In Brief
PC Jeweller Ltd. investigated appellants Balram Garg, Sachin Gupta, Shivani Gupta, and Amit Garg for insider trading based on share sales during periods of unpublished price-sensitive information (UPSI) regarding a buy-back offer. SEBI and the Tribunal found them liable as "insiders" based on family relationships and trading patterns. The Supreme Court allowed the appeals, holding that: (1) Once established they were neither "connected persons" nor "immediate relatives" under regulations, relying on relationship to prove UPSI possession was legally untenable; (2) SEBI bore the burden to prove possession of UPSI through cogent evidence, not trading patterns alone; (3) Family estrangement through dated arrangements created breakdown of personal and professional ties predating the alleged UPSI periods; and (4) circumstantial evidence must form a complete chain excluding innocence—mere trading patterns do not suffice.
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