Ignorance of the law is no excuse and a person cannot defend illegal actions by stating unawareness about his actions – THE SECURITIES AND EXCHANGE BOARD OF INDIA
The SEBI received a letter from TITAN company limited about the violation of SEBI (Prohibition of Insider Trading) Regulations, 2015. An investigation was conducted and several non-compliances of violating PTI regulation were observed and adjudication proceedings were initiated against Mr. Johnson Victorarockiaraj (Noticee) under the provisions of Section 15A(b) of Securities and Exchange Board of India Act, 1992 and in violation of Regulation 7(2)(a) of PIT Regulations. The proceedings were conducted by the appointed adjudication officer SOMA MAJUMDER [ADJUDICATION ORDER NO. Order/SM/DD/2021-22/14937]
A show-cause notice was issued with regards to the alleged violations under Rule 4 of the Adjudication Rules to show-cause as to why an inquiry should not be initiated against Noticee and penalty, if any, not be imposed upon him under the provisions of Section 15A(b) of SEBI Act for the aforesaid violation alleged to have been committed by him. The proceeding was initiated after the response of the noticee.
Adjudication proceedings were initiated and it was observed that the total value traded by Noticee in the scrip of Titan was Rs. 16,59,938/- which was more than rupees ten lakhs. the officer notices that the noticee has not disputed the impugned transactions by him in the scrip of Titan as specified above and in terms of Regulation 7(2)(a) of PIT Regulations, Noticee, being an employee of the company, was required to make disclosures to Titan, for each of the aforesaid transactions within two (2) working days and there was no evidence available on record to show the disclosures. The noticee through his response contends that he was not aware of trading restrictions under PIT Regulations. the authority relies on the principle of “ignorant Juris non excusat”, ignorance of the law is no excuse and everyone is presumed to know the law of the land. A person cannot defend his illegal actions by stating that he was not aware his actions were illegal, even if the noticee has honestly believed that they were not breaking the law. No merit was found in this response and the noticee was found to have violated Regulation 7(2)(a) of PIT Regulations.
the authority with regards to the attraction of monetary violations for the alleged violations relies on the case of Virendrakumar Jayantilal Patel vs. SEBI and SEBI v/s Shri Ram Mutual Fund [2006] 68 SCL 216(SC) and a penalty of Rs. 1,00,000/- were imposed under Section 15-I of the SEBI Act and order and directions were passed.
Order reviewed by Naveen Sharma
