Issues: (i) Whether sale of securities by persons admittedly in possession of unpublished price sensitive information constitutes insider trading under Regulation 4(1) of the 2015 PIT Regulations notwithstanding the stated use of sale proceeds or absence of profit; (ii) Whether disgorgement of loss averted and penalties for breach of the code of conduct were sustainable; (iii) Whether the penalty imposed on the first respondent under Section 15G required modification.

Issue (i): Whether sale of securities by persons admittedly in possession of unpublished price sensitive information constitutes insider trading under Regulation 4(1) of the 2015 PIT Regulations notwithstanding the stated use of sale proceeds or absence of profit.

Analysis: Regulation 4(1) creates a presumption that trades by a person possessing unpublished price sensitive information are motivated by that information. Its note makes the purpose of trading and use of proceeds irrelevant once possession of such information and trading are established, unless the insider proves innocence through the specified or analogous exonerating circumstances. The respondents admittedly possessed the information and sold substantial or entire shareholdings during the relevant period, without bringing their transactions within any defence. The word "including" makes the stated defences non-exhaustive, but any additional defence must be of a similar nature; it cannot encompass a legitimate corporate-purpose defence excluded by the 2015 regulatory scheme. The position under the predecessor 1992 regulations did not govern the transactions.

Conclusion: The respondents committed insider trading; this issue is in favour of the appellant.

Issue (ii): Whether disgorgement of loss averted and penalties for breach of the code of conduct were sustainable.

Analysis: The respondents' insider trading resulted in avoidance of losses. The statutory power to issue directions includes disgorgement equivalent to wrongful gain or loss averted through contravention. The findings supporting the code-of-conduct penalties were also sustained.

Conclusion: Disgorgement of the loss averted and the penalties for breach of the code of conduct are valid; this issue is in favour of the appellant.

Issue (iii): Whether the penalty imposed on the first respondent under Section 15G required modification.

Analysis: Applying the statutory factors and the cumulative facts and circumstances, the penalty of Rs. 25 lakh imposed on the first respondent was considered excessive.

Conclusion: The first respondent's Section 15G penalty is reduced to Rs. 10 lakh; this issue is in favour of the first respondent.

Final Conclusion: The statutory prohibition is attracted by trading while in possession of unpublished price sensitive information, subject only to proof of a recognised exonerating circumstance. The order imposing market-access restraints, disgorgement, and code-of-conduct penalties is reinstated, with a reduced insider-trading penalty for the first respondent.

Ratio Decidendi: Under Regulation 4(1) of the 2015 PIT Regulations, trading by a person in possession of unpublished price sensitive information is presumed motivated by that information, and the trader's purpose or application of proceeds cannot rebut the prohibition unless an applicable exonerating circumstance is established.

Issues: (i) Whether failure to conduct the required due diligence before investing in debt securities breached the mutual-fund regulatory framework; (ii) whether extending the maturity of securities and partially redeeming close-ended schemes after their maturity dates was permissible where investors suffered no loss or obtained gains; (iii) whether inadequate disclosure to unitholders and SEBI constituted a regulatory violation; and (iv) whether the penalties imposed on the asset management company, trustee and senior executives required interference.

Issue (i): Whether the appellants failed to exercise the due diligence required before investing in the relevant debt securities.

Analysis: The regulatory framework required a high standard of diligence and care in evaluating investments. The material showed that the investment decision relied substantially on collateral and the reputation of the group, despite the financial weakness of the issuing entities and the absence of adequate analysis of credit, liquidity and interest-rate risks. The regulator's reasoned findings on this specialised issue were entitled to deference and were not shown to be manifestly perverse.

Conclusion: The appellants breached the applicable due-diligence obligations.

Issue (ii): Whether extending the maturity of the securities beyond the maturity dates of the close-ended schemes and withholding part of the redemption proceeds was permissible because no investor loss occurred and investors ultimately gained.

Analysis: Regulation 33(4), read with Regulation 39(1), required full redemption and winding up of a close-ended scheme at the end of its fixed maturity period unless a valid rollover was undertaken after the prescribed disclosures and written consent of the unitholders. No such rollover occurred. Investor gain, absence of complaints, or avoidance of a possible loss could not excuse a breach because the regulatory scheme was consequence-neutral and mandatory. Reliance on the segregated-portfolio framework also failed because its prescribed procedure was not followed.

