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Issues involved: IPO scam, Securities and Exchange Board of India Act, 1992, unlawful conduct, disgorgement of illegal gains, equitable remedy.
Summary: The judgment pertains to an appeal filed by an individual involved in an IPO scam discovered by the Securities and Exchange Board of India. The appellant was restrained from dealing in securities for two years and directed to disgorge unlawful gains of Rs. 72 lacs. The appellant claimed to be a financier who borrowed funds and financed IPO applicants without proper documentation. The whole time member found that the appellant and a finance company unlawfully enriched themselves by cornering shares meant for retail investors. The appellant was required to disgorge Rs. 72 lacs, representing the illegal gains made. Disgorgement is an equitable remedy to prevent wrongdoers from unjust enrichment due to illegal conduct. The judgment upheld the order for disgorgement as fair and reasonable under the circumstances. The appeal was heard along with other appeals and the request to withdraw the appeal was declined. The appeal was dismissed, and the respondent Board was awarded costs of Rs. 1 lac due to the fraudulent conduct of the appellant and the finance company.
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