[Analysis] Key Companies Act and Securities Law Rulings of 2025 | Top 20 Case Laws

In 2025, courts and tribunals delivered several landmark rulings that refined the interpretation of the Companies Act, 2013 and India’s securities law framework. These decisions clarified key principles on SEBI’s regulatory powers, corporate governance and procedural fairness, shareholder rights, capital reduction, schemes of arrangement, enforcement timelines, and the treatment of economic offences. This curated list of the Top 20 Rulings of 2025 under the Companies Act & Securities Law captures the most influential judgments and their practical takeaways for companies, regulators, and legal practitioners navigating an evolving compliance and litigation landscape.

Table of Contents

Introduction

1. Minority Shareholders Have No Vested Right to Remain Shareholders During a Capital Reduction: NCLAT
2. SC Sets Aside SEBI’s Penalty Order on Mukesh Ambani Over Lack of Proof Tying Him to RPL Trade Violations Under PFUTP Norms
3. WhatsApp Communications Are Insufficient for Validity of Convening of Meetings Under Companies Act
4. Accused Evading Summons or Warrants in Serious Economic or Heinous Offences Shouldn’t Be Granted Anticipatory Bail: SC
5. NCLT Lacks Jurisdiction to Void Gift-Based Share Transfer Since Validity of Gift Deed Needs Substantial Evidence: NCLAT
6. MCA Circular No. 13/2019 Doesn’t Extend Time for Filing Financial Statements Beyond 30 Days From AGM: HC
7. HC Refuses to Disclose Nature of SEBI Investigations as It Is Exempted Under Section 8(1)(h) of RTI Act
8. Company Court Cannot Sit as an Appellate Authority Over a Scheme of Amalgamation Placed Before It: HC
9. Limitation Act Applies to Arbitration Proceedings Under MSMED Act and Not to Conciliation Proceedings: SC
10. Mere Settlement of Creditors or Workers Insufficient for Staying Winding Up Proceedings Under Section 466
11. Stamp Duty on a Scheme of Arrangement Under the Maharashtra Stamp Act Is Based on Share Value and Consideration, Not Net Worth
12. SEBI’s Order Directing Company and Directors to Disgorge Unlawful Gains Set Aside as It Was Issued Four Years Later Without Reasonable Cause: SC
13. Interest on Penalties Imposed by SEBI Is Payable From Date of Adjudication Orders and Not From Demand Notice: SC
14. HC Refuses to Quash Criminal Proceedings as Consent Order and Payment Made by Petitioner Didn’t Affect Prosecution
15. Limitation Act Applies to Arbitration Proceedings Under MSMED Act and Not to Conciliation Proceedings: SC
16. SC Approves Relief to Depositors of Sahara Co-Operative Societies by Releasing ₹5,000 Crore From Refund Account
17. Lone Homebuyer Cannot Challenge Voting by Authorised Representatives of Majority Financial Creditors: NCLAT
18. ROC’s Order Extending AGM Can’t Be Challenged as Companies Act Doesn’t Mandate Shareholders’ Hearing Before Considering Extension: HC
19. Stipulation Referred to in NSE Circular Dated 02-09-2022 With Respect to Penalty Refund for Margin Shortfall Without SEBI’s Approval Was to Be Quashed: HC
20. SC Holds Will Invalid as Appellant Failed to Prove That Testator Executed It With Sound Mind and Without Any Instigation

Introduction

In the year 2025, several judicial pronouncements significantly shaped the outlines of corporate and securities law in India. Courts and tribunals across levels clarified critical principles relating to regulatory powers, shareholder rights, corporate governance and procedural fairness. Collectively, they provide valuable guidance for companies, regulators, and legal practitioners navigating the evolving corporate law landscape.

1. Minority Shareholders Have No Vested Right to Remain Shareholders During a Capital Reduction: NCLAT

Shirish Vinod Shah (HUF) vs. Bharti Telecom Ltd. [2025] 175 taxmann.com 315 (NCLAT-New Delhi) [03-04-2025]

In the instant case, the NCLAT held that selective reduction of share capital, where only minority shareholders are bought out, is entirely permissible under Section 66(1)(b)(ii) of the Companies Act, 2013.

Since Bharti Telecom Ltd. (BTL) followed all legal procedures, passed a special resolution with 99.90% approval, obtained no-objection certificates from all creditors, and complied with statutory requirements, the Tribunal found the capital reduction valid. The Court emphasised that capital reduction is a commercial decision of shareholders, and courts can interfere only if the scheme is unfair, illegal, or unconscionable.

The Appellate Tribunal ruled that minority shareholders do not have a vested right to remain shareholders when majority shareholders approve a valid reduction of capital. Their removal through a special resolution is lawful.  A fairness opinion supported the valuation, and there was no evidence of bias. Differences in valuation methods or earlier valuations do not justify interference unless the valuation is grossly unfair, which was not the case.

