2024 (9) TMI 845 - SCH - SEBI

Offence u/s 205(1A) and 205A of Companies Act - criminal proceedings under Section 482 of Cr.P.C - accused company declared a dividend of but failed to deposit the amount in a separate bank account within five days and did not disburse it to the shareholders within thirty days - respondent-M/S. Securities and Exchange Board of India (SEBI) admits that the amount has actually been paid. He, however, submits that under the statutory provisions, the appellants do not have an escape and therefore, the High Court 2022 (5) TMI 1652 - KARNATAKA HIGH COURT has rightly declined to quash the proceedings. HELD THAT - Considering the facts and circumstances of the case, we feel that interest of justice would be best served if the appellants are put to terms for the violation committed by them instead of allowing the trial to proceed. We, accordingly, impose a fine of Rs. 25,00,000/- (Rupees Twenty Five Lakhs) to be paid by the appellants which shall be deposited in Account No. 90552010165915 of the Armed Forces Battle Casualties Welfare Fund, Canara Bank, Branch South Block, Defence Headquarters, within eight weeks from today. This order is being passed in the peculiar facts and circumstances of the case and would not be treated as a precedent. If the appellants, after depositing the said amount in the aforesaid fund file proof of deposit with the Registry of this Court within ten weeks from today,the criminal proceedings initiated by the respondent-SEBI would stand closed.The appeals stand allowed to the above extent.

Summary

The Supreme Court granted leave and imposed a fine of Rs. 25,00,000 on the appellants for violating statutory provisions. The fine is to be deposited in the Armed Forces Battle Casualties Welfare Fund within eight weeks. If the amount is deposited and proof is filed within ten weeks, the criminal proceedings by SEBI will be closed. Failure to do so will result in automatic dismissal of the appeals.