The Supreme Court held that the 2001 SEBI Circular required...

The Supreme Court held that the 2001 SEBI Circular required disclosure of positions breaching prescribed limits and created no per se prohibition on excess positions; however, the appellant's failure to disclose agency-based trades with twelve entities attracted penalty under the Circular. The futures positions were accepted as valid hedges against intended cash-market sales, because anticipatory hedging was permissible and no 2007 rule required a perfect one-to-one correlation or formal hedging policy. Concentration of open interest, viewed on the correct combined-position basis, did not by itself prove manipulative cornering, and the alleged last-minute cash sale was not shown by cogent material to be price manipulation. Accordingly, PFUTP fraud and disgorgement were set aside, while the disclosure penalty was sustained.