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Free Study Materials for SEBI
Grade A Examination
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List of Landmark Judgements

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Securities Law

Case Name Findings

Securities and Exchange The Supreme Court of India, in its judgment on the Sahara v. SEBI

Board of India (SEBI) vs. case, issued several pivotal directives:

Sahara India Real Estate

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Corporation Ltd. & Ors. 1. Sahara was mandated to refund the entire sum of

(2012) deposits it had amassed, coupled with a 15% interest rate

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until the refund date. This measure aimed to safeguard

the interests of investors impacted by the OFCD issue,

ensuring they received appropriate compensation.

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2. The Supreme Court not only affirmed SEBI's authority but

also bolstered it, granting the regulator legal mechanisms

to enforce the refund decree. This action underscored the

Court’s dedication to investor protection and regulatory

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supervision in financial markets, enhancing SEBI’s ability to

uphold market integrity.

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3. In response to non-compliance with the refund order, the

Court issued a non-bailable warrant for the arrest of

Sahara Chairman and other relevant individuals. This step

emphasized the imperative of adhering to the Court's

mandates and complying with SEBI’s regulatory

framework, reinforcing the seriousness of regulatory

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 enforcement.

SEBI vs. Kishore R. Ajmera 1. In the case of SEBI vs. Kishore R. Ajmera (2015), the

(2015) Supreme Court affirmed SEBI's authority to probe and

address fraudulent and unfair trade practices.

2. The judgment reinforced SEBI's pivotal role in

safeguarding the interests of investors by enabling it to

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investigate and penalize entities engaged in deceptive

market activities.

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3. This ruling underscored the regulatory authority's

mandate to maintain market integrity, transparency, and

investor confidence.
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4. Therefore, this case serves as a significant precedent,

emphasizing the need for regulatory vigilance to curb

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market abuses and protect the interests of investors.

Satyam Computer Services 1. In this case, Satyam Computer Services, one of India's

Ltd. vs. SEBI (2011) leading IT companies, was embroiled in a massive

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corporate fraud scandal. The company's founder and

chairman, Ramalinga Raju, confessed to falsifying financial

statements, inflating revenue, and fabricating bank

balances, shocking investors and shaking confidence in

India's corporate governance standards.

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 2. Following the disclosure of the fraud, SEBI initiated an

investigation into Satyam and its executives for violating

securities laws and regulations. SEBI found evidence of

insider trading and fraudulent practices by Satyam's

management, including Raju, who had sold shares before

the fraud was made public.

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3. The Securities Appellate Tribunal (SAT) upheld SEBI's

findings of insider trading and fraudulent activities against

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Satyam and its executives. The tribunal emphasized the

need to protect investors and maintain the integrity of the

securities market.
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4. As a result, SAT upheld SEBI's imposition of penalties on

Satyam and its executives, including Raju, for their role in

the fraud. The case highlighted the importance of

regulatory oversight and enforcement in ensuring

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transparency, accountability, and investor confidence in

India's capital markets.

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SEBI vs. Price Waterhouse 1. In this case, the Supreme Court upheld SEBI's ban on their

Coopers (PWC) (2018) auditing of listed companies for a specific duration,

spotlighting auditors' accountability in financial fraud

cases and their pivotal role in corporate governance.

2. The judgment reinforced SEBI's commitment to bolstering

corporate governance standards by holding auditors

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 responsible for ensuring the accuracy and reliability of

financial reporting.

3. This decision emphasized the regulatory authority's

vigilance in maintaining market integrity, fostering investor

confidence, and deterring fraudulent practices, thus

setting a precedent for stringent oversight of auditors and

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promoting transparency and accountability in India's

financial markets.

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SEBI vs. Jignesh Shah & Anr. 1. The case focused on the National Spot Exchange Ltd.

(2019) (NSEL) scam, where fraudulent trading practices were

uncovered.
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2. It questioned SEBI's jurisdiction to regulate and penalize

NSEL for its involvement in the scam. The controversy

raised concerns about SEBI's authority to oversee spot

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exchanges and intervene in cases of market manipulation.

3. The outcome of the case had significant implications for

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SEBI's regulatory oversight and its ability to address

fraudulent activities in the commodities market.

SEBI vs. Bhavesh Pabari & 1. In this case, the focus was on insider trading allegations

Ors. (2019) and the establishment of the standard for proving such

violations.

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 2. SEBI sought to demonstrate that the trading activities in

question were characterized by "manipulative, fraudulent,

and deceptive" intentions.

3. This case underscored the importance of establishing the

intent behind insider trading actions and the need for

stringent regulatory measures to address such violations

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in the securities market.