2. SC Sets Aside SEBI’s Penalty Order on Mukesh Ambani Over Lack of Proof Tying Him to RPL Trade Violations Under PFUTP Norms

Securities and Exchange Board of India vs. Mukesh D. Ambani Etc. [2024] 169 taxmann.com 285 (SC) [11-11-2024]

The case concerns SEBI’s allegation that Reliance Industries Ltd. (RIL) carried out a fraudulent trading scheme in 2007 involving the sale of shares of Reliance Petroleum Ltd. (RPL) in both the cash and the futures & options segments. SEBI claimed that this scheme was executed through authorized agents and was intended to earn undue profits, thereby violating Regulations 3 and 4 of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003.

Since Mukesh Ambani was the Managing Director and allegedly responsible for the overall operations of RIL, SEBI sought to impose liability on him under Section 27 of the SEBI Act, issuing a show-cause notice almost 10 years after the trades.

When the matter reached the Securities Appellate Tribunal (SAT), the Tribunal found that RIL’s Board had specifically authorized two directors, not Mukesh Ambani, to explore and implement funding options, including the sale of RPL shares. The Board authorization did not require these officers to seek further instructions, and there was no documentary evidence or investigative finding showing that Mukesh Ambani was aware of the specific trades executed or that he participated in their execution.

SAT held that the allegation of his complicity was based on conjecture, not proof. The Tribunal also noted the significant delay of a decade before SEBI issued the show-cause notice and clarified that, before the 2019 amendment, Section 27 did not impose vicarious civil liability on company officers for regulatory violations.

The Supreme Court examined SEBI’s appeal but found no substantial question of law that required its intervention under Section 15Z of the SEBI Act. Since SAT’s findings were based on clear factual analysis, particularly the absence of evidence against Mukesh Ambani and the inapplicability of Section 27 to civil penalties before 2019, the Supreme Court upheld the SAT decision. As a result, SEBI’s penalty order against Mukesh Ambani was quashed, and the Supreme Court dismissed SEBI’s appeals.

3. WhatsApp Communications Are Insufficient for Validity of Convening of Meetings Under Companies Act

Mr. T.P. Anilkumar v. Indus Motor Company Pvt. Ltd. [2025] 181 taxmann.com 825 (NCLT-Kochi Bench)

In Mr. T.P. Anilkumar v. Indus Motor Company Pvt. Ltd., the NCLT was dealing with repeated allegations that board and general meetings were held without proper notice to minority directors and shareholders. One of the key factual issues was that communications were largely exchanged through WhatsApp, and the respondents treated this as sufficient compliance.

The Tribunal was clear that statutory notices under the Companies Act, 2013 cannot be diluted by convenience. For Board Meetings under section 173 read with SS-1, and General Meetings under section 101 read with SS-2, the law recognises only prescribed and verifiable modes of service. These include hand delivery, registered or speed post, courier, and electronic mode in the form of email, where proof of dispatch and delivery can be reasonably established. WhatsApp messages, even if actually received, were treated as informal communications and not “notice” in the statutory sense.

What weighed with the Bench was not just the medium, but the absence of procedural certainty. WhatsApp does not ensure reliable proof of service, does not comply with the Secretarial Standards framework, and cannot substitute a formal notice required for valid corporate decision-making. On that basis, the Tribunal accepted the grievance that meetings convened or actions taken without proper statutory notice were legally vulnerable, particularly in an oppression and mismanagement context.

So the ratio that emerges is quite practical. WhatsApp may be useful for internal coordination or follow-ups, but it cannot be the sole mode for convening Board or General Meetings if a company wants its actions to withstand legal scrutiny. Where statutory compliance is involved, especially in contested situations, strict adherence to the Act and Secretarial Standards is non-negotiable.

4. Accused Evading Summons or Warrants in Serious Economic or Heinous Offences Shouldn’t Be Granted Anticipatory Bail: SC

Serious Fraud Investigation Office vs. Aditya Sarda [2025] 173 taxmann.com 381 [09-04-2025]

In the instant case of Serious Fraud Investigation Office vs. Aditya Sarda (2025), the Supreme Court delivered a critical ruling concerning the grant of anticipatory bail in serious economic offences. The central finding was that accused persons who actively evade the legal process, such as summons and warrants, in grave offences like those investigated by the SFIO, should not be granted pre-arrest protection.

The Court observed that the respondents had repeatedly concealed themselves, ignored bailable and non-bailable warrants, and forced the Special Court to initiate proclamation proceedings to declare them absconders (Section 82 CrPC), effectively obstructing justice. This deliberate non-cooperation was deemed a fatal flaw in their plea for anticipatory bail.

The judgment strongly emphasised the inherent seriousness of economic offences. These crimes involve complex conspiracies, large-scale financial fraud, and profound damage to the nation’s financial health, necessitating a stricter approach compared to ordinary criminal cases.

The Court established a clear legal principle: when an accused’s conduct shows a design to obstruct the execution of warrants or abscond, they are disentitled to the extraordinary remedy of anticipatory bail. Their evasive actions directly contradicted their claims of good faith and knowledge of the proceedings, making their assertion of ignorance demonstrably false.