Conclusion: The extension of maturity and delayed partial redemption violated the applicable regulations, and the alleged absence of investor loss or resulting gain was no defence.

Issue (iii): Whether the appellants failed to provide the disclosures required to unitholders and SEBI.

Analysis: The statutory framework required material information concerning the proposed course of action to be disclosed to unitholders and the regulator. The relevant decisions and arrangements were not disclosed to SEBI before implementation, and the unitholders were not given the prescribed opportunity to consent to a rollover. The trustee also failed to independently assess compliance and the interests of the unitholders.

Conclusion: The appellants committed a regulatory violation by failing to make the required disclosures and by adopting a course not authorised by the regulatory framework.

Issue (iv): Whether the penalties imposed on the asset management company, trustee and senior executives warranted interference, including on the ground that the absence of investor prejudice was mitigating.

Analysis: Under the applicable penalty provisions, proof of contravention was sufficient and mens rea was not required unless the statute so provided. The merits findings disclosed established violations, and the penalties imposed on the asset management company and trustee were not excessive or otherwise warranting interference. Given the senior executives' expertise and their role in exposing unitholders to regulatory and financial risk, the absence of ultimate investor prejudice did not justify waiver or reduction of their penalties.

Conclusion: The penalties imposed on all appellants did not warrant interference.

Final Conclusion: Regulatory compliance governing mutual-fund schemes is mandatory and cannot be displaced by commercial expediency, investor gains, or the avoidance of a possible loss. The findings of violation and the penalties were sustained.

Ratio Decidendi: A breach of mandatory mutual-fund regulations is actionable irrespective of investor gain, absence of loss, absence of complaints, or lack of mens rea where the penalty provisions do not require it; close-ended schemes must be redeemed and wound up at maturity unless the prescribed rollover procedure is followed.

Outcome: The appeal was disposed of without interference in the impugned order, and the question of law was left open.

Issues: (i) whether the agency agreements with twelve entities constituted a fraudulent or manipulative device under the PFUTP Regulations; (ii) whether the 9.92 crore positions in the November 2007 futures segment were valid hedges; (iii) whether the appellant used the agreements to corner open positions in the futures segment to manipulate the market; and (iv) whether sale of 1.95 crore RPL shares in the last 10 minutes on 29.11.2007 was intended to depress the share price and earn unlawful futures gains.

Analysis: The agreements created a principal-agent structure, but the Court held that the 2001 SEBI Circular did not prohibit excess positions as such and contemplated disclosure-based compliance for positions beyond the prescribed limits. The Court further held that position limits under the 2001 framework applied across all derivative contracts on the underlying stock, not merely one settlement series, and therefore the respondent's series-specific cornering theory was flawed. On fraud, the Court interpreted Regulation 2(1)(c) of the PFUTP Regulations purposively and held that, in the absence of proved manipulation and inducement, the higher burden to establish a fraudulent device was not discharged. On hedging, the Court accepted that the futures positions were taken against the risk arising from the proposed sale of 22.5 crore RPL shares, and held that a perfect 1:1 hedge was not a legal requirement. On the alleged last-minute price depression, the Court held that the surrounding circumstances did not establish a deliberate attempt to depress price, and that suspicion and motive alone were insufficient.

Conclusion: The agreements did not, by themselves, amount to fraud or manipulation; the futures positions were valid hedges; cornering as alleged was not established as manipulative; and the last-minute sales on 29.11.2007 were not proved to be a price-depressing scheme.

Final Conclusion: The Court set aside the finding of fraud and the disgorgement order, but sustained the penalty for violation of the disclosure requirements under the 2001 SEBI Circular. The appeal was therefore only partly successful.

Ratio Decidendi: Excess derivative positions taken through agents do not attract PFUTP fraud liability unless manipulation is independently established on a higher preponderance standard, and a disclosure-based position-limit breach under the applicable circular does not by itself render the trades fraudulent or void.

