In Brief
Three appellants challenged penalties imposed for technical violations of insider trading regulations. The Adjudicating Officer and Securities Appellate Tribunal imposed penalties of Rs. 5–11 lakhs despite appellants' argument that the breach was technical, involving minimal transaction value with no actual gain or investor loss. The Supreme Court found itself unable to reconcile two conflicting judicial interpretations of Sections 15A and 15J of the SEBI Act regarding an Adjudicating Officer's discretion to reduce penalties. The Court referred the matter to a larger Bench, finding that accepting one interpretation would violate principles of harmonious construction and potentially breach fundamental rights, while pending the referral, interim orders protecting the appellants remained in force.
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