Furthermore, the Supreme Court found the High Court’s decision to grant anticipatory bail legally untenable and “perverse.” The High Court had erroneously ignored the accused’s highly problematic conduct, overlooked the ongoing warrant and proclamation proceedings, and crucially, failed to consider the mandatory twin conditions stipulated under Section 212(6) of the Companies Act, which govern bail in SFIO cases. By failing to apply these stringent statutory requirements, the High Court’s order became legally unsustainable and contrary to established judicial precedent regarding serious offences.

Consequently, the Supreme Court set aside the High Court’s anticipatory bail orders. It directed the accused to surrender before the Special Court within one week. While denying them the relief of pre-arrest bail, the Court left it open for them to file a regular bail application after surrender. This application, however, must be decided strictly on its merits by the Special Court, mandating a rigorous application of the law, including the necessary twin conditions, thereby ensuring a fair but strict judicial process.

5. NCLT Lacks Jurisdiction to Void Gift-Based Share Transfer Since Validity of Gift Deed Needs Substantial Evidence: NCLAT

Mrs. Shailja Krishna vs. Satori Global Ltd. [2025] 178 taxmann.com 70 (SC) [02-09-2025]

In the instant case, Mrs Shailja Krishna and her husband were the original promoters of Satori Global Ltd., and over time, Mrs Krishna came to hold about 98% of the company’s shares. In December 2010, when her marital relationship had deteriorated, it was shown that she had executed a gift deed transferring her entire shareholding to her mother-in-law. Around the same period, certain board meetings were allegedly held without her knowledge, in which her resignation as a director was accepted, and new directors were appointed. Mrs Krishna later alleged that she had been coerced into signing blank documents and subsequently discovered that her name had been removed from the list of shareholders, prompting her to file a petition before the NCLT alleging oppression and mismanagement.

The NCLT examined the gift deed, share transfer forms, and the conduct of the board meetings. It found that the documents showed signs of manipulation, that the share transfer was in violation of the Articles of Association, and that the board meetings were conducted without proper notice and quorum. On these findings, the NCLT declared the gift deed and share transfer invalid, restored Mrs Krishna as a shareholder and director, and set aside the impugned board resolutions.

On appeal, the NCLAT reversed the NCLT’s decision, holding that the NCLT lacked jurisdiction to examine allegations of fraud or to decide the validity of the gift deed, as such issues, according to it, fell within the domain of a civil court. The Supreme Court, however, disagreed with this view. It held that in a petition alleging oppression and mismanagement, the NCLT has wide jurisdiction to decide all issues that are integral to the dispute, unless expressly barred by law. Since the core issue was whether Mrs Krishna’s shareholding had been unlawfully divested through a questionable gift deed, the NCLT was competent to examine its validity, including allegations of fraud or coercion.

On merits, the Supreme Court upheld the NCLT’s findings. It noted that the share transfer was contrary to the Articles of Association, the transfer documents contained overwriting and inconsistencies, and the surrounding circumstances did not support the claim of a voluntary gift made out of love and affection. The Court also held that the board meetings held in December 2010 were illegal due to a lack of mandatory notice and quorum. These acts collectively amounted to oppression and mismanagement. Accordingly, the Supreme Court set aside the NCLAT’s order and restored the NCLT’s decision, reinstating Mrs Shailja Krishna as a shareholder and director of the company.

6. MCA Circular No. 13/2019 Doesn’t Extend Time for Filing Financial Statements Beyond 30 Days From AGM: HC

Ramakant and Co. (P.) Ltd. vs. Union of India [2025] 171 taxmann.com 524 (Delhi) [27-01-2025]

The High Court of Delhi held that the statutory timelines under the Companies Act for holding the Annual General Meeting (AGM) and filing financial statements are strict and cannot be altered by administrative circulars. Companies are mandatorily required to hold their AGM by 30 September (extendable to 31 December only if the ROC grants approval). Once the AGM is held, section 137 requires financial statements to be filed within 30 days, without exception.

The Court clarified that the Ministry of Corporate Affairs’ Circular No. 13/2019, dated 29-10-2019, did not extend the 30-day statutory period for filing financial statements. The circular merely provided a temporary waiver of additional fees up to 30-11-2019 for companies that had genuine delays, such as those whose AGM had been validly extended by the ROC. It could not be interpreted to override or amend the statutory requirements of section 97 (AGM timing) or section 137 (30-day filing timeline).

Section 403 further reinforces the mandatory nature of these timelines by stipulating that if statutory filings are not made on time, they may still be accepted, but only with a compulsory additional fee of at least Rs. 100 per day. The section does not grant any discretion to the authorities to relax, waive, or extend these statutory deadlines. Therefore, once the petitioners conducted their AGM on 30-09-2019, they were bound to file their financial statements by 29-10-2019.

