THE SECURITIES AND EXCHANGE BOARD OF INDIA (AMENDMENT) ACT, 2002
ACT NO. 59 OF 2002
[17th December, 2002.]
An Act further to amend the Securities and Exchange Board of India
Act, 1992.
BE it enacted by Parliament in the Fifty-third Year of the Republic of
India as follows:-
1.
Short title and commencement.
1. Short title and commencement.-(1) This Act may be called the
Securities and Exchange Board of India (Amendment) Act, 2002.
(2) It shall be deemed to have come into force on the 29th day of
October, 2002.
2.
Amendment of section 2.
2. Amendment of section 2.-In section 2 of the Securities and
Exchange Board of India Act, 1992 (15of 1992) (hereinafter referred to
as the principal Act), in sub-section (1), after clause (h), the
following clause shall be inserted, namely:-
'(ha) "Reserve Bank" means the Reserve Bank of India constituted under
section 3 of the Reserve Bank of India Act, 1934 (2 of 1934);'.
3.
Amendment of section 4.
3. Amendment of section 4.-In section 4 of the principal Act,-
(a) in sub-section (1),-
(i) in clause (b),-
(A) for the word "Ministries", the word "Ministry" shall be
substituted;
(B) for the words "and Law", the words and figures "and administration
of the Companies Act, 1956 (1 of 1956)" shall be substituted;
(ii) in clause (c), for the words and figures "the Reserve Bank of
India constituted under section 3 of the Reserve Bank of India Act,
1934 (2 of 1934)", the words "the Reserve Bank" shall be substituted;
(iii) for clause (d), the following clause shall be substituted,
namely:-
"(d) five other members of whom at least three shall be the whole-time
members,";
(b) in sub-section (4), for the words "Reserve Bank of India", the
words "Reserve Bank" shall be substituted.
4.
Amendment of section 11.
4. Amendment of section 11.-In section 11 of the principal Act,-
(a) in sub-section (2), after clause (i), the following clause shall
be inserted, namely:-
"(ia) calling for information and record from any bank or any other
authority or board or corporation established or constituted by or
under any Central, State or Provincial Act in respect of any
transaction in securities which is under investigation or inquiry by
the Board;";
(b) after sub-section (2), the following sub-section shall be
inserted, namely:-
"(2A) Without prejudice to the provisions contained in sub-section
(2), the Board may take measures to undertake inspection of any book,
or register, or other document or record of any listed public company
or a public company (not being intermediaries eferred to in section
12) which intends to get its securities listed on any recognised stock
exchange where the Board has reasonable grounds to believe that such
company has been indulging in insider trading or fraudulent and unfair
trade practices relat ng to securities market.";
(c) in sub-section (3),-
(i) in the opening portion, for the words, brackets, letter and figure
"clause (i) of sub-section (2)", the words, brackets, figures and
letters "clause (i) or clause (ia) of sub-section (2) or sub-section
(2A)" shall be substituted;
(ii) after clause (iii), the following clauses shall be inserted at
the end, namely :-
"(iv) inspection of any book, or register, or other document or record
of the company referred to in sub-section (2A);
(v) issuing commissions for the examination of witnesses or
documents.";
(d) after sub-section (3), the following sub-section shall be
inserted, namely:-
"(4) Without prejudice to the provisions contained in sub-sections
(1), (2), (2A) and (3) and section 11B, the Board may, by an order,
for reasons to be recorded in writing, in the interests of investors
or securities market, take any of the following me sures, either
pending investigation or inquiry or on completion of such
investigation or inquiry, namely:-
(a) suspend the trading of any security in a recognised stock
exchange;
(b) restrain persons from accessing the securities market and prohibit
any person associated with securities market to buy, sell or deal in
securities;
(c) suspend any office-bearer of any stock exchange or self-regulatory
organisation from holding such position;
(d) impound and retain the proceeds or securities in respect of any
transaction which is under investigation;
(e) attach, after passing of an order on an application made for
approval by the Judicial Magistrate of the first class having
jurisdiction, for a period not exceeding one month, one or more bank
account or accounts of any intermediary or any person asso iated with
the securities market in any manner involved in violation of any of
the provisions of this Act, or the rules or the regulations made
thereunder:
Provided that only the bank account or accounts or any transaction
entered therein, so far as it relates to the proceeds actually
involved in violation of any of the provisions of this Act, or the
rules or the regulations made thereunder shall be allowed to be
attached;
(f) direct any intermediary or any person associated with the
securities market in any manner not to dispose of or alienate an asset
forming part of any transaction which is under investigation:
Provided that the Board may, without prejudice to the provisions
contained in sub-section (2) or sub-section (2A), take any of the
measures specified in clause (d) or clause (e) or clause (f), in
respect of any listed public company or a public company not being
intermediaries referred to in section 12) which intends to get its
securities listed on any recognised stock exchange where the Board has
reasonable grounds to believe that such company has been indulging in
insider trading or fraudulent and un air trade practices relating to
securities market :
Provided further that the Board shall, either before or after passing
such orders, give an opportunity of hearing to such intermediaries or
persons concerned.".
