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

Meera's fraudulent trading in a scrip yielded a profit of Rs 2 crore. Under Section 15HA, what is the maximum penalty that may extend in her case?

The maximum penalty is Rs 25 crore. Section 15HA permits a penalty up to 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 Rs 25 crore figure is the higher and applies.

  1. ARs 6 crore, being three times the profit
  2. BRs 2 crore, being the profit made
  3. CRs 25 crore, being the fixed amount, since it is higher than three times the profitCorrect
  4. DRs 27 crore, being the fixed amount plus the profit

Explanation

Three times Rs 2 crore is Rs 6 crore, which is less than Rs 25 crore. The section takes whichever is higher, so the ceiling is Rs 25 crore. Rs 6 crore would be correct only if the profit multiple were the higher figure.

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