SEBI vs. Pan Asia Advisors 1. In this case, the Supreme Court provided clarity on the

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Ltd. & Ors. (2015) definition of "securities" as outlined in the Securities

Contracts (Regulation) Act, 1956.

2. The Court emphasized that any financial instrument falling

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within the criteria specified in the definition would be

deemed a security, regardless of its name or classification.

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3. This ruling ensures a broad and inclusive interpretation of

the term "securities" for regulatory purposes.

R. K. Hazari vs. SEBI (2003) 1. In this case, the principle of natural justice was
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underscored, emphasizing the necessity of affording

parties facing regulatory action by SEBI the opportunity to

be heard.

2. This case reaffirmed the fundamental procedural fairness

that individuals or entities must be provided with before

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 any adverse actions are taken against them by regulatory

authorities.

3. The ruling emphasized the importance of due process and

ensuring that affected parties have the chance to present

their case and defend their interests.

SEBI vs. Ajay Agarwal (2010) 1. In the case of Securities and Exchange Board of India v.

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Ajay Agarwal, the Supreme Court of India ruled that SEBI

can apply the provisions of section 11B of the Securities

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and Exchange Board of India Act, 1992 retrospectively.

2. Additionally, the Court clarified that SEBI's order

restraining an individual from associating with any

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corporate body in accessing the securities market, or from

buying, selling, or dealing in securities, does not constitute

a 'penalty' or 'punishment' under the protection against ex

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post facto laws.

3. This judgment affirms SEBI's authority to enforce

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regulations retroactively and underscores the distinction

between regulatory actions and punitive measures.

CIT vs. B. C. Srinivasa 1. In this case, the concept of "substantial interest" in

Shetty (1981) securities was established, setting a precedent that had a

notable influence on the interpretation of insider trading

regulations.

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 2. While not directly related to securities law, this case

introduced the notion that substantial ownership or

control over securities could confer certain rights and

obligations.

3. This concept became pivotal in defining insider trading

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and determining the extent of influence individuals may

have over securities transactions.

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SEBI vs. Rakhi Trading Pvt. 1. In the case of Securities and Exchange Board of India vs.

Ltd. (2019) Rakhi Trading Pvt. Ltd. (2019), the Supreme Court provided

clarity on SEBI's jurisdiction regarding fraudulent and

unfair trade practices in the securities market.

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2. The judgment reaffirmed SEBI's authority to address and

penalize entities involved in market manipulation and

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fraudulent activities.

3. This ruling underscored SEBI's pivotal role in maintaining

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the integrity and fairness of the securities market,

ensuring investor protection, and upholding the regulatory

framework governing securities trading in India.

SEBI vs. Amit Kumar Singh 1. In the case of Securities and Exchange Board of India vs.

(2020) Amit Kumar Singh (2020), the Supreme Court underscored

SEBI's authority to penalize individuals for breaches of

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 securities laws.

2. The judgment upheld SEBI's imposition of penalties on an

individual involved in insider trading, highlighting the

imperative of stringent enforcement of securities

regulations to maintain market integrity and investor

confidence.

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3. This ruling reaffirmed SEBI's pivotal role in deterring

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misconduct, ensuring fair and transparent trading

practices, and upholding the regulatory framework

governing securities markets in India.

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Companies Act, 2013
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Case Name Findings

Innoventive Industries Ltd. 1. In August 2017, the Supreme Court of India delivered a

vs. ICICI Bank & Anr. (2017) landmark judgment in the case of Innoventive Industries
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Limited v. ICICI Bank Limited, marking the first

comprehensive ruling on the Insolvency and Bankruptcy

Code, 2016 (IBC).

2. The Court's decision affirmed the National Company Law

Appellate Tribunal's (NCLAT) affirmation of the National

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 Company Law Tribunal Mumbai's (NCLT) order admitting

ICICI Bank Limited's insolvency petition against

Innoventive Industries Limited.

3. The case addressed several pivotal issues regarding the

interpretation and application of the IBC. Firstly, it

elucidated the expansive definition of "default" under the

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IBC, encompassing any non-payment of debt, including

disputed financial obligations. The Court emphasized the

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importance of timely resolution and adherence to

specified timelines, crucial for the IBC's effectiveness in

expediting insolvency proceedings.

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4. Additionally, the judgment underscored the

transformative nature of the IBC, particularly in divesting

entrenched managements of defaulting corporate

debtors, thereby prioritizing debt repayment and

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corporate restructuring. It delineated the distinct

processes for initiating insolvency proceedings by financial

and operational creditors under Sections 7 and 8 of the

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IBC, respectively, emphasizing the limited scope of inquiry

for adjudicating authorities at the admission stage.

