Section 23H of The Securities Contracts (Regulation) Act, 1956 in hindi
1[23H. Penalty for contravention where no separate penalty has been provided.--Whoever fails to comply with any provision of this Act, the rules or articles or bye-laws or the regulations of the recognised stock exchange or directions issued by the Securities and Exchange Board of India for which no separate penalty has been provided, shall be 2[liable to a penalty which shall not be less than one lakh rupees but which may extend to one crore rupees].
Summary
- It acts as a general, catch-all penalty provision under the Act.
- It applies to any person or entity who fails to comply with any provision of this Act.
- It also covers failures to comply with the rules, articles, bye-laws, or regulations of a recognised stock exchange.
- It includes failures to comply with directions issued by the Securities and Exchange Board of India.
- It only triggers if no separate, specific penalty is provided elsewhere in the Act for that particular violation.
- The penalty starts at a minimum of one lakh rupees and can extend up to a maximum of one crore rupees.
Practical examples
FAQ
1. What is the purpose of Section 23H?
It is a catch-all penalty. It ensures that any violation of the Act, exchange rules, or regulator directions can still be penalized, even if the lawmakers did not write a specific penalty section for it.
2. Under what condition does Section 23H apply?
It applies only when no separate, specific penalty has been provided elsewhere in the Act for the particular violation.
3. What is the penalty range for a general violation under Section 23H?
The penalty cannot be less than one lakh rupees, and it can go up to a maximum of one crore rupees.
4. Does Section 23H cover violations of a stock exchange's bye-laws?
Yes, it explicitly covers failures to comply with the rules, articles, bye-laws, or regulations of a recognised stock exchange.
Test yourself
Q1.Under Section 23H of The Securities Contracts (Regulation) Act, 1956, what is the minimum penalty for a general contravention where no separate penalty is provided?
Q2.When does Section 23H of The Securities Contracts (Regulation) Act, 1956, apply to a violation?
Q3.Under Section 23H of The Securities Contracts (Regulation) Act, 1956, what is the maximum penalty that can be imposed?
Q4.Under Section 23H of The Securities Contracts (Regulation) Act, 1956, which of the following is NOT listed as a source of rules or obligations whose violation could trigger this general penalty?
Q5.Under The Securities Contracts (Regulation) Act, 1956, if a stock broker fails to segregate client securities, can they be penalized under the general catch-all Section 23H instead of the specific Section 23D?