5.
Substitution of new section for section 11A.
5. Substitution of new section for section 11A.-For section 11A of
the principal Act, the following section shall be substituted, namely
:-
"11A. Board to regulate or prohibit issue of prospectus, offer
document or advertisement soliciting money for issue of
securities.-(1) Without prejudice to the provisions of the Companies
Act, 1956 (1 of 1956), the Board may, for the protection of invest
rs,-
(a) specify, by regulations -
(i) the matters relating to issue of capital, transfer of securities
and other matters incidental thereto; and
(ii) the manner in which such matters shall be disclosed by the
companies;
(b) by general or special orders-
(i) prohibit any company from issuing prospectus, any offer document,
or advertisement soliciting money from the public for the issue of
securities;
(ii) specify the conditions subject to which the prospectus, such
offer document or advertisement, if not prohibited, may be issued.
(2) Without prejudice to the provisions of section 21 of the
Securities Contracts (Regulation) Act, 1956, the Board may specify the
requirements for listing and transfer of securities and other matters
incidental thereto.".
6.
Insertion of new sections 11C and 11D.
6. Insertion of new sections 11C and 11D.-After section 11B of the
principal Act, the following sections shall be inserted, namely:-
"11C. Investigation.-(1) Where the Board has reasonable ground to
believe that-
(a) the transactions in securities are being dealt with in a manner
detrimental to the investors or the securities market; or
(b) any intermediary or any person associated with the securities
market has violated any of the provisions of this Act or the rules or
the regulations made or directions issued by the Board thereunder,
it may, at any time by order in writing, direct any person (hereafter
in this section referred to as the Investigating Authority) specified
in the order to investigate the affairs of such intermediary or
persons associated with the securities market and o report thereon to
the Board.
(2) Without prejudice to the provisions of sections 235 to 241 of the
Companies Act, 1956 (1 of 1956), it shall be the duty of every
manager, managing director, officer and other employee of the company
and every intermediary referred to in section 12 or every person
associated with the securities market to preserve and to produce to
the Investigating Authority or any person authorised by it in this
behalf, all the books, registers, other documents and record of, or
relating to, the company or, as the ca e may be, of or relating to,
the intermediary or such person, which are in their custody or power.
(3) The Investigating Authority may require any intermediary or any
person associated with securities market in any manner to furnish such
information to, or produce such books, or registers, or other
documents, or record before it or any person authoris d by it in this
behalf as it may consider necessary if the furnishing of such
information or the production of such books, or registers, or other
documents, or record is relevant or necessary for the purposes of its
investigation.
(4) The Investigating Authority may keep in its custody any books,
registers, other documents and record produced under sub-section (2)
or sub-section (3) for six months and thereafter shall return the same
to any intermediary or any person associated wi h securities market by
whom or on whose behalf the books, registers, other documents and
record are produced:
Provided that the Investigating Authority may call for any book,
register, other document and record if they are needed again:
Provided further that if the person on whose behalf the books,
registers, other documents and record are produced requires certified
copies of the books, registers, other documents and record produced
before the Investigating Authority, it shall give cer ified copies of
such books, registers, other documents and record to such person or on
whose behalf the books, registers, other documents and record were
produced.
(5) Any person, directed to make an investigation under sub-section
(1), may examine on oath, any manager, managing director, officer and
other employee of any intermediary or any person associated with
securities market in any manner, in relation to the affairs of his
business and may administer an oath accordingly and for that purpose
may require any of those persons to appear before it personally.