7. HC Refuses to Disclose Nature of SEBI Investigations as It Is Exempted Under Section 8(1)(h) of RTI Act

Srishti Rustagi vs. Securities and Exchange Board of India [2025] 178 taxmann.com 484 (Delhi) [18-09-2025]

In the instant case, the appellant filed a complaint with SEBI alleging that a significant portion of shares in an Offer for Sale (OFS) of a company was allocated to related parties. SEBI responded that 97% of the OFS was allocated to domestic mutual funds, which did not support the appellant’s allegations, and the insider trading aspect was forwarded to the relevant division for necessary action. Subsequently, the appellant filed an RTI application seeking information about the status and details of SEBI’s investigation. The CPIO informed that complaint information is treated as market intelligence, regulatory actions, if any, are published on SEBI’s website, and details of internal investigations are confidential.

On appeal, the First Appellate Authority and the Central Information Commissioner held that the status of complaints could be accessed via SEBI’s SCORES portal, but disclosure of investigation details was exempt under Section 8(1)(h) of the RTI Act, as confidentiality is essential to avoid market speculation, preserve evidence, and protect third-party interests. The Single Judge dismissed the writ petition, holding that the appellant had received information on the complaint’s status while the internal investigation details were rightly withheld.

The High Court upheld the lower authorities’ decisions. It held that the status of the complaint was properly provided and accessible on the SCORES portal. However, details regarding SEBI’s internal investigation remain exempt under Section 8(1)(h) of the RTI Act, since their disclosure could impede investigations, affect evidence collection, and harm third parties. Accordingly, the appeal was dismissed.

8. Company Court Cannot Sit as an Appellate Authority Over a Scheme of Amalgamation Placed Before It: HC

Buragohain Tea Company Ltd. vs. Union of India [2025] 180 taxmann.com 50 (Gauhati) [29-10-2025]

In the instant case, the appellant, Buragohain Tea Company Ltd. (transferor company), along with the transferee company, approached the Company Court seeking sanction for a scheme of amalgamation already approved by their respective shareholders. A minority shareholder (objector) challenged the scheme, alleging she was deprived of her right to receive notice of the shareholders’ meeting and that the proposed share exchange ratio was prejudicial to the transferee company. The Company Judge observed that the exchange ratio appeared heavily loaded in favor of the transferor company, and while accepting the scheme in principle, directed the Registrar of Companies to examine the bona fide of the ratio.

The objector appealed against the penultimate directions of the Company Judge, contending that if the share exchange ratio was improper, the scheme should have been rejected outright instead of being referred for re-evaluation. The companies argued that the scheme reflected the commercial wisdom of shareholders and financial advisors and that proper notice had been served to the objector as per statutory procedure.

The Court noted that the Company Court does not act as an appellate authority over shareholder-approved schemes and cannot substitute its own conclusions for those of the shareholders, though it retains the power to refuse sanction if the scheme is illegal, fraudulent, or against public policy.

The Gauhati High Court held that the directions issued by the Company Judge were within jurisdiction and not perverse. Since the appeals pertained to an interim order, the matter was remitted back to the Company Judge to conclude proceedings without being influenced by previous directions. The Company Judge was permitted to re-evaluate the share exchange ratio and pass appropriate orders on sanctioning the scheme, with liberty to call for relevant records, ensuring the process reflects the bona fide commercial interests of shareholders.

9. Limitation Act Applies to Arbitration Proceedings Under MSMED Act and Not to Conciliation Proceedings: SC

Sonali Power Equipments (P.) Ltd. vs. Chairman, Maharashtra State Electricity Board [2025] 176 taxmann.com 662 (SC) [17-07-2025]

In the instant case, the appellants, small-scale industries, supplied transformers to the Maharashtra State Electricity Board between 1993 and 2004. Due to delayed payments, they approached the Industry Facilitation Council under the predecessor legislation to the MSMED Act (later replaced by the MSMED Act, 2006).

The Council awarded interest on the delayed payments in 2010. The respondents challenged the award under Section 34 of the Arbitration and Conciliation Act (ACA), claiming the claims were time-barred. The Commercial Court set aside the award on limitation grounds, and the High Court referred the question of whether limitation applies to MSMED proceedings to a larger bench due to conflicting precedents.

The High Court held that “amount due” under the MSMED Act does not include time-barred debts. While conciliation under Section 18(2) does not create any special rights for the supplier, it allows the buyer to raise limitation as a defence, meaning stale claims cannot be enforced in conciliation if they violate public policy. For arbitration under Section 18(3), the ACA applies, including Section 43, which makes the Limitation Act applicable. The Court emphasized that statutory arbitration under the MSMED Act is governed by the special provisions of the Act, which override general provisions of the ACA.

