Chapter V MISCELLANEOUS

1[2 [20. Offences.--(1) Without prejudice to any award of penalty by the adjudicating officer 3 [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 or bye-laws 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.

1. (2) If any person fails to pay the penalty imposed by the 4 [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 twentyfive crore rupees, or with both.]

21. 1 [Contravention by companies].--(1) Where 2 [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 3 [contravention] 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 3 [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 offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

1. (2) Notwithstanding anything contained in sub-section (1), where 2 [a contravention of any of the provisions of this Act or any rule, regulation, direction or order made thereunder] this Act has been committed by a company and it is proved that the 3 [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 3 [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.

1 [22. Cognizance of offences by courts.--(1) No court shall take cognizance of any offence punishable under this Act or any rules or regulations or bye-laws made thereunder, save on a complaint made by the Central Government or State Government or the Securities and Exchange Board of India or by any person. 2 * * * * *]

[22A. 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.]

[22B. 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 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.

1. (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.]

1 [22C. 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.

1. (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.
2. (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.]

1[22D. 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 (27 of 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.]

1[22E. 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.]

1[22F. 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.

1. (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.]

1[22G. 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 to transfer any case or class of cases taken cognizance by a Court of Session under this section.]

1. (1) Any person aggrieved by 2 [an order of the Board made before the commencement of the Securities Laws (Second Amendment) Act, 1999 (32 of 1999)] under this Act, or the regulations made thereunder may prefer an appeal to the Central Government within such time as may be prescribed.
2. (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. (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. (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.

1 [23A. Appeal to Securities Appellate Tribunal.--(1) Save as provided in sub-section (2), any person aggrieved by an order of the Board made, on and after the commencement of the Securities Laws (Second Amendment) Act, 1999 (32 of 1999), under this Act, or the regulations made thereunder, 2 [or 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. 3 * * * * *

1. (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 is received by the person referred to in sub-section (1) and it shall be in such form and be accompanied by such fees 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.
2. (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.
3. (5) The Securities Appellate Tribunal shall send a copy of every order made by it to the Board and parties to the appeal.
4. (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.]

1[23B. Procedure and powers of Securities Appellate Tribunal.--(1) 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.

1. (2) The Securities Appellate Tribunal shall have, for the purpose 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;
   • (c) receiving evidence on affidavits;
   • (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; and
   • (h) any other matter which may be prescribed.
2. (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).]

1[23C. Right to legal representation.--The appellant may either appear in person or authorise one or more 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,--

1. (a) "chartered accountant" means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of 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;
2. (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;
3. (c) "cost accountant" means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of 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;
4. (d) "legal practitioner" means an advocate, vakil or an attorney of any High Court, and includes a pleader in practice.]

1[23D. Limitation.--The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to an appeal made to a Securities Appellate Tribunal.]

1[23E. Civil court not to have jurisdiction.--No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Securities Appellate Tribunal 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.]

1[1 [23F. 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 appellant 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.]]

1[23G. 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,--

1. (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 (28 of 2005);
2. (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.]

1. (1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of this Act.
2. (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:-- 1 [(a) the manner of inquiry under sub-section (1) of section 19H;
   • (aa) the time within which an appeal may be preferred under sub-section (1) of section 23;]
   • (b) the form in which an appeal may be preferred under sub-section (3) of section 23 and the fees payable in respect of such appeal;
   • (c) the procedure for disposing of an appeal under sub-section (4) of section 23; 2 [(d) the form in which an appeal may be filed before the Securities Appellate Tribunal under section 23A and the fees payable in respect of such appeal.]

1. (1) Without prejudice to the provisions contained in section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board may, by notification in the Official Gazette, make regulations consistent with the provisions of this Act and the rules made thereunder to carry out the purposes of this Act.
2. (2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for--
   • (a) the form in which record is to be maintained under clause (i) of sub-section (1) of section 2;
   • (b) the form in which the certificate of commencement of business shall be issued under sub-section (2) of section 3;
   • (c) the manner in which the certificate of security shall be surrendered under sub-section (1) of section 6;
   • (d) the manner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub-section (1) of section 12;
   • (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub-section (3) of section 14;
   • (f) the rights and obligations of the depositories, participants and the issuers under sub-section (1) of section 17;
   • (g) the eligibility criteria for admission of securities into the depository under sub-section (2) of section 17; 1 [(h) the terms determined by the Board for settlement of proceedings under sub-section (2) of section 19-IA;
     • (i) any other matter which is required to be, or may be, specified by regulations or in respect of which provision to be made by regulations.]

1. (1) A depository shall, with the previous approval of the Board, make bye-laws consistent with the provisions of this Act and the regulations.
2. (2) In particular, and without prejudice to the generality of the foregoing power, such bye-laws shall provide for--
   • (a) the eligibility criteria for admission and removal of securities in the depository;
   • (b) the conditions subject to which the securities shall be dealt with;
   • (c) the eligibility criteria for admission of any person as a participant;
   • (d) the manner and procedure for dematerialisation of securities;
   • (e) the procedure for transactions within the depository;
   • (f) the manner in which securities shall be dealt with or withdrawn from a depository;
   • (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners;
   • (h) the conditions of admission into and withdrawal from a participant by a beneficial owner;
     • (i) the procedure for conveying information to the participants and beneficial owners on dividend declaration, shareholder meetings and other matters of interest to the beneficial owners;
   • (j) the manner of distribution of dividends, interest and monetary benefits received from the company among beneficial owners;
   • (k) the manner of creating pledge or hypothecation in respect of securities held with a depository;
   • (l) inter se rights and obligations among the depository, issuer, participants and beneficial owners;
   • (m) the manner and the periodicity of furnishing information to the Board, issuer and other persons;
   • (n) the procedure for resolving disputes involving depository, issuer, company or a beneficial owner;
   • (o) the procedure for proceeding against the participant committing breach of the regulations and provisions for suspension and expulsion of participants from the depository and cancellation of agreements entered with the depository;
   • (p) the internal control standards including procedure for auditing, reviewing and monitoring.
3. (3) Where the Board considers it expedient so to do, it may, by order in writing, direct a depository to make any bye-laws or to amend or revoke any bye-laws already made within such period as it may specify in this behalf.
4. (4) If the depository fails or neglects to comply with such order within the specified period, the Board may make the bye-laws or amend or revoke the bye-laws made either in the form specified in the order or with such modifications thereof as the Board thinks fit

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, any other law for the time being in force relating to the holding and transfer of securities.

1. (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 appear to it to be necessary or expedient for removing the difficulty: Provided that no order shall be made under this section after the expiry of a period of two years from the commencement of this Act.
2. (2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.

[Amendments to certain enactments.] Rep. by the Repealing and Amending Act, 2001 (30 of 2001), s. 2 and the First Schedule (w.e.f. 3-9-2001).

1 [30A. Validation of certain acts.-- Any act or thing done or purporting to have been done under the principal Act, 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.]

1. (1) The Depositories (Third) Ordinance, 1996 (Ord. 28 of 1996) is hereby repealed.
2. (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.