SEBI inquiry powers extend to buyers and sellers of securities, with summons and document requests upheld for lawful investigation.

SEBI's duty under section 11(1) of the SEBI Act is of wide amplitude, and the inquiry powers are not confined to the illustrative measures listed in section 11(2). Persons associated with the securities market can include buyers and sellers of securities, not only intermediaries. The 1995 Regulations also authorise investigation into the conduct of any person buying, selling or otherwise dealing in securities and require cooperation, disclosure and production of documents. SEBI may therefore summon such persons and call for information and documents when necessary for a lawful inquiry.

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Issues: Whether SEBI could summon purchasers of securities and call for information from them while conducting an inquiry under the Securities and Exchange Board of India Act, 1992; and whether the powers under section 11 extend beyond the categories specifically mentioned in section 11(2).

Analysis: Section 11(1) casts a broad duty on the Board to protect investors and regulate the securities market, and the measures listed in section 11(2) are illustrative and not exhaustive. The expression "persons associated with the securities market" is of wide import and is not confined to the narrower categories suggested by the petitioners. A buyer or seller of securities transacting through the market is itself connected with that market and may fall within the reach of inquiry. The 1995 Regulations, framed under section 30 and laid before Parliament under section 31, specifically authorise investigation into the conduct of any person buying, selling or otherwise dealing in securities and require cooperation, disclosure, and production of documents. The power to seek information and documents in aid of inquiry is also supported by the principles reflected in section 30 of the Code of Civil Procedure, 1908.

Conclusion: SEBI had the power to summon the petitioners and require information and documents in connection with the inquiry, and the challenge to the summons failed.

Final Conclusion: The petitions were rejected on merits because the statutory scheme empowered SEBI to investigate securities transactions and reach buyers as well as intermediaries where necessary for effective inquiry.

Ratio Decidendi: The statutory duty to protect investors under section 11(1) of the SEBI Act is of wide amplitude, and the powers conferred for inquiry and investigation are not confined to the illustrative categories in section 11(2), so SEBI may summon and seek information from any person connected with the securities transaction when required for a lawful inquiry.

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