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CS Executive · Capital Market and Securities Laws · Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market

Meera made profits of Rs 2 crore from practices held fraudulent and unfair under the securities laws. Which statement about the maximum penalty under Section 15HA of the SEBI Act, 1992 is correct?

The maximum penalty is Rs 25 crore. Section 15HA sets the ceiling at twenty-five crore rupees or three times the profits, whichever is higher. Three times Rs 2 crore is only Rs 6 crore, so the fixed twenty-five crore figure is higher and applies.

  1. AIt is Rs 6 crore, being three times the profit
  2. BIt is Rs 25 crore, being higher than three times the profitCorrect
  3. CIt is Rs 2 crore, being equal to the profit
  4. DIt is Rs 27 crore, being the sum of both limits

Explanation

Three times Rs 2 crore is Rs 6 crore. The Act uses whichever is higher of Rs 25 crore and Rs 6 crore, so the ceiling is Rs 25 crore. Rs 6 crore ignores the fixed limit, and adding the limits is not what the section provides.

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