SEBI v. Shriram Mutual Fund
(2006) 5 SCC 361 · Supreme Court of India
Post-Harshad Mehta market regulation treats penalty as a statutory civil consequence so that systemic breaches cannot hide behind lack of mens rea.
Unit IV · Law of Investments and Securities
Fraudulent and unfair trade practices; Harshad Mehta-era lessons
Study aid only. Confirm statute numbers with the current bare Act and the official OU LL.B. (3-YDC) 2024–25 syllabus PDF.
Harshad Mehta-era bank-receipt and ready-forward abuses showed why SCRA, SEBI and civil-penalty powers had to be read strictly. Use SEBI v. Shriram Mutual Fund to explain why penalty without mens rea was accepted as a deterrent model after those scandals.
Statute sections
| Act / instrument | Section | Name |
|---|---|---|
| Securities and Exchange Board of India Act, 1992 | 12A | Prohibition of manipulative devices |
| Securities and Exchange Board of India Act, 1992 | 15HA | Penalty for fraudulent and unfair trade practices |
| SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 | 3–4 | Prohibition of fraud and market manipulation |
Landmark cases
N. Narayanan v. SEBI
(2013) 12 SCC 152 · Supreme Court of India
SEBI's duty is not only to punish but to restore integrity of price discovery.