The Supreme Court clarified that the Limitation Act does not apply to conciliation proceedings under Section 18(2) of the MSMED Act, and suppliers can settle time-barred claims through a conciliation-mediated contract. However, the Limitation Act applies to arbitration under Section 18(3), as such arbitrations are treated as arising from an arbitration agreement under the ACA. The Court confirmed that the applicability of the ACA is determined by the MSMED Act’s special provisions, not by Section 2(4) of the ACA. Additionally, any extension of limitation based on disclosure under Section 22 of the MSMED Act must be examined on a case-to-case basis.

10. Mere Settlement of Creditors or Workers Insufficient for Staying Winding Up Proceedings Under Section 466

Bipin J. Bagadia vs. Grand View Estates (P.) Ltd. [2025] 170 taxmann.com 850 (Bombay) [22-01-2025]

In the instant case, the company was declared a sick industrial company by the BIFR, which recommended its winding up. Acting on this recommendation, the High Court ordered the winding up of the company and appointed a provisional liquidator as the Official Liquidator. The respondents, who held 52% of the company’s shareholding, had earlier sought a stay of the winding-up proceedings, but their attempts were unsuccessful at all levels, including before the Supreme Court.

After a lapse of four years, the respondents entered into settlements with certain former workers and thereafter filed an interim application under Section 466 of the Companies Act seeking a stay of the winding-up proceedings. The Company Court allowed the application and granted a stay.

On appeal, the Bombay High Court held that a mere settlement with creditors or workers does not, by itself, justify a stay of winding-up proceedings. The Court observed that the impugned order failed to consider essential factors such as public interest, commercial morality, the bona fides and feasibility of reviving the company, and binding precedents laid down in earlier orders of the Company Court, the Appellate Court, and the Supreme Court. The Court further held that there was no material change in circumstances warranting the exercise of discretion under Section 466 and that such discretion had been exercised without proper reasoning.

Accordingly, the High Court quashed the impugned order, vacated the stay of winding-up proceedings, and directed the Official Liquidator to retake possession and control of the company’s assets. It was further clarified that the respondents were restrained from dealing with or disposing of the company’s properties without prior permission of the Court.

11. Stamp Duty on a Scheme of Arrangement Under the Maharashtra Stamp Act Is Based on Share Value and Consideration, Not Net Worth

Bharti Airtel Ltd. vs. Chief Controlling Revenue Authority [2025] 174 taxmann.com 476 (Bombay) [09-05-2025]

The case concerned a demerger where Bharti Airtel received TTML’s consumer mobile business, and Airtel allotted its own shares to TTML’s shareholders as consideration. Under Article 25(da) of the Maharashtra Stamp Act, stamp duty on a scheme of arrangement must be calculated only on the market value of shares issued/allotted in exchange plus any additional consideration actually paid, and not on the “net worth” or “enterprise value” of the business being transferred.

The Collector of Stamps wrongly computed the duty on TTML’s business “net worth” of ₹1055.70 crore and demanded ₹7.39 crore as stamp duty. However, the actual consideration under the scheme was only the market value of the Airtel shares allotted, which came to about ₹33.93 crore, making the duty under Article 25(da)(ii) only about ₹23.75 lakh. Since there was no separate consideration paid, share value alone formed the full consideration. The Collector’s reliance on enterprise value/net worth had no legal basis under Article 25(da).

Comparing the two ceilings in the proviso to Article 25(da), the duty at 5% of TTML’s immovable property value in Maharashtra (₹1.86 crore) was higher than the duty based on share value. Therefore, ₹1.86 crore was the correct and maximum payable duty an amount already paid by Airtel. The High Court held that the Collector and the CCRA had erred, set aside their orders, and allowed the writ petition.

12. SEBI’s Order Directing Company and Directors to Disgorge Unlawful Gains Set Aside as It Was Issued Four Years Later Without Reasonable Cause: SC

Securities and Exchange Board of India vs. Ram Kishori Gupta [2025] 173 taxmann.com 299 [07-04-2025]

In the instant case, VCL, a public limited company, was alleged by the Securities and Exchange Board of India (SEBI) to have issued misleading advertisements in relation to its buyback of shares, bonus issue, and preferential allotment. SEBI claimed that these advertisements were intended to artificially inflate demand for VCL’s shares and mislead investors. Accordingly, a show-cause notice was issued in 2005 to VCL and its promoters.

Pursuant thereto, SEBI passed an order in 2008 imposing penalties on the company and its directors, including debarring them from accessing the securities market for specified periods. This order was subsequently set aside by the Securities Appellate Tribunal (SAT), which remanded the matter to SEBI for fresh consideration. After reconsideration, SEBI passed a fresh order in 2014 imposing penalties on VCL and its directors; however, no direction for disgorgement of alleged unlawful gains was issued. The said order attained finality.

In 2018, following complaints filed by two investors, Ram Kishori Gupta and Hiralal Gupta, alleging losses suffered due to the misleading advertisements, SEBI reopened the matter and passed another order directing VCL and its directors to disgorge unlawful gains amounting to ₹4.55 crore, along with additional penalties for non-compliance. The appellants challenged this order on the ground that the proceedings had already concluded with finality in 2014.

