sh…

The appellants challenged the Bombay Stock Exchange's refusal to allow the delisting of Hella India Lighting Ltd., arguing that the public shareholding threshold for continuous listing was 10% under SEBI guidelines, not the 20% stipulated in the BSE listing agreement. Hella India, after a voluntary offer, saw its publi…

The case concerned the sale of a mortgaged property by a bank under the SARFAESI Act. The Supreme Court examined whether the bank, as a secured creditor, had complied with Section 13(8) of the Act and Rules 8 and 9, which require a 30‑day individual notice and a public notice before any sale. It held that the sale effe…

M/s. Techno Shares & Stocks Ltd. claimed depreciation on the cost of its Bombay Stock Exchange (BSE) membership card for assessment years 1999-2003, invoking Section 32(1)(ii) of the Income Tax Act, 1961. The Assessing Officer rejected the claim, holding that the membership card was a personal, non‑transferable privile…

The appellant, a member of the Delhi Stock Exchange, sued the non‑member respondent for Rs. 5,923 arising from share transactions. Each contract note bore a wide‑ranging arbitration clause referring disputes to the Exchange’s Rules, Regulations and Bye‑laws, specifically Bye‑law 247 which provided for a reference to tw…

The Securities and Exchange Board of India (SEBI) issued show‑cause notices to Rakhi Trading and other traders for executing synchronized buy‑sell and reverse transactions in Nifty options that consistently yielded profit for one party and loss for the other without any material change in the underlying index. The Adju…

The Securities and Exchange Board of India (SEBI) issued show‑cause notices to Vital Communications Ltd (VCL) and related entities for misleading advertisements, leading to a series of orders: a 2008 restraint order, a 2014 order imposing market bans, and a 2018 disgorgement order. The Securities Appellate Tribunal set…

The appellant, Harinarayan G. Bajaj, bought shares through broker Rajesh Meghani but failed to pay for them. The National Stock Exchange (NSE) declared the broker a defaulter and the broker referred his claim for the unpaid amount to arbitration under NSE by‑laws. The arbitral tribunal awarded the broker Rs 3,46,89,636…

The Securities and Exchange Board of India (SEBI) debarred Panasia Advisors Ltd. and its managing director for ten years, alleging that as lead managers they facilitated a fraudulent scheme involving Global Depository Receipts (GDRs) of six Indian companies, creating a false appearance of foreign investment and harming…

Raymond Synthetics Ltd. and others issued a prospectus for a public issue of shares and debentures, seeking permission from several stock exchanges to list the securities. The company received massive oversubscription, allotted shares before the statutory 10‑week deadline for obtaining exchange permission, and later fa…

The Supreme Court examined whether Infosys Technologies Ltd. was required to deduct tax under Section 192 of the Income Tax Act on the benefit employees derived from an Employees Stock Option Scheme (ESOP) for the assessment years 1997-98, 1998-99 and 1999-2000. The Court held that, at that time, there was no provision…

Canbank Financial Services Ltd., a subsidiary of Canara Bank, purchased CANCIGO units worth Rs 33 crore from a stock broker (Respondent 2) who had applied for the units through two other banks (Respondents 3 and 4) that held the certificates in their names but transferred possession to the broker. The Special Court hel…

The Ahmedabad Stock Exchange sought to dispose of the membership of its deceased member, Rajesh Shah, after his heirs declared they could not meet his liabilities. The Exchange declared him a deemed defaulter and exercised its right under the Exchange Rules to vest the membership in the Exchange and sell it. The Assist…

The Supreme Court examined whether the freely transferable "replenishment licences" (R.E.P. licences) and later "Exim Scrips" issued under the Imports and Exports (Control) Act, 1947 constitute "goods" for the purpose of state sales‑tax statutes. The Court held that these licences have an independent market value, are …