Regulation 80 - Procedure for imposing major penalties - Securities and Exchange Board of India (Employees’ Service) Regulations, 2001

Procedure for imposing major penalties 80. (1) No order imposing any of the major penalties specified in regulation 79 (2) shall be made except after an inquiry is held in accordance with this regulation. (2) Whenever, the Competent Authority is of the opinion that there are grounds for inquiring into the truth of any imputation of misconduct or misbehaviour against an employee, it may itself inquire into or appoint any other officer 1 [or any person not below the rank of retired District Judge, retired High Court Judge, retired Joint Secretary to the Government of India, retired Secretary to any State Government or retired Executive Director of any Financial Institution/Nationalised Bank/Reserve Bank of India] (hereinafter referred to as the inquiry officer) to inquiry into the truth thereof. Explanation : A breach of any of the provisions of these regulations shall be deemed to constitute a misconduct. The enquiry under this regulation, shall be done, in case the employee against whom proceeding is taken is an officer, by any officer who is in a grade higher than such employee and in the case of other employees any officer. Explanation : When the Competent Authority itself holds the inquiry any reference in sub- regulation (8) to sub-regulation (21) to the inquiry Officer shall be construed as a reference to Competent Authority (3) Where it is proposed to hold an inquiry, the Competent Authority shall frame definite and distinct charges on the basis of the allegation against the employee and the articles of charge, together with a statement of the allegations, on which they are based, shall be communicated in writing to the employee, who shall be required to submit within such time as may be specified by the Competent Authority (not exceeding 15 days), or within such extended time as may be granted by the said Authority, a written statement of his defence. (4) On receipt of the written statement of the employee, or if no such statement is received within the time specified, an inquiry may be held by the Competent Authority itself, or if it considers in necessary so to do appoint under sub-regulation (2) an Inquiry Officer for the purpose. Provided that it may not be necessary to hold an inquiry in respect of the articles of charge admitted by the employee in his written statement but shall be necessary to record its findings on each such charge. (5) The Competent Authority shall, where it is not the Inquiry Officer, forward to the Inquiry Officer; (i) a copy of the articles of charges and statements of imputations of misconduct or misbehaviour; (ii) a copy of the written statement of defence, if any submitted by the employee; (iii) a list of documents by which and list of witnesses by whom the articles of charge are proposed to be substantiated; (iv) a copy of statements of the witnesses, if any; (v) evidence providing the delivery of articles of charge under sub-regulation (3); (vi) a copy of the order appointing the 'Presenting Officer' it terms of sub-regulation (6). (6) Where the Competent Authority itself inquires or appoints an inquiring authority for holding an inquiry, it may, by an order, appoint an officer to be known as the Presenting Officer to present on its behalf the case in support of the articles of charge. (7) The employee may take the assistance of any other employee but may not engage a legal practitioner, for the purpose, unless the presenting officer appointed by the Competent Authority, is a legal practitioner or Competent Authority having regard to the circumstances of the case, so permits. (8)(a) The Inquiry Officer shall by notice in writing specify the day on which the employee shall appear in person before the Inquiry Officer. (b) On the date fixed by the Inquiry Officer, the employee shall appear before the Inquiry Officer at the time, place and date specified in the notice. (c) The Inquiry Officer shall ask the employee whether he pleads guilty or as any defence to make and if he pleads guilty to any of the Articles of charge, the Inquiry Officer shall record the plea, sign the record and obtain the signature of the employee concerned thereon. (d) The Inquiry Officer shall return a finding of guilty in respect of those articles of charge to which the employee concerned pleads guilty. (9) If the employee does not plead guilty, the Inquiry Officer shall adjourn the case to a later date not exceeding 30 days. (10) (a) The Inquiry Officer shall, where the employee does not admit all or any of the articles of charge, furnish to such employee a list of documents by which, and a list of witness by whom, the articles of charge are proposed to be proved. (b) The Inquiry Officer shall also record an order that the employee may for the purpose of preparing his defence. (i) inspect within five days of the order or within such further time not exceeding five days as the inquiring officer may allow, the documents listed; (ii) submit a list of documents and witness that he want for the inquiry; (iii) be supplied with copies of statements or witnesses to be relied upon, if any, recorded earlier and the Inquiry Officer shall furnish such copies not later than three days before the commencement of the examination of the witnesses by the Inquiry Officer; (iv) give a notice within ten days of the order or within such further time not exceeding ten days as the inquiring officer may allow for the discovery or production of the documents referred to in item (ii). Note : The relevancy of the documents and the examination of the witnesses referred to in sub-clause (ii) shall be given by the employee concerned. (11) The inquiry officer shall, on receipt of the notice for the discovery or production of the documents, forward the same or copies thereof to the authority in