Outcome: The Special Leave Petitions were dismissed and the accompanying interlocutory application(s), if any, were disposed of.

Issues: Whether the delay in filing the appeal against the Securities Appellate Tribunal's order should be condoned on payment of costs and the appeal restored for decision on merits.

Analysis: The delay was explained by personal difficulties, financial strain during the pandemic, illness in the family, and difficulty in receiving the impugned order after a change of address. The Court also treated the statutory first appeal as a valuable remedy on facts and considered that the appellant should have an opportunity to contest the matter before the appellate forum.

Conclusion: The delay was condoned subject to payment of costs, and the appeal was restored for adjudication on merits.

Ratio Decidendi: Delay in a first appeal may be condoned where the explanation shows sufficient cause and denial of an appellate hearing would unjustly foreclose a valuable factual remedy.

Outcome: Special leave petitions were dismissed with liberty to proceed in accordance with law.

Outcome: The special leave petition was dismissed; the Court found no reason to interfere under Article 136 of the Constitution of India.

Outcome: The civil appeal was dismissed, while time was granted to the appellant to file a response to the show-cause notice.

Issues: Whether the Securities Appellate Tribunal was justified in setting aside the Adjudicating Officer's orders and exonerating the respondents for alleged violations of the SEBI (PFUTP) Regulations and provisions of the Securities Contracts (Regulation) Act, 1956, by relying on a post-facto shareholders' ratification and related amendments.

Analysis: The decisive legal framework comprises the SEBI Act, the PFUTP Regulations, the SCRA provisions on listing conditions, and disclosure rules under Regulation 73 of the ICDR Regulations and related company law rules. The PFUTP Regulations define fraud expansively and prohibit dealing in securities by employing manipulative, deceptive or fraudulent devices including concealment and promises without intent to perform. The statutory and regulatory regime requires fair disclosure of the objects for which issue proceeds are raised and imposes reporting obligations for deviations in utilization. The facts establish that proceeds from the preferential allotment were transferred out and utilised for investments and loans immediately after receipt, contrary to the objects disclosed in the explanatory statement to the notice for the meeting. A later amendment to the memorandum of association and a shareholders' resolution purportedly ratifying past utilisation occurred only after regulatory intervention and after the funds had been diverted. Where the conduct impacts multiple stakeholders and involves breach of public regulatory norms, private ratification cannot validate or sanitize an act incompatible with statutory disclosure obligations or that amounts to fraud under PFUTP Regulations. The regulatory scheme contemplates public law protections that cannot be undone by subsequent shareholder approval; illegality affecting public rights cannot be ratified. The parallel exercise of different SEBI powers by separate authorities in the period in question did not render the adjudication by the Adjudicating Officer impermissible.

Conclusion: The appellate order setting aside the Adjudicating Officer's penalty findings and relying on the post-facto shareholders' ratification is unsustainable; the Adjudicating Officer's order imposing penalties for violations of the PFUTP Regulations and related listing and disclosure obligations is restored in favour of the regulator.

Issues: (i) Whether this Court should interfere with the Securities Appellate Tribunal's judgment dated 22.01.2026; (ii) Whether the appellants are entitled to withdraw Rs. 2.25 crores to meet monthly expenditure as interim relief.

Issue (i): Whether this Court should interfere with the Securities Appellate Tribunal's judgment dated 22.01.2026.

Analysis: The Court reviewed the appellate scope and concluded that there are no grounds warranting interference with the Tribunal's directions. The Court emphasised deference to the Tribunal's orders and found no basis in the material before it to vary those directions. The respondent is accordingly permitted to enforce the Tribunal's directions.

Conclusion: The appeal against the Securities Appellate Tribunal's judgment is dismissed; the decision of the Tribunal is upheld in favour of the respondent.

Issue (ii): Whether the appellants are entitled to withdraw Rs. 2.25 crores to meet monthly expenditure as interim relief.

Analysis: While declining to disturb the Tribunal's substantive directions, the Court considered the appellants' interim needs and allowed a limited, specific withdrawal to meet monthly expenditure. The Court qualified this relief by noting that it has not varied the Tribunal's directions and that the respondent remains entitled to enforce those directions.

