Takeover disclosure obligations for share sales apply separately to seller and purchaser, and insider trading disclosure does not cure default.

The disclosure requirement under Regulation 7(1A) read with Regulation 7(2) of the takeover regulations applied to both purchase and sale of shares, including transactions within the promoter group. A purchaser's disclosure did not remove the seller's separate obligation to disclose the sale, and disclosure under the insider trading regulations did not satisfy the takeover disclosure duty. The bonus-share decision was distinguished because this matter involved an actual sale attracting the disclosure regime. The penalty under Section 15A(b) was therefore upheld, and the challenge failed.

---

---

Issues: Whether penalty under Section 15A(b) of the Securities and Exchange Board of India Act, 1992 was justified for failure to disclose sale of shares under Regulation 7(1A) read with Regulation 7(2) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, where the transaction was stated to be within the promoter group and disclosures were made under other regulatory provisions.

Analysis: The disclosure requirement under Regulation 7(1A) read with Regulation 7(2) applied to both purchase and sale transactions, including transactions within the promoter group. Disclosure by the purchaser did not remove the independent obligation cast on the seller to make a separate disclosure. Likewise, disclosure under Regulation 13(3) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 did not discharge the obligation under the takeover regulations. The cited decision concerning bonus shares was distinguished because the present case involved an actual sale of shares attracting the disclosure regime.

Conclusion: The penalty was upheld and the challenge to the orders failed.

---