whose custody or possession the documents are kept with a requisition for the production of the documents on such date as may be specified. (12) On the receipt of the requisition under sub regulation (11), the authority having the custody or possession of the requisitioned documents shall arrange to produce the same before the Inquiry Officer on the date, place and time specified in the requisition; Provided that the authority having the custody or possession of the requisitioned documents may claim privilege if the production of such documents will be against the public interest or the interest of the Board. In that event, it shall inform the Inquiry Officer accordingly. (13) On the date fixed for the inquiry, the oral or documentary evidence by which the articles of charge are proposed to be proved shall be produced by or on behalf of the Competent Authority. The witnesses produced by the Presenting Officer shall be examined by the Presenting Officer and may be cross-examined by or on behalf of the employee. The Presenting Officer shall be entitled to re-examine his witnesses on any points on which they have been cross examined, but not on a new matter, without the leave of the inquiry officer. The inquiry officer may also put such questions to the witnesses. (14) Before the close of the case, in support of the charges, the Inquiry Officer may, in its discretion, allow the Presenting Officer to produce evidence not included in chargesheet or may itself call for new evidence or recall or re-examine any witness. In such case the employee shall be given opportunity to inspect the documentary evidence before it is taken on record, or to cross-examine a witness, who has been so summoned. The Inquiry Officer may also allow the employee to produce new evidence, if it is of opinion that the production of such evidence is necessary in the interests of justice. (15) When the case in support of the charges is closed, the employee may be required to state his defence, orally or in writing, as he may prefer. If the defence is made orally, it shall be recorded and the employee shall be required to sign the record. In either case a copy of the statement of defence shall be given to the Presenting officer, if any, appointed. (16) The evidence on behalf of the employee shall then be produced. The employee may examine himself in his own behalf, if he so prefers. The witnesses produced by the employee shall then be examined by the employee and may be cross-examined by the Presenting Officer. The employee shall be entitled to re-examine any of his witnesses on any points on which they have been cross-examined, but not on any new matter without the leave of the Inquiry Officer. (17) The inquiry officer may, after the officer employee closes his evidence, and shall, if the officer employee has not got himself examined, generally question him on the circumstances appearing against him in the evidence for the purpose of enabling the employee to explain any circumstances appearing in the evidence against him. (18) After the completion of the production of the evidence, the employee and the Presenting Officer may file written briefs of their respective cases within 15 days of the date of completion of the production of evidence. (19) If the employee does not submit the written statement of defence referred to in sub-regulation (3) on or before the date specified for the purpose or does not appear in person, or through the assisting officer or otherwise fails or refuses to comply with any of the provisions of these regulations, the Inquiry Officer may hold the inquiry ex-parte. (20) Whenever any Inquiry Officer, after having heard and recorded the whole or any part of the evidence in an inquiry ceases to exercise jurisdiction therein, and is succeeded by another Inquiry Officer which has, and which exercises, such jurisdiction, the Inquiry Officer so succeeding may act on the evidence so recorded by its predecessor, or partly recorded by its predecessor and partly recorded by itself: Provided that if the succeeding Inquiry Officer is of the opinion that further examination of any of the witnesses whose evidence has already been recorded is necessary in the interest of justice, it may recall, examine, cross-examine and re- examine any such witnesses as herein before provided. (21) (i) On the conclusion of the inquiry the Inquiry Officer shall prepare a report which shall contain the following : (a) a gist of the articles of charge and the statement of the imputations of misconduct or misbehaviour; (b) a gist of the defence of the employee in respect of each article of charge; (c) an assessment of the evidence in respect of each article of charge; (d) the findings on each article of charge and the reasons therefor Explanation : If, in the opinion of the Inquiry Officer the proceedings of the inquiry establish any article of charge different from the original article of charge, it may record its findings on such article of charge. Provided that the findings on such article of charge shall be recorded unless the employee has either admitted the facts on which such article of charge is based or has had a reasonable opportunity of defending himself against such article of charge. (ii) The Inquiry Officer, where it is not itself the Competent Authority, shall forward to the Competent Authority the records of inquiry which shall include- (a) the report of the inquiry prepared by it under clause (i); (b) the written statement of defence, if any, submitted by the employee referred to in sub regulation (15); (c) the oral and documentary evidence produced in the course of the inquiry; (d) written briefs referred to in sub-regulation (18), if any, and (e) the orders, if any, made by the Competent Authority and the Inquiry Officer in regard to the inquiry. ******** 1 Inserted by SEBI (Employees' Service) (Amendment) Regulations, 2004, w.e.f. 24-5-2004.