The Role Of High Courts In Investor Protection In India

Author: LawSphereX

Category: General Law

Published: 2026-08-23T21:30:14.232565+00:00

Updated: 2026-08-26T17:05:22.325+00:00

THE ROLE OF HIGH COURTS IN INVESTOR PROTECTION

IN INDIA

S. Rahul Aaditya, Tamil Nadu National Law University

ABSTRACT

This paper examines the role of High Courts in investor protection in India, particularly in light of evolving securities regulation and tribunalization. Despite the establishment of specialized forums like the Securities Appellate Tribunal (SAT) and the direct appellate jurisdiction of the Supreme Court under Section 15Z of the SEBI Act, the study investigates whether High Courts continue to play a meaningful role in safeguarding investor interests. It explores how High Courts exercise their constitutional powers under Articles 226 and 227 to address procedural arbitrariness, regulatory overreach, and constitutional violations by bodies such as SEBI. The research adopts a doctrinal methodology, analyzing statutes, regulations, judicial precedents, and scholarly literature.

It reviews key provisions of the SEBI Act, including Sections 26A and 26C, which relate to the appointment and appellate oversight of Special Courts. The paper also evaluates landmark case laws—such as Pradeep Mehta v. Union of India and Manoj Gokulchand Seksaria v. State of Maharashtra —to illustrate how High Courts have intervened to uphold principles of natural justice, proportionality, and due process in regulatory enforcement actions. Findings reveal that while tribunalization has streamlined dispute resolution in securities matters, it has not rendered High Courts obsolete. They remain critical in ensuring regulatory accountability, protecting fundamental rights under Articles 14, 21, and 300A, and reviewing the legality of SEBI circulars and actions.

The study concludes that the High Courts continue to serve as vital guardians of investor rights, balancing regulatory efficiency with constitutional fairness and judicial oversight in India’s evolving financial markets.

Index of Authorities Statues Referred Indian Constitution Securities Exchange Board of India Act 1992 Code of Criminal Procedure 1973 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 SEBI (Delisting of Equity Shares ) Regulations, 2009 Case Laws Manoj Gokulchand Seksaria v. State of Maharashtra. Pradeep Mehta vs Union Of India And 5 Ors List of Abbreviations

1. SEBI - Securities and Exchange Board of India

2. LODR - Listing Obligations and Disclosure Requirements

3. SCR Act - Securities Contracts (Regulation) Act, 1956

4. SAT - Securities Appellate Tribunal

5. CDSL - Central Depository Services (India) Limited

6. BSE - Bombay Stock Exchange

7. NSE - National Stock Exchange of India

8. CIR - Circular (used in reference to SEBI circulars, e.g., CIR/CFD/CMD/12/2015)

9. IFSC - Indian Financial System Code

10. TDS - Tax Deducted at Source

11. SOP - Standard Operating Procedure

12. CrPC - Code of Criminal Procedure, 1973

The Role of High Courts in Investor Protection in India

1. Introduction:

Investor Protection in simple language refers to the regulations and measures that have been formulated to protect the interests of the investors such as their Return on Investment (ROI), Growth Potential and liquidity(It refers to the ease at which an entity in this case a security can be easily converted into cash without losing its value) 1from fraud, scams malpractices and to ensure that the investors investment in securities such as bonds, stocks, mutual funds are handled legitimately. 2 The term investor protection has not been defined explicitly either in the Securities Exchange Board of India Act 1992 nor the Companies Act 2013. Investor Protection remains as a critical topic even today as the complexity surrounding the financial markets is more complex than never before due to increase in technology and a major increase in rising retail investor participation.

This increase can be only be attributed to the democratisation of investment through platforms in the digital medium like Zerodha, Groww, Robinhood. As now investing has become easier as we have the means to invest through digital platforms, the number of demat accounts alone have grown from 40 million in March 2020 to

120 million as of December 20233. That is there has been increase by three hundred percent in

the last three years according to data published by the National Securities Depositories Limited. Review of Literature:

1. Author Gaurav Purohit, Role of Courts in Protection of Shareholders and Creditors,

1Liquidity, INVESTOPEDIA,

2 Role of SEBI in Investor Protection , Legal Upanishad,

3 Demat Accounts in India See a Huge Surge: From 40 Million to 120 Million, National Securities Depositories Limited,

Lex Peeps. This article discusses the provisions for creditor and shareholder protection, with a special focus on the role of the courts in safeguarding their interests. It emphasizes the importance of judicial intervention in the case of corporate fraud as well as mismanagement. The article provides a comprehensive picture of the legal framework and judicial precedents that have shaped investor protection in India.