(6) If any person fails without reasonable cause or refuses-
(a) to produce to the Investigating Authority or any person authorised
by it in this behalf any book, register, other document and record
which is his duty under sub-section (2) or sub-section (3) to produce;
or
(b) to furnish any information which is his duty under sub-section (3)
to furnish; or
(c) to appear before the Investigating Authority personally when
required to do so under sub-section (5) or to answer any question
which is put to him by the Investigating Authority in pursuance of
that sub-section; or
(d) to sign the notes of any examination referred to in sub-section
(7), he shall be punishable with imprisonment for a term which may
extend to one year, or with fine, which may extend to one crore
rupees, or with both, and also with a further fine which may extend to
five lakh rupees for every day after the first during whi h the
failure or refusal continues.
(7) Notes of any examination under sub-section (5) shall be taken down
in writing and shall be read over to, or by, and signed by, the person
examined, and may thereafter be used in evidence against him.
(8) Where in the course of investigation, the Investigating Authority
has reasonable ground to believe that the books, registers, other
documents and record of, or relating to, any intermediary or any
person associated with securities market in any manne , may be
destroyed, mutilated, altered, falsified or secreted, the
Investigating Authority may make an application to the Judicial
Magistrate of the first class having jurisdiction for an order for the
seizure of such books, registers, other documents an record.
(9) After considering the application and hearing the Investigating
Authority, if necessary, the Magistrate may, by order, authorise the
Investigating Authority -
(a) to enter, with such assistance, as may be required, the place or
places where such books, registers, other documents and record are
kept;
(b) to search that place or those places in the manner specified in
the order; and
(c) to seize books, registers, other documents and record, it
considers necessary for the purposes of the investigation:
Provided that the Magistrate shall not authorise seizure of books,
registers, other documents and record, of any listed public company or
a public company (not being the intermediaries specified under section
12) which intends to get its securities liste on any recognised stock
exchange unless such company indulges in insider trading or market
manipulation.
(10) The Investigating Authority shall keep in its custody the books,
registers, other documents and record seized under this section for
such period not later than the conclusion of the investigation as it
considers necessary and thereafter shall return the same to the
company or the other body corporate, or, as the case may be, to the
managing director or the manager or any other person, from whose
custody or power they were seized and inform the Magistrate of such
return:
Provided that the Investigating Authority may, before returning such
books, registers, other documents and record as aforesaid, place
identification marks on them or any part thereof.
(11) Save as otherwise provided in this section, every search or
seizure made under this section shall be carried out in accordance
with the provisions of the Code of Criminal Procedure, 1973 (2 of
1974) relating to searches or seizures made under that C de.
11D. Cease and desist proceedings.-If the Board finds, after causing
an inquiry to be made, that any person has violated, or is likely to
violate, any provisions of this Act, or any rules or regulations made
thereunder, it may pass an order requiring suc person to cease and
desist from committing or causing such violation:
Provided that the Board shall not pass such order in respect of any
listed public company or a public company (other than the
intermediaries specified under section 12) which intends to get its
securities listed on any recognised stock exchange unless th Board has
reasonable grounds to believe that such company has indulged in
insider trading or market manipulation.".
7.
Insertion of new Chapter VA.
7. Insertion of new Chapter VA.-After Chapter V of the principal Act,
the following Chapter shall be inserted, namely:-
"CHAPTER VA
PROHIBITION OF MANIPULATIVE AND DECEPTIVE DEVICES, INSIDER TRADING AND
SUBSTANTIAL ACQUISITION OF SECURITIES OR CONTROL
12A. Prohibition of manipulative and deceptive devices, insider
trading and substantial acquisition of securities or control.-No
person shall directly or indirectly -
(a) use or employ, in connection with the issue, purchase or sale of
any securities listed or proposed to be listed on a recognised stock
exchange, any manipulative or deceptive device or contrivance in
contravention of the provisions of this Act or the ules or the
regulations made thereunder;
(b) employ any device, scheme or artifice to defraud in connection
with issue or dealing in securities which are listed or proposed to be
listed on a recognised stock exchange;
(c) engage in any act, practice, course of business which operates or
would operate as fraud or deceit upon any person, in connection with
the issue, dealing in securities which are listed or proposed to be
listed on a recognised stock exchange, in contr vention of the
provisions of this Act or the rules or the regulations made
thereunder;
(d) engage in insider trading;
(e) deal in securities while in possession of material or non-public
information or communicate such material or non-public information to
any other person, in a manner which is in contravention of the
provisions of this Act or the rules or the reg lations made
thereunder;
(f) acquire control of any company or securities more than the
percentage of equity share capital of a company whose securities are
listed or proposed to be listed on a recognised stock exchange in
contravention of the regulations made under this Act.".
