Reasonable-time enforcement in securities law can defeat stale penalty proceedings where delay is inordinate and unexplained.

Securities-law proceedings were found unsustainable where adjudication was initiated and concluded after an inordinate, unexplained delay, even though no express limitation period was prescribed. The text states that enforcement powers must still be exercised within a reasonable time, and that prolonged delay can prejudice the validity of a show cause notice and penalty orders. It further notes that disclosure under the takeover regulations was treated as adequate market information, while the alleged insider-trading non-compliance was considered technical rather than substantive. On those facts, the notice and penalty orders were quashed.

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Issues: Whether the show cause notice and penalty orders could be sustained despite inordinate delay in initiating and concluding adjudication proceedings for the alleged disclosure and listing violations.

Analysis: The alleged defaults related to transactions of 2010, whereas the show cause notice was issued only in 2018. The statutory framework did not prescribe a limitation period, but powers under the securities laws had to be exercised within a reasonable time. The disclosure made under the takeover regulations was treated as sufficient market information, and the alleged non-compliance under the insider trading regulations was viewed as technical in nature. In these circumstances, the prolonged and unexplained delay prejudiced the sustainability of the proceedings.

Conclusion: The proceedings were held unsustainable for want of action within a reasonable period, and the show cause notice as well as the penalty orders were quashed in favour of the appellants.

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