Sec 24A offences: Supreme Court says Sebi consent not mandatory

The Supreme Court on Friday held that the consent of Sebi is not mandatory for compounding offences under section 24A of the Sebi Act, but taking views of the expert body is necessary for stability in the securities market as well as for investor protection.

A bench headed by Justice D Y Chandrachud said that though Sebi was not conferred with any authority to veto a decision for proceeding in trial offences, it is a regulatory and prosecuting agency and the courts must obtain its views since it is an expert body.

The bench said it was clear that Sebi’s consent could not be mandatory for the court before which the proceeding was pending, for the purpose of exercising the power of compounding under Section 24A.

Section 24A of the SEBI Act of 1992 states that, “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.”