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Securities and Exchange Board Act, 1992: s.12(1 B) - Interpretation of - Held: Persons governed by substantive provision of s.12(JB) (Non-proviso category), that is, c those who had not commenced the activity of sponsoring or carrying on a collective investment scheme prior to 25.01.1995 are permitted to commence activities only after obtaining a certificate of registration - While, persons covered under the proviso category, that is, those who were already carrying on such activities were D permitted to continue their activities and after the framing of concerned regulations, they could continue the said activities only after obtaining a certificate of registration - In other words, a new ยท entrepreneur desirous of sponsoring or carrying on any activity in the nature of collective investment for the first time after 25.1.1995, could do so only after he/it had obtained a certificate of registration E from 'the Board', in accordance with the Collective Investment Regulations - Therefore, till such time the Regulations were framed by 'the Board' uls.12(1 B), and a certificate of registration was obtained, no fresh entry could be made in the field of collective investment, by a per.>onlentity not already carrying on such activity - F Securities and Exchange .Board of India (Collective Investment Schemes) Regulations, 1999. s. 12(1 B) - Bar under - Held: Any person/entity not falling in the proviso category (an "existing" operator, of a collective investment scheme) was barred from coi11111e11cing to sponsor or carry on any collective investment activity, after the insertion of s.12(1 B) G into the SEBI Act, till such time as he/it had obtained a certificate of registration from 'the Board', in accordance with the Collective Investment Regulations - The said bar would, therefore, undoubtedly extend till the framing of the regulations - The bar, would further extend, even beyond the framing of the above regulations, till theconcerned new entrepreneur was successful in obtaining a certificate of registration - Therefore, the period during which the concerned activities were barred (for the non-proviso category) u/s.12(1 B) co111111enced fro111 the date of insertion of s.12(1 B) into the SEBI Act (25.1.1995), and subsisted upto, the actual date when the new entrepreneur obtained a certificate of registration. s.12(1B) - Mandatory or directory provision - Held: Use of negative words in conjunction with the word "shall" makes the legislative intent absolutely clear, and also mandatory with reference to those not already engaged in collective investment operations - Further, contravention of s.12(1 B) entails penal consequences, and therefore, cannot be construed as directory - The bar created for new operators, of a collective investment initiative, was, therefore, absolute and manda_tory. Securities and Exchange Board of India (Collective Investment Sche111es) Regulations, 1999: Regn. 5 - "existing collective invest111ent scheme" - Connotation of - Held: An existing collective investment scheme, at the time of notification of the regulations, could only be one which had com111enced its activities prior to 25.1.1995 - A collective investment scheme, which commenced after 25.1.1995, could not be described as an "existing" collective investment scheme, because the same was statutorily barred, and wholly impermissible in law. Criminal jurisprudence: Held: There can be no doubt whatsoever, that the particulars of the offeni;e, of which an accused is charged, have to be clearly stated to him - No amount of evidence can be looked into, for an accusation not levelled or m,vfe out, in a complaint - This is one of the basic tenets of the criminal ;urisprudence. Code of Criminal Procedure, 1973: G H s.251 - Scope of- Where implications of various proviso to a section are different, mere mention of section in complaint would not amount to disclosing to the accused, the particulars of the offence of which they were accused - In the instant case, in the complaint, director of the company was accused of violating s.12(1 B) of SEBI Act - s.12(1 BJ has two categories for two class of persons - Implications for proviso category and the non-proviso category aredifferent -A perusal of the charge-sheet reveals, that the respondents were being treated as belonging to the proviso category - But 'the Board' treated them as belonging to the non-proviso category - This is clearly impermissible - s.251 will not remedy the above defect and deficiency in the complaint - Securities and Exchange Board Act, 1992. A s.465 - Omissions or irregularities in matters of procedure - Held: There can be no doubt that omissions and/or irregularities in matters of procedure can be overlooked, subject to the condition, that such an omission or irregularity does not occasion "failure of iustice" - Lack of material facts, which are vital to establish the ingredients of an offence, cannot be viewed as a procedural omission - The above requirement is not procedural, but substantive - irregularity and omission in the present case, in not disclosinR to the accused, the particulars of the offence for which they were being proceeded against, would occasion "failure of ;ustice" - Practice and Procedure - Procedural irregularitie |