5. Furthermore, the Court clarified that a debt's disputed

status does not preclude its classification as "due" for the

purposes of initiating insolvency proceedings, provided it

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 is payable in law or fact. It stressed the adjudicating

authority's responsibility to promptly ascertain the

existence of a default, ensuring a swift and efficient

resolution process.

6. The judgment also addressed the interaction between the

IBC and other laws, such as the Maharashtra Relief

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Undertaking Act (MRU Act), ruling that the IBC supersedes

conflicting provisions of other statutes, including the MRU

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Act.

7. Overall, the ruling recognized the IBC's paradigm shift in

legal and economic policies, advocating for its efficient

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implementation through strict adherence to specified

timelines and expeditious resolution processes. The

judgment exemplifies a progressive and forward-looking

approach towards corporate insolvency resolution in

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India.

Cyrus Mistry vs. Tata Sons 1. Amid a corporate dispute, Cyrus Mistry, Executive
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Ltd. & Ors. (2019) Chairman of Tata Sons, was removed in 2016 due to

leadership concerns and alleged governance lapses.

Mistry, representing Shapoorji Pallonji Group, challenged

his ousting in court, citing oppression and

mismanagement. The rift stemmed from differences in

management styles between Mistry and Ratan Tata, the

latter taking over as interim chairman. Legal battles

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 ensued, culminating in Mistry's official removal from Tata

Sons' board in 2017.

2. In November 2017, Mr. Mistry petitioned against Tata

Sons' conversion to a Private Limited Company, alleging

misconduct by Mr. Tata and the Board. However, in July

2018, NCLT, Mumbai dismissed Mistry's claims, stating

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they were unsubstantiated. The tribunal deemed Tata

Sons' transition lawful, concluding the petition lacked

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merit.

3. Displeased with NCLT's ruling, Mr. Mistry appealed to

NCLAT, supported by Cyrus Investments Private Limited

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and Sterling Investment Corporation Private Limited. On

December 18, 2019, NCLAT overturned NCLT's decision,

reinstating Mistry as Executive Chairperson of Tata Sons. It

deemed Mr. Chandrasekaran's appointment unlawful.

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However, implementation was delayed for four weeks to

allow Tata Sons to contest. NCLAT also probed ROC's

approval of Tata Sons' transition to a private entity,

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questioning procedural details. Additionally, it addressed

the alleged oppressive nature of certain Articles of the

company and Mistry's removal.

4. In January 2020, Tata Sons appealed to the Supreme Court

to overturn NCLAT's reinstatement of Mr. Mistry as

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 chairman, arguing it undermined corporate democracy.

The Supreme Court ruled in favor of Tata, asserting that

removing a chairman isn't permissible under Section 241

of the Companies Act unless prejudicial to the company's

interest. It clarified NCLT and NCLAT lack authority to

intervene in such matters. Additionally, the Court held that

Sections 241 and 242 of the Companies Act don't

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authorize tribunals to reappoint individuals.

Serious Fraud Investigation 1. In the case of Serious Fraud Investigation Office (SFIO) vs.

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Office (SFIO) vs. Bhagyalakshmi Srinivasan & Ors. (2018), the focus was on

Bhagyalakshmi Srinivasan the SFIO's authority in probing corporate fraud as outlined

& Ors. (2018) in the Companies Act, 2013.

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2. The case underscored SFIO's pivotal role in scrutinizing

fraudulent activities within corporate entities.

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3. It shed light on the extensive powers vested in SFIO to

conduct thorough investigations into financial

irregularities, ensuring adherence to regulatory standards

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and corporate governance norms.

4. The proceedings emphasized the significance of SFIO's

role in maintaining the integrity of the corporate sector

and safeguarding the interests of stakeholders.

National Company Law 1. In the case of National Company Law Tribunal (NCLT) vs. R.

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Tribunal (NCLT) vs. R. K. K. Dalmia (2017), the focus was on interpreting Sections

Dalmia (2017) 241 and 242 of the Companies Act, 2013, pertaining to

oppression and mismanagement.

2. The proceedings delved into the legal framework

governing instances of corporate malpractice and

examined the scope of remedies available to address such

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issues.

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3. The case contributed to clarifying the statutory provisions

aimed at safeguarding the interests of stakeholders and

ensuring corporate governance.

Union of India vs. BCCI 1. In Union of India vs. BCCI (2018), the focus was on
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(2018) enforcing corporate governance reforms within the Board

of Control for Cricket in India (BCCI) as proposed by the

Lodha Committee.
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2. The case addressed the necessity of aligning the

operations of sporting bodies with principles of

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transparency, accountability, and fairness.

3. It underscored the significance of adhering to regulatory

guidelines to enhance the governance framework and

restore public trust in sports administration.

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