8.
Amendment of section 14.
8. Amendment of section 14.-In section 14 of the principal Act, in
sub-section (1), clause (aa) shall be omitted.
9.
Amendment of section 15A.
9. Amendment of section 15A.-In section 15A of the principal Act,-
(i) in clause (a), for the words "a penalty not exceeding one lakh and
fifty thousand rupees for each such failure", the words "a penalty of
one lakh rupees for each day during which such failure continues or
one crore rupees, whichever is less" shall be substituted;
(ii) in clause (b), for the words "a penalty not exceeding five
thousand rupees for every day during which such failure continues",
the words "a penalty of one lakh rupees for each day during which such
failure continues or one crore rupees, whichever is less" shall be
substituted;
(iii) in clause (c), for the words "a penalty not exceeding ten
thousand rupees for every day during which the failure continues", the
words "a penalty of one lakh rupees for each day during which such
failure continues or one crore rupees, whichever is ess" shall be
substituted.
10.
Amendment of section 15B.
10. Amendment of section 15B.-In section 15B of the principal Act,
for the words "a penalty not exceeding five lakh rupees for every such
failure", the words "a penalty of one lakh rupees for each day during
which such failure continues or one crore rupe s, whichever is less"
shall be substituted.
11.
Substitution of new section for section 15C.
11. Substitution of new section for section 15C.-For section 15C of
the principal Act, the following section shall be substituted,
namely:-
"15C. Penalty for failure to redress investors' grievances.-If any
listed company or any person who is registered as an intermediary,
after having been called upon by the Board in writing, to redress the
grievances of investors, fails to redress such gri vances within the
time specified by the Board, such company or intermediary shall be
liable to a penalty of one lakh rupees for each day during which such
failure continues or one crore rupees, whichever is less.".
12.
Amendment of section 15D.
12. Amendment of section 15D.-In section 15D of the principal Act,-
(i) in clause (a), for the words "a penalty not exceeding ten thousand
rupees for each day during which he carries on any such collective
investment scheme including mutual funds, or ten lakh rupees,
whichever is higher", the words "a penalty of one lakh rupees for each
day during which he sponsors or carries on any such collective
investment scheme including mutual funds, or one crore rupees,
whichever is less" shall be substituted;
(ii) in clause (b), for the words "a penalty not exceeding ten
thousand rupees for each day during which such failure continues or
ten lakh rupees, whichever is higher", the words "a penalty of one
lakh rupees for each day during which such failure conti ues or one
crore rupees, whichever is less" shall be substituted;
(iii) in clause (c), for the words "a penalty not exceeding five
thousand rupees for each day during which such failure continues or
five lakh rupees, whichever is higher", the words "a penalty of one
lakh rupees for each day during which such failure co tinues or one
crore rupees, whichever is less" shall be substituted;
(iv) in clause (d), for the words "a penalty not exceeding one
thousand rupees for each day during which such failure continues", the
words "a penalty of one lakh rupees for each day during which such
failure continues or one crore rupees, whichever is l ss" shall be
substituted;
(v) in clause (e), for the words "a penalty not exceeding one thousand
rupees for each day during which such failure continues", the words "a
penalty of one lakh rupees for each day during which such failure
continues or one crore rupees, whichever is le s" shall be
substituted;
(vi) in clause (f), for the words "a penalty not exceeding five lakh
rupees for each such failure", the words "a penalty of one lakh rupees
for each day during which such failure continues or one crore rupees,
whichever is less" shall be substituted.
13.
Amendment of section 15E.
13. Amendment of section 15E.-In section 15E of the principal Act,
for the words "a penalty not exceeding five lakh rupees for each such
failure", the words "a penalty of one lakh rupees for each day during
which such failure continues or one crore rupee , whichever is less"
shall be substituted.
14.
Amendment of section 15F.
14. Amendment of section 15F.-In section 15F of the principal Act,-
(i) in clause (b), for the words "a penalty not exceeding five
thousand rupees for each day during which such failure continues", the
words "a penalty of one lakh rupees for each day during which such
failure continues or one crore rupees, whichever is l ss" shall be
substituted;
(ii) in clause (c), for the words "a penalty not exceeding five
thousand rupees", the words "a penalty of one lakh rupees" shall be
substituted.
15.
Amendment of section 15G.
15. Amendment of section 15G.-In section 15G of the principal Act,
for the words "not exceeding five lakh rupees", the words "twenty-five
crore rupees or three times the amount of profits made out of insider
trading, whichever is higher" shall be substit ted.
