In Brief
Two private companies challenged SEBI penalty orders imposing Rs 1 crore each for failing to comply with investigative summons in a market manipulation probe involving Ketan Parekh and the scrip STIL. The companies argued the penalty was excessive and that amended penalty provisions should not apply. The Supreme Court upheld the penalty, holding that fresh summons in April 2003 constituted new offences triggering the amended (higher) penalty cap of Rs 1 crore. The Court confirmed the companies fell within SEBI's jurisdiction as persons "associated with the market," and that proportionality review applies only where penalties are wholly arbitrary or distinctly disproportionate, not here given the grave manipulation and obstruction of investigations.
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