Conclusion: The appellants are permitted to withdraw Rs. 2.25 crores for monthly expenditure; this interim relief is granted in favour of the appellants without affecting the enforceability of the Tribunal's directions.

Final Conclusion: The appeal is dismissed while granting a limited interim withdrawal of Rs. 2.25 crores to the appellants; the Tribunal's directions remain enforceable by the respondent.

Ratio Decidendi: An appellate court will not interfere with a tribunal's orders in the absence of valid grounds for disturbance, but may grant limited interim relief to meet urgent exigencies while preserving the enforceability of the tribunal's directions.

Outcome: The Special Leave Petition was dismissed and the interlocutory application(s), if any, stood disposed of.

Issues: (i) Whether the Securities and Exchange Board of India is empowered to take evidence under Section 11C of the SEBI Act, 1992 and whether the Securities Appellate Tribunal may conduct proceedings under Section 15U of the SEBI Act, 1992; (ii) Whether external enquiry reports that do not form part of the Board's investigation/enquiry can be relied upon by the Board or the Appellate Tribunal; (iii) Whether the imposition of costs of Rs.5,00,000 on the appellant was justified.

Issue (i): Whether the Securities and Exchange Board of India is empowered to take evidence under Section 11C of the SEBI Act, 1992 and whether the Securities Appellate Tribunal may conduct proceedings under Section 15U of the SEBI Act, 1992.

Analysis: The Court examined statutory powers conferred by the SEBI Act and observed that the Board is specifically empowered to take evidence for determining disputes, and that the Appellate Tribunal, while exercising appellate jurisdiction, is empowered to effectively conduct its proceedings under the cited provision.

Conclusion: The Securities and Exchange Board of India is empowered to take evidence under Section 11C of the Securities and Exchange Board of India Act, 1992 and the Securities Appellate Tribunal is empowered to conduct proceedings under Section 15U of the Securities and Exchange Board of India Act, 1992.

Issue (ii): Whether external enquiry reports that do not form part of the Board's investigation/enquiry can be relied upon by the Board or the Appellate Tribunal.

Analysis: The Court considered the evidentiary basis required for decisions by the Board and the Appellate Tribunal and emphasised that decisions must be founded on evidence brought on record; external enquiry reports which are not part of the Board's own investigation/enquiry lack the necessary evidentiary foundation for reliance by the statutory authorities.

Conclusion: External enquiry reports that do not form part of the Board's investigation/enquiry should not be relied upon by the Securities and Exchange Board of India or the Securities Appellate Tribunal.

Issue (iii): Whether the imposition of costs of Rs.5,00,000 on the appellant was justified.

Analysis: Applying the facts and circumstances of the case to the Court's assessment of costs, the Court reviewed the Tribunal's order imposing costs and found the imposition not justified.

Conclusion: The imposition of costs of Rs.5,00,000 on the appellant is set aside in favour of the appellant.

Final Conclusion: The appeal is disposed of with the clarifications on the Board's and the Appellate Tribunal's powers and with the costs order against the appellant set aside.

Ratio Decidendi: The Board and the Appellate Tribunal must decide disputes on the basis of evidence brought on record; Section 11C of the Securities and Exchange Board of India Act, 1992 empowers the Board to take evidence and Section 15U of the Securities and Exchange Board of India Act, 1992 empowers the Appellate Tribunal to conduct its proceedings, and external enquiry reports not part of the Board's investigation are inadmissible for reliance by those authorities.

Issues: Whether the six-month bar on taking up new assignments as a trustee of an Alternative Investment Fund was disproportionate and liable to be set aside.

Analysis: The appellant had taken remedial steps, including winding up the fund and repaying the investors, and no prejudice or loss to investors was shown. The earlier stay had continued throughout. In these circumstances, the punitive restraint was found to be excessive having regard to the nature of the alleged negligence or inaction, and the ends of justice were held to be met by interference with the impugned order.

Conclusion: The restraint was set aside and the appeal was allowed, with the bar on new trustee assignments treated as having expired.

Outcome: The appeal was dismissed and the impugned order of the Securities Appellate Tribunal was not interfered with.