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TMI Blog2023 (12) TMI 1435X X X X Extracts X X X X X X X X Extracts X X X X ..... nt appeal has been filed challenging the order dated August 31, 2023 passed by the Adjudicating Officer ('AO' for short) of the Securities and Exchange Board of India ('SEBI' for short) imposing a penalty of Rs. 50 lakh under Section 15HB of the Securities and Exchange Board of India Act, 1992 ('SEBI Act' for short) jointly and severally for failure to comply with the directions issued by the Whole Time Member ('WTM' for short) under Section 11(1), 11(4) and 11(B) of the SEBI Act vide its order dated 4th September, 2015 and 7th September, 2015. 2. The appellants were Directors at the relevant moment of time and resigned on 1st June, 2011 of Sunshine Infrabuild Corporation Ltd. This Company came out with various types of debentures during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curities market; or (iii) to secure the proper management of any such intermediary or person, it may issue such directions,- (a) to any person or class of persons referred to in section 12, or associated with the securities market; or (b) to any company in respect of matters specified in section 11A, as may be appropriate in the interests of investors in securities and the securities market. Explanation - For the removal of doubts, it is hereby declared that the power to issue directions under this section shall include and always be deemed to have been included the power to direct any person, who made profit or averted loss by indulging in any transaction or activity in contravention of the provisions of this Act or regulations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also been defined in the same Black's Law Dictionary Seventh Edition as a command, direction or instruction, a written direction or command delivered by a court or judge. Thus, direction and order are synonymous terms and are interchangeable. 9. In Rajinder Nath vs. Commissioner Of Income Tax (1979) 4 SCC 282, the Supreme Court held that a direction is an order issued by the authority or Court which is empowered to give while deciding the case before it. 10. Section 15HB is under Chapter-VIA of the SEBI Act, which provides for penalties and adjudication. A perusal of Chapter-VIA would indicate that penalties have been provided for specific violations, for example, under Section 15A, a penalty is provided for failure to furnish informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enquiry and adjudication can be enforced like a decree under Section 28A. Penalty proceedings cannot be initiated for non-compliance under Section 15HB. 14. We are further of the opinion that the appellants having resigned in 2011 were not in a position to comply with the direction of the WTM to bring back the money as they were no longer in-charge of the Company. Thus, there is no willful failure on the part of the appellant to comply with the order of the WTM. 15. In view of the aforesaid, we are of the view that the provisions of Section 15HB cannot be utilized for imposition of penalty for non-compliance of an order of the WTM passed under Section 11B of the SEBI Act. 16. Consequently, the impugned order cannot be sustained and is qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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