Disgorgement as civil regulatory relief was upheld, with investors covered and interest limited to the post-order period.

Disgorgement under securities law was treated as a civil, regulatory remedy to strip unlawful gains, so earlier restraint proceedings did not trigger double jeopardy. The expression "persons associated with the securities market" was construed broadly enough to include investors who buy or sell securities, and disgorgement proceedings were not invalidated by delay in the absence of a statutory limitation period. Interest on the disgorged amount, however, could run only from the date the liability crystallised under the disgorgement order, not from the original allotment date. The liability to disgorge and the finding on unlawful gain were maintained, with only the commencement date for interest modified.

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Issues: (i) Whether disgorgement could be directed after earlier restraint proceedings without attracting the bar of double jeopardy; (ii) whether an investor falls within the expression "persons associated with the securities market" for the purpose of directions under section 11B; (iii) whether the disgorgement proceedings were vitiated by inordinate delay; and (iv) whether interest on the disgorgement amount could run from the date of the original allotment.

Issue (i): Whether disgorgement could be directed after earlier restraint proceedings without attracting the bar of double jeopardy.

Analysis: The proceedings for disgorgement were civil and regulatory in character, not criminal. The earlier restraint under section 11B and the later disgorgement order served different purposes. Disgorgement is a monetary equitable remedy intended to strip unlawful gains and is not a punishment. The statutory scheme also contemplates separate regulatory measures, adjudication, and prosecution for distinct consequences of the same misconduct.

Conclusion: The bar of double jeopardy did not apply, and the challenge failed.

Issue (ii): Whether an investor falls within the expression "persons associated with the securities market" for the purpose of directions under section 11B.

Analysis: The expression "persons associated with the securities market" was construed broadly. It was held that the term is not confined to intermediaries or registered market participants and extends to persons who buy or sell securities and transact in the market as investors.

Conclusion: An investor is covered by the expression, and the challenge on this ground failed.

Issue (iii): Whether the disgorgement proceedings were vitiated by inordinate delay.

Analysis: Delay was not treated as fatal in the facts of the case. Disgorgement could arise only after a definitive finding of violation and illegal gain. The absence of a fixed statutory limitation period meant that delay had to be judged on the facts, and the seriousness of the market misconduct justified the proceedings.

Conclusion: The proceedings were not barred or invalidated by delay.

Issue (iv): Whether interest on the disgorgement amount could run from the date of the original allotment.

Analysis: Interest could not be charged from the date of allotment because the liability to disgorge crystallised only when the disgorgement order was passed. The amount became payable after the order and expiry of the time granted for compliance.

Conclusion: The interest component was wrongly computed for the earlier period and required modification in favour of the appellants.

Final Conclusion: The appeal succeeded only to the limited extent of modifying the commencement date for interest on the disgorgement amount, while the findings on liability to disgorge and the amount of unlawful gain were maintained.

Ratio Decidendi: Disgorgement is a civil equitable remedy to deprive a wrongdoer of unlawful gains, can follow regulatory findings of violation, is not barred by double jeopardy, and interest on such liability runs only from the date the amount becomes payable after the disgorgement order.

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