16.
Amendment of section 15H.
16. Amendment of section 15H.-In section 15H,-
(a) after clause (ii), the following clauses shall be inserted,
namely:-
"(iii) make a public offer by sending letter of offer to the
shareholders of the concerned company; or
(iv) make payment of consideration to the shareholders who sold their
shares pursuant to letter of offer,";
(b) for the words "not exceeding five lakh rupees", the words
"twenty-five crore rupees or three times the amount of profits made
out of such failure, whichever is higher" shall be substituted.
17.
Insertion of new sections 15HA and 15HBAfter section 15H of theprincipal Act,
the following sections shall be inserted, namely:-
17. Insertion of new sections 15HA and 15HBAfter section 15H of the
principal Act, the following sections shall be inserted, namely:-
"15HA. Penalty for fraudulent and unfair trade practices.-If any
person indulges in fraudulent and unfair trade practices relating to
securities, he shall be liable to a penalty of twenty-five crore
rupees or three times the amount of profits made out of such
practices, whichever is higher.
15HB. Penalty for contravention where no separate penalty has been
provided.-Whoever fails to comply with any provision of this Act, the
rules or the regulations made or directions issued by the Board
thereunder for which no separate penalty has been pro ided, shall be
liable to a penalty which may extend to one crore rupees.".
18.
Amendment of section 15-IIn section 15-I of the principal Act, insub-section
(1), for the word, figures and letter "and 15H", thefigures, letters and
word "15H, 15HA and 15HB" shall be substitut
18. Amendment of section 15-IIn section 15-I of the principal Act, in
sub-section (1), for the word, figures and letter "and 15H", the
figures, letters and word "15H, 15HA and 15HB" shall be substituted.
19.
Insertion of new section 15JA.-After section 15J of the principalAct, the
following section shall be inserted, namely.
19. Insertion of new section 15JA.-After section 15J of the principal
Act, the following section shall be inserted, namely:-
"15JA. Crediting sums realized by way of penalties to Consolidated
Fund of India.-All sums realised by way of penalties under this Act
shall be credited to the Consolidated Fund of India.".
20.
Substitution of new sections for sections 15L and 15M.
20. Substitution of new sections for sections 15L and 15M.-For
sections 15L and 15M of the principal Act, the following sections
shall be substituted, namely:-
"15L. Composition of Securities Appellate Tribunal.-A Securities
Appellate Tribunal shall consist of a Presiding Officer and two other
Members, to be appointed, by notification, by the Central Government :
Provided that the Securities Appellate Tribunal, consisting of one
person only, established before the commencement of the Securities and
Exchange Board of India (Amendment) Act, 2002, shall continue to
exercise the jurisdiction, powers and authority con erred on it by or
under this Act or any other law for the time being in force till two
other Members are appointed under this section.
15M. Qualification for appointment as Presiding Officer or Member of
Securities Appellate Tribunal.-(1) A person shall not be qualified for
appointment as the Presiding Officer of a Securities Appellate
Tribunal unless he is a sitting or retired Judge of the Supreme Court
or a sitting or retired Chief Justice of a High Court :
Provided that the Presiding Officer of the Securities Appellate
Tribunal shall be appointed by the Central Government in consultation
with the Chief Justice of India or his nominee.
(2) A person shall not be qualified for appointment as Member of a
Securities Appellate Tribunal unless he is a person of ability,
integrity and standing who has shown capacity in dealing with problems
relating to securities market and has qualification nd experience of
corporate law, securities laws, finance, economics or accountancy:
Provided that a member of the Board or any person holding a post at
senior management level equivalent to Executive Director in the Board
shall not be appointed as Presiding Officer or Member of a Securities
Appellate Tribunal during his service or tenur as such with the Board
or within two years from the date on which he ceases to hold office as
such in the Board.".
21.
Substitution of new section for section 15N.
21. Substitution of new section for section 15N.-For section 15N of
the principal Act, the following section shall be substituted,
namely:-
"15N. Tenure of office of Presiding Officer and other Members of
Securities Appellate Tribunal.-The Presiding Officer and every other
Member of a Securities Appellate Tribunal shall hold office for a term
of five years from the date on which he enters up n his office and
shall be eligible for re-appointment :
Provided that no person shall hold office as the Presiding Officer of
the Securities Appellate Tribunal after he has attained the age of
sixty-eight years:
Provided further that no person shall hold office as a Member of the
Securities Appellate Tribunal after he has attained the age of
sixty-two years.".