The SAT, by its order dated 2021, set aside the disgorgement direction, holding that SEBI could not initiate fresh proceedings on the same cause of action after the 2014 order had attained finality. The Tribunal invoked the doctrine of res judicata, observing that multiple final orders on the same issue were impermissible.

On appeal, the Supreme Court upheld the decision of the SAT. The Court held that once SEBI had consciously chosen not to order disgorgement in its 2014 final order, it could not revisit the same issue four years later in the absence of any valid or reasonable cause. The Court also criticised SEBI for the inordinate and unexplained delay in initiating disgorgement proceedings, noting that such conduct undermines regulatory certainty and investor confidence.

However, the Supreme Court disagreed with the SAT’s direction awarding costs of ₹2 lakh to each appellant, holding that such an award was unwarranted. The Court observed that although the appellants were aggrieved by SEBI’s actions, they were not entitled to a monetary reward, particularly when the prolonged litigation resulted from SEBI’s procedural lapses.

Accordingly, SEBI’s appeal was dismissed, and the disgorgement order was set aside, reinforcing the principle that regulatory authorities must act within a reasonable time and respect the finality of concluded proceedings.

13. Interest on Penalties Imposed by SEBI Is Payable From Date of Adjudication Orders and Not From Demand Notice: SC

Jaykishor Chaturvedi vs. Securities and Exchange Board of India [2025] 176 taxmann.com 444 (SC) [15-07-2025]

In the instant case, the appellants, promoter-directors of a listed company, violated SEBI’s Insider Trading Regulations by purchasing shares between October 2012 and July 2013 without making the required disclosures. SEBI’s Adjudicating Officer imposed monetary penalties by orders dated 28 August 2014, granting 45 days for payment. These orders were upheld by the Securities Appellate Tribunal and later by a three-judge Bench of the Supreme Court, thereby attaining finality. Upon failure to pay, SEBI issued recovery notices in May 2022 demanding the penalty along with interest and initiated attachment proceedings.

The Supreme Court examined Section 28A of the SEBI Act, which incorporates Section 220 of the Income-tax Act, and held that unpaid SEBI penalties automatically attract interest at 12% per annum by operation of law. The Court clarified that the SEBI Act does not require a separate demand notice for recovery; the adjudication order itself constitutes a valid and enforceable demand. Consequently, the liability to pay interest crystallises upon expiry of the time granted in the adjudication order, even if interest is not expressly mentioned therein.

Rejecting the appellants’ contention that interest should run only from the 2022 demand notices, the Court held that such notices merely reiterate an existing liability and do not create a fresh one. Interest on penalties being compensatory in nature is intended to offset the loss to the public exchequer caused by delayed payment. Accordingly, the Supreme Court upheld the SAT’s decision, dismissed the appeals, and directed payment of interest at 12% per annum from the expiry of the 45-day period following the adjudication orders dated 28 August 2014.

14. HC Refuses to Quash Criminal Proceedings as Consent Order and Payment Made by Petitioner Didn’t Affect Prosecution

Manoj Gokulchand Seksaria vs. State of Maharashtra [2025] 180 taxmann.com 646 (Bombay) [14-11-2025]

In the instant case, SEBI discovered a large-scale IPO scam in the offerings of Yes Bank and IDFC, where the petitioner and other accused allegedly created thousands of fictitious bank and demat accounts, applied in the retail investor category, illegally cornered shares meant for genuine small investors, and later transferred and sold them for huge profits. A criminal investigation by the CBI led to charge sheets alleging a detailed conspiracy involving forged documents, fake identities, and assistance from public sector bank employees. Parallelly, SEBI initiated administrative and civil proceedings, after which the petitioner filed consent applications under SEBI’s 2007 Consent Circular and paid Rs. 2.25 crore (disgorgement + settlement). The consent order, however, expressly settled only SEBI’s civil/adjudication actions.

Armed with the consent order and payment made to SEBI, the petitioner sought quashing of the CBI criminal prosecutions under Section 482 CrPC, arguing that the consent settlement implied composition of offences. The key question was whether SEBI’s consent mechanism and the petitioner’s payment could extinguish or override criminal prosecution for serious offences involving forgery, conspiracy, cheating, and violations impacting the IPO process and retail investors.

The Bombay High Court held that SEBI’s consent order had no impact whatsoever on the criminal prosecutions, since it settled only civil/administrative proceedings and did not and legally could not cover grave criminal offences. The Court emphasised that the acts alleged amounted to a well-planned economic fraud and conspiracy affecting the integrity of markets and rights of retail investors crimes against society. Payment of money under a consent order cannot wash away criminal liability, and quashing such prosecutions would set a dangerous precedent and erode public confidence in the justice system. Therefore, the petitions to quash the criminal proceedings were dismissed, and continuation of prosecution was held fully justified.

