Section 19FA in The Depositories Act, 1996
Title: Penalty for conduct business in a fair manner
1[19FA. Penalty for failure to conduct business in a fair manner.--Where a depository fails to conduct its business with its participants or any issuer or its agent or any person associated with the securities markets in a fair manner in accordance with the rules, regulations made by the Board or directions issued by the Board under this Act, it shall be liable to penalty which shall not be less than five crore rupees but which may extend to twenty-five crore rupees or three times the amount of gains made out of such failure, whichever is higher.]
1. Ins. by Act 13 of 2018, s. 194 (w.e.f. 8-3-2019).
Title: Penalty for contravention where no separate penalty has been provided
Whoever fails to comply with any provision of this Act, the rules or the regulations or bye-laws made or directions issued by the Board thereunder for which no separate penalty has been provided, shall be 1[liable to a penalty which shall not be less than one lakh rupees but which may extend to one crore rupees].
1. Subs. by Act 27 of 2014, s. 48, for certain words (w.e.f. 28-3-2014).
Title: Power to adjudicate
(1) For the purpose of adjudging under sections 19A, 19B, 19C, 19D, 19E, 1[19F, 19FA and 19G, the Board may appoint any officer not below the rank of a Division Chief of the Securities and Exchange Board of India to be an adjudicating officer for holding an inquiry in the prescribed manner after giving any person concerned a reasonable opportunity of being heard for the purpose of imposing any penalty.
(2) While holding an inquiry, the adjudicating officer shall have power to summon and enforce the attendance of any person acquainted with the facts and circumstances of the case to give evidence or to produce any document, which in the opinion of the adjudicating officer, may be useful for or relevant to the subject-matter of the inquiry and if, on such inquiry, he is satisfied that the person has failed to comply with the provisions of any of the sections specified in sub-section (1), he may impose such penalty as he thinks fit in accordance with the provisions of any of those sections.
2[(3) The Board may call for and examine the record of any proceedings under this section and if it considers that the order passed by the adjudicating officer is erroneous to the extent it is not in the interests of the securities market, it may, after making or causing to be made such inquiry as it deems necessary, pass an order enhancing the quantum of penalty, if the circumstances of the case so justify:
Provided that no such order shall be passed unless the person concerned has been given an opportunity of being heard in the matter:
Provided further that nothing contained in this sub-section shall be applicable after an expiry of a period of three months from the date of the order passed by the adjudicating officer or disposal of the appeal under section 23A, whichever is earlier.]
1. Subs. by Act 13 of 2018, s. 195, for "19F and 19G, the Board shall" (w.e.f. 8-3-2019).
2. Ins. by Act 27 of 2014, s. 49 (w.e.f. 18-7-2013).
Title: Factors to be taken into account by adjudicating officer
19-I. 1[Factors to be taken into account while adjudging quantum of penalty].--While adjudging adjudging the quantum of penalty under 2[section 19 or section 19H, the Board or the adjudicating officer] shall have due regard to the following factors, namely:--
(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default;
(b) the amount of loss caused to an investor or group of investors as a result of the default;
(c) the repetitive nature of the default.
3 [Explanation.--For the removal of doubts, it is clarified that the power of 4*** to adjudge the quantum of penalty under sections 19A to 19F shall be and shall always be deemed to have been exercised under the provisions of this section.]
1. Subs. by Act 13 of 2018, s. 196, for "Factors to be taken into account by adjudicating officer" (w.e.f. 8-3-2019).
2. Subs. by s. 196, ibid., for "section 19H, the adjudicating officer" (w.e.f. 8-3-2019).
3. Ins. by Act 7 of 2017, s. 149 (31-3-2017).
4 The words "of an adjudicating officer" omitted by Act 13 of 2018, s. 196 (w.e.f. 8-3-2019).
Title: Settlement of Administrative and Civil Proceedings
1[19-IA. Settlement of Administrative and Civil Proceedings.--(1) Notwithstanding anything contained in any other law for the time being in force, any person, against whom any proceedings have been initiated or may be initiated under section 19 or section 19H, as the case may be, may file an application in writing to the Board proposing for settlement of the proceedings initiated or to be initiated for the alleged defaults.
(2) The Board may, after taking into consideration the nature, gravity and impact of defaults, agree to the proposal for settlement, on payment of such sum by the defaulter or on such other terms as may be determined by the Board in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992).
(3) For the purpose of settlement under this section, the procedure as specified by the Board under the Securities and Exchange Board of India Act, 1992 (15 of 1992) shall apply.
(4) No appeal shall lie under section 23A against any order passed by the Board or the adjudicating officer under this section.]
2[(5) All settlement amounts, excluding the disgorgement amount and legal costs, realised under this Act shall be credited to the Consolidated Fund of India.
1. Ins. by Act 27 of 2014, s. 50 (w.e.f. 20-4-2007).
2. Ins. by Act 13 of 2018, s. 197 (w.e.f. 8-3-2019).