22.
Amendment of section 15-O.
22. Amendment of section 15-O.-In section 15-O of the principal Act,-
(a) for the words "Presiding Officer of a Securities Appellate
Tribunal", the words "Presiding Officer and other Members of a
Securities Appellate Tribunal" shall be substituted;
(b) in the proviso, for the words "said Presiding Officers", the words
"Presiding Officer and other Members of a Securities Appellate
Tribunal" shall be substituted.
23.
Amendment of section 15P.
23. Amendment of section 15P.-In section 15P of the principal Act,
for the words "office of the Presiding Officer", the words "the office
of the Presiding Officer or any other Member," shall be substituted.
24.
Amendment of section 15Q.
24. Amendment of section 15Q.-In section 15Q of the principal Act, -
(a) in sub-section (1),-
(i) for the words "Presiding Officer of a Securities Appellate
Tribunal", the words "the Presiding Officer or any other Member of a
Securities Appellate Tribunal" shall be substituted;
(ii) in the proviso, for the words "the said Presiding Officer", the
words "the Presiding Officer or any other Member" shall be
substituted;
(b) in sub-section (2), for the words "Presiding Officer" at both the
places where they occur, the words "Presiding Officer or any other
Member" shall be substituted;
(c) in sub-section (3), for the words "aforesaid Presiding Officer",
the words "the Presiding Officer or any other Member" shall be
substituted.
25.
Amendment of section 15R.
25. Amendment of section 15R.-In section 15R of the principal Act,
for the words "Presiding Officer", the words "Presiding Officer or a
Member" shall be substituted.
26.
Substitution of new section for section 15X.
26. Substitution of new section for section 15X.-For section 15X of
the principal Act, the following section shall be substituted,
namely:-
"15X. Presiding Officer, Member and staff of Securities Appellate
Tribunals to be public servants.-The Presiding Officer, Members and
other officers and employees of a Securities Appellate Tribunal shall
be deemed to be public servants within the meaning of section 21 of
the Indian Penal Code (45 of 1860).".
27.
Substitution of new section for section 15Z.
27. Substitution of new section for section 15Z.-For section 15Z of
the principal Act, the following section shall be substituted,
namely:-
"15Z. 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 Appellat 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
applicant 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.".
28.
Amendment of section 24.
28. Amendment of section 24.-In section 24 of the principal Act, -
(a) in sub-section (1), for the words "one year, or with fine, or with
both", the words "ten years, or with fine, which may extend to
twenty-five crore rupees or with both" shall be substituted;
(b) in sub-section (2), for the words "three years or with fine which
shall not be less than two thousand rupees but which may extend to ten
thousand rupees or with both", the words "ten years or with fine,
which may extend to twenty-five crore rupees or with both" shall be
substituted.
29.
Insertion of new sections 24A and 24B.
29. Insertion of new sections 24A and 24B.-After section 24 of the
principal Act, the following sections shall be inserted, namely :-
"24A. 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 wi h 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.
24B. 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 hereunder, has made a
full and true disclosure in respect of the 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 ade 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.
(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 grant d 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 beco e liable to the imposition of any
penalty under this Act to which such person would have been liable,
had not such immunity been granted.".
30.
Amendment of section 26.
30. Amendment of section 26.-In section 26 of the principal Act, in
sub-section (2), for the words "a Metropolitan Magistrate or a
Judicial Magistrate of the first class", the words "a Court of
Session" shall be substituted.
31.
Amendment of section 29.
31. Amendment of section 29.-In section 29 of the principal Act, in
sub-section (2),-
(i) in clause (db), for the words "Presiding Officers", the words
"Presiding Officers, Members" shall be substituted;
(ii) in clause (dc), for the words "Presiding Officers", the words
"Presiding Officers, or other Members" shall be substituted.
32.
Repeal and saving.
32. Repeal and saving.-(1) The Securities and Exchange Board of India
(Amendment) Ordinance, 2002 (Ord. 6 of 2002), is hereby repealed.
(2) Notwithstanding the repeal of the Securities and Exchange Board of
India (Amendment) Ordinance, 2002 (Ord. 6 of 2002), anything done or
any action taken under the principal Act as amended by the said
Ordinance, shall be deemed to have been done or ta en under the
principal Act, as amended by this Act.
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SUBHASH C. JAIN,
Secy. to the Govt. of India.
