In Brief
The Supreme Court held that while Section 24A of the SEBI Act does not expressly require SEBI's consent to compound offences, a SAT or Court must seek SEBI's views before deciding. These views, unless manifestly arbitrary or mala fide, deserve high deference. The Court cannot substitute its judgment for SEBI's expert assessment of an offence's gravity and market impact. In this case, involving alleged share price manipulation through mis-utilization of IPO funds, the appellant sought compounding. The Court upheld rejection of the application, finding the allegations involved serious acts impinging on investor protection and market stability—matters of public character not amenable to compounding regardless of restitution.
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