15. Limitation Act Applies to Arbitration Proceedings Under MSMED Act and Not to Conciliation Proceedings: SC

Sonali Power Equipments (P.) Ltd.  vs. Chairman, Maharashtra State Electricity Board [2025] 176 taxmann.com 662 (SC) [17-07-2025]

In the instant case, Small-scale industries supplied transformers to the Maharashtra State Electricity Board between 1993-2004. Due to long payment delays, they approached the Facilitation Council in 2005–06 under the old 1993 Act, which was later replaced by the MSMED Act, 2006. The Council awarded interest in 2010, but the buyer challenged the award under Section 34 of the Arbitration and Conciliation Act (ACA), arguing the claims were time-barred. The Commercial Court and the High Court agreed, holding that “amount due” cannot include time-barred claims and that limitation applies to proceedings under Section 18 of the MSMED Act.

The Supreme Court examined two key questions:

• whether the limitation applies to conciliation under Section 18(2) of the MSMED Act and whether time-barred claims can be referred to conciliation; and
• whether the limitation applies to arbitration under Section 18(3). It further examined the interaction between the MSMED Act, especially Section 43 (limitation applicable to arbitration) and Section 2(4) (statutory arbitration). The Court also considered whether disclosures of unpaid dues in the buyer’s financial statements under Section 22 MSMED Act could extend limitation under Section 18 of the Limitation Act.

The Supreme Court held that the limitation does not apply to conciliation under Section 18(2) because the limitation bars only the remedy, not the underlying right, and time-barred debts may still be settled contractually (e.g., through a conciliation settlement). However, a limitation does apply to arbitration under Section 18(3) because Section 18(3) expressly makes the ACA applicable as if there were an arbitration agreement, thereby attracting Section 43 ACA. The MSMED Act, as a special law (Sections 18 & 24), overrides Section 2(4) of the ACA. The Court also clarified that any extension of limitation based on financial-statement disclosures under Section 22 must be assessed case-by-case. Accordingly, the High Court was wrong regarding conciliation but correct regarding arbitration.

16. SC Approves Relief to Depositors of Sahara Co-Operative Societies by Releasing ₹5,000 Crore From Refund Account

Pinak Pani Mohanty vs. Union of India [2025] 178 taxmann.com 488 (SC) [12-09-2025]

The Supreme Court considered the issue of refund to depositors of various Sahara Group companies and co-operative societies, in relation to the amounts lying in the Sahara–SEBI Refund Account. As on date, approximately ₹24,979.67 crore remained unutilised in the said account.

Earlier, the Court had permitted the disbursement of ₹5,000 crore through an online, court-supervised mechanism to ensure verification and payment to genuine investors. Subsequently, the authorities overseeing the refund process submitted that a substantially larger number of investors—estimated at around 32 lakh—were expected to file claims by December 2026. It was further stated that about ₹24,533.18 crore continued to remain available in the refund account, and accordingly, a request was made for the release of an additional ₹5,000 crore.

SEBI conveyed that it had no objection to the release of further funds and undertook to adhere to the procedure already approved by the Court.

Accepting the request, the Supreme Court directed that an additional sum of ₹5,000 crore be transferred from the Sahara–SEBI Refund Account to the Central Registrar of Co-operative Societies for distribution to genuine investors, under the supervision of Justice R. Subhash Reddy (Retd.). The Court also extended the timeline for completion of the refund process up to 31 December 2026.

17. Lone Homebuyer Cannot Challenge Voting by Authorised Representatives of Majority Financial Creditors: NCLAT

Digvijay Laxhamsinh Gaekwad vs. Sapna Govind Rao [2025] 171 taxmann.com 676 [07-02-2025]

In the instant case, the appellants and the private respondents made competing open offers to acquire shares of a target company, giving rise to a dispute concerning the determination of the “date of public announcement” under Regulation 20(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

The private respondents contended that the relevant public announcement date was 25 September/3 October 2023. In contrast, the appellants asserted that the correct date was 18 January 2025, arguing that the private respondents, being non-banking financial companies (NBFCs), could make a valid open offer only after obtaining approval from the Reserve Bank of India, which was granted on 9 December 2024.

Proceeding on the basis of their asserted date, the appellants filed an application before SEBI on 22 January 2025. The private respondents objected, claiming that the application was time-barred. SEBI, meanwhile, advised the appellants to file an application for exemption under Regulation 11 of the Takeover Regulations, which the appellants submitted by way of abundant caution.

At the relevant time, SEBI had yet to decide three substantive issues:

• the correct date of the public announcement under Regulation 20(1);
• whether the appellants were entitled to an exemption under Regulation 11; and
• the determination of the appropriate offer price, given the dispute between adopting the acquisition price of September 2023 and the prevailing market price in January 2025.

Meanwhile, the tendering period of the public offer was scheduled to close on 7 February 2025, and the private respondents had already deposited ₹330 crore in an escrow account.

In these circumstances, the Supreme Court directed the appellants to deposit ₹600 crore, either in cash and/or by way of bank guarantee, in accordance with SEBI Regulations, on or before 12 February 2025, failing which the order would automatically stand vacated. The Court further directed that the public offer, originally closing on 7 February 2025, shall remain open until 12 February 2025. If the appellants made the required deposit, the offer would continue until the expiry of three working days after SEBI renders its decision on the appellants’ application.

