SEBI Act Offences – Hear First, Cognizance Later
Judgment dated 15.7.2026 of the High Court of Bombay in Criminal Writ Petition No.5242 of 2025 of Neville Tuli Vs. Securities and Exchange Board of India and another
SEBI Act Offences – Hear First, Cognizance Later
Right of Hearing Before Cognizance of SEBI Offences
Bombay HC – SEBI Special Court Must Hear the Accused before taking cognizance for the offences under the SEBI Act – First Proviso to Section 223 of BNSS is applicable and mandatory
SEBI offences – Right to Hear prior to Cognizance- Section 223 BNSS
The petitioner – accused no.1 was the Director of Osian which has floated the Osian’s Art Fund.
On 15.4.2013, the SEbI passed an order that the OAF was the collective investment scheme and it was operated without registration violating Section 12(1-B) of the SEBI Act, 1992 read with Regulation 3 of the SEBI (Collective Investment Schemes) Regulations 1999 (CIS Regulation 1999)
Thereafter, the order under sections 11, 11B, 19 of the SEBI Act and regulation 65 of the CIS Regulations, 1999 was passed for refund of money to the investors and 10% interest. The said order was confirmed upto the Supreme Court.
Complaint for the offence under Section 24(2) of the SEBI Act was filed before the Special Court, Mumbai.
The Special Order has taken the cognizance and issued the process without giving hearing as required by the first proviso to section 223(1) of the BNSS, 2023..
The Special Court cannot take cognizance of the offences punishable under the SEBI Act, 1992, without compliance of the peremptory requirement of providing an opportunity of hearing to the accused, as provided under the first proviso to Section 223(1) of the BNSS, 2023.
