REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No.563 of 2020
SECURITIES AND EXCHANGE BOARD OF INDIA ...APPELLANT(S)
VERSUS
ABHIJIT RAJAN ...RESPONDENT(S)
JUDGMENT
V. Ramasubramanian
1. The Securities and Exchange Board of India has come up with the
above appeal, challenging an Order of the Securities Appellate Tribunal,
by which the Order of its Whole Time Member (for short “WTM”)
directing the respondent to disgorge the amount of unlawful gains made
by him, was set aside.
2. We have heard Mr. Arvind P. Datar, learned senior counsel for the
appellant and Mr. Somasekhar Sundaresan, learned counsel appearing
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through successfully, the parent company of GIPL namely, Gammon
India Ltd., could have gone for bankruptcy.
33. Therefore, the Tribunal was right in thinking that the
respondent had no motive or intention to make undeserved gains by
encashing on the unpublished price sensitive information that he
possessed.
34. As a matter of fact, the Tribunal found that the closing price of
shares rose, after the disclosure of the information. This shows that
the unpublished price sensitive information was such that it was
likely to be more beneficial to the shareholders, after the disclosure
was made. Any person desirous of indulging in insider trading, would
have waited till the information went public, to sell his holdings. The
respondent did not do this, obviously on account of a pressing
necessity.
35. We agree with the contention of Shri Arvind P. Datar, learned
senior counsel for the appellant, that the allegation of insider trading
cannot be measured in terms of the value of the contracts terminated
and the percentage of shares sold and that the theory of
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45. In view of our answers to Question Nos. 1 and 2, we are of the view
that there is no necessity to go into Question No.3. Our answers to
Question Nos. 1 and 2 are sufficient to hold that the impugned order of
the Tribunal does not call for any interference. Therefore, the appeal is
dismissed. There will be no order as to costs.
…..…………....................J.
(Indira Banerjee)
.…..………......................J
(V. Ramasubramanian)
NEW DELHI
SEPTEMBER 19, 2022
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