Supreme Court Upholds SEBI’s Power to Levy Interest on Unpaid Penalties
The Supreme Court held that under Section 28A of the SEBI Act, interest on unpaid penalties is recoverable as per Section 220 of the Income Tax Act, 1961, and accrues from the date the penalty becomes payable, not from the date of subsequent demand notices. The Court clarified that the adjudication order itself constitutes a valid demand, and interest is compensatory, not penal, in nature. The insertion of Explanation 4 to Section 28A merely clarified the existing legal position and did not introduce a substantive change. The Tribunal's dismissal of the appeals was upheld, affirming SEBI's authority to levy interest from the date of default.
Facts Of The Case:
The appellants, Jaykishor Chaturvedi and others, were promoter-directors of Brijlaxmi Leasing and Finance Limited, a company list...