The Court clarified that the directions were purely interim in nature, that SEBI must adjudicate all pending issues independently on their merits, and that the order shall not be treated as a precedent.

18. ROC’s Order Extending AGM Can’t Be Challenged as Companies Act Doesn’t Mandate Shareholders’ Hearing Before Considering Extension: HC

M.B. Finmart (P.) Ltd. vs. Registrar of Companies, National [2024] 169 taxmann.com 259 (Delhi)/[2024] 246 COMP CASE 589 (Delhi) [30-08-2024]

The Delhi High Court held that shareholders cannot challenge the RoC’s order granting an extension of time to a company to hold its AGM under Section 96(1) of the Companies Act, 2013, solely because the order does not explicitly state “special reasons.” The Court emphasised that the Companies Act does not require the RoC to hear shareholders before deciding on such applications, and the RoC is not expected to assess the adequacy or sufficiency of the reasons provided by the company. Extensions are considered routine unless there is clear evidence of malafide intent or prejudice to stakeholders.

The Court further noted that disputes regarding the management or alleged mismanagement of a company’s affairs are shareholder disputes that fall under the jurisdiction of the National Company Law Tribunal (NCLT) under Sections 241–242, and not within the writ jurisdiction of the High Court. Shareholders cannot invoke writ remedies merely because they disagree with routine administrative decisions, such as granting a time extension for an AGM, especially when no fundamental or legal rights are shown to be violated.

In conclusion, the Court observed that while procedural improvements in the format of RoC orders may be desirable, the mere absence of “special reasons” in the order does not make it illegal or susceptible to challenge. Since the petitioners failed to demonstrate any exception grounds or larger public interest, the writ petition seeking to quash the RoC’s order was dismissed.

19. Stipulation Referred to in NSE Circular Dated 02-09-2022 With Respect to Penalty Refund for Margin Shortfall Without SEBI’s Approval Was to Be Quashed: HC

Vimal Kumar Gupta vs. National Stock Exchange of India, Mumbai [2025] 171 taxmann.com 43 (Madras) [14-10-2024]

In the instant case, the petitioner, Vimal Kumar Gupta, an investor and client of HDFC Securities, was levied a penalty by his broker for short/non-collection of upfront margins. NSE issued Circular No. 60/2022 (2-9-2022) directing that such penalties be refunded only if passed on to clients after 11-10-2021. The petitioner challenged the circular, arguing that the date restriction was arbitrary, discriminatory, and beyond NSE’s authority, as investors had no control over the date on which penalties were levied.

The High Court noted that SEBI-issued circulars prior to 2019 were backed by statutory powers under the SEBI Act and SCRA, while NSE-issued circulars post-2020 were unilateral and lacked SEBI sanction. The court observed that the date 11-10-2021 had no basis, creating discrimination between investors penalised before and after that date. The petitioner was entitled to relief for penalties irrespective of the arbitrary date, as the selection of the date caused prejudice beyond the control of affected investors.

The Court held that the date stipulation in Circular No. 60/2022 was arbitrary and quashed it. The GRC order denying partial relief based on this date was set aside, and the matter was remitted to the GRC for de novo consideration, without being circumscribed by the 11-10-2021 date. The case reaffirmed that NSE cannot unilaterally impose conditions on benefits extended by SEBI and that investor protection principles must guide regulatory measures.

20. SC Holds Will Invalid as Appellant Failed to Prove That Testator Executed It With Sound Mind and Without Any Instigation

Leela vs. Muruganantham [2025] 170 taxmann.com 494 (SC) [02-01-2025]

In the instant case, the Supreme Court of India addressed the validity of an unregistered Will executed by ‘B’, who had two marriages. After a partition of his properties in 1989 among his first wife, children from both marriages, and himself, B passed away in 1991. The appellant, B’s second wife, claimed that B had executed a Will in 1990 in her favor and that of her sons, seeking to override the prior partition. The trial court dismissed the suit, finding the Will suspicious, and the High Court upheld this decision.

The Court noted several circumstances raising doubt about the Will’s authenticity, the stamp papers for the Will were purchased in the appellant’s name, yet she denied any involvement in its execution; the attesting witness was the appellant’s brother; the testator’s health was poor and his mental capacity at the time of execution was unproven; and there were inconsistencies regarding the place and manner of execution. The evidence failed to establish that B understood the contents of the Will and executed it voluntarily, free of external influence.

The Supreme Court upheld the concurrent findings of the lower courts, emphasising that the propounder of a Will must prove execution by the testator with a sound mind and understanding of its contents. The appellant could not remove the suspicious circumstances, and therefore, the Will was not deemed valid. Consequently, the appellant and her sons could not claim the properties under the Will, though they retained their respective shares from the original partition. The appeal was dismissed.