2. Firoz Haider Rizvi, Protection of Investors in the Indian Constitution, Indian Journal

of Law and Legal Research This paper explores the constitutional provisions and legal framework in India aimed at protecting investors, including an analysis of relevant constitutional provisions, legislative enactments, and judicial pronouncements. Research Objectives :

1. To analyze how High Courts exercise their jurisdiction under Articles 226 and 227 of the

Constitution to protect investors in matters of securities.

2. To assess the functioning of High Courts in hearing appeals from specialized tribunals like

the Securities Appellate Tribunal (SAT) and Special Courts under the SEBI Act.

3. In order to examine the effect of setting up Special Courts under Section 26A of the SEBI

Act on the jurisdiction of High Courts in deciding securities-related offences Research Questions:

1. How do High Courts invoke their jurisdiction under Articles 226 and 227 of the

Constitution to safeguard investors in security-related matters?

2. What is the role of High Courts in reviewing the decisions of specialized

tribunals such as the Securities Appellate Tribunal (SAT) and Special Courts under the SEBI Act?

3. What is the effect of the institution of Special Courts under Section 26A of the SEBI

Act on the function of High Courts in trying securities-related offences?

Statement of Problem The growing intricacy of securities regulation and the institution of dedicated tribunals such as the Securities Appellate Tribunal (SAT) have created apprehensions regarding the reduced role of High Courts in investor protection. Though Section 15Z of the SEBI Act provides a direct appeal to the Supreme Court over High Courts, constitutional breaches or procedural arbitrariness by regulatory bodies are still within the jurisdiction of High Courts through Articles 226 and 227. The issue is how effectively the High Courts can reconcile their age-old function of protecting constitutional rights with the new dynamics of regulation of securities. Also, it is important to evaluate whether tribunalization has destroyed the High Courts' role as a check against regulatory overreach or if their oversight powers still exist.

This study aims to fill these voids by investigating the ongoing viability of High Courts in providing fairness, accountability, and investor trust in India's securities market ecosystem. Research Methodology The research methodology adopted in this research paper is doctrinal. The pattern of research is analytical in nature. Primary sources such as Acts, Regulations, Judgments, etc, and Secondary sources such as books, articles, journals, etc. , are used in this research.

2. Role of SEBI and Supreme Courts in Investor Protection in India

The Securities and Exchange Board of India (SEBI) is the topmost regulatory authority tasked with regulating and supervising the securities market in India. Formed in 1988 and conferred statutory powers by the SEBI Act of 1992, the main aims of SEBI are to safeguard the interests of investors, facilitate the growth of the securities market, and regulate the market for fairness and transparency. Investor protection has been a fundamental mandate of SEBI, and the organization has taken a number of measures, regulations, and initiatives to protect investors against malpractices, frauds, and manipulation in the market. 4 SEBI’s regulatory framework for investor protection is comprehensive and multifaceted, covering various aspects of the securities market. Some key regulations include the SEBI 4 Role of SEBI in Investor Protection In India, Law Notes available at:- https://lawnotes.

co/role-of-sebi-ininvestor-protection-in-india/

LODR regulations5, Prohibition of Insider Trading regulation6, Prohibition of Fraudulent and unfair trade practices regulation,7 significantly contribute towards investor protection in India. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 makes it obligatory for listed companies to make available material information on a timely basis and in an accurate form. These include quarterly financial performance, shareholding pattern, and any events that can influence the stock price. This legislation makes a crucial role that the investors have access to all the required information that would enable them make informed investment decisions. SEBI has put in place stringent regulations to prevent insider trading, which is trading on nonpublic, material information.

The SEBI (Prohibition of Insider Trading) Regulations, 2015 mandate listed companies to have internal procedures for preventing insider trading and to prevent insiders, such as employees and directors, from abusing privileged information. The purpose of SEBI's "Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, 2003" is to stop behaviours that could hurt investors, like "price rigging" and "market manipulation. " In order to find and punish organisations involved in these kinds of crimes, SEBI has been diligent. This method increases investor confidence and ensures that those involved in actions that result in market price manipulation face consequences. Section 15Z of the Act8, pertains to the special provisions relating to appeals to the Supreme Court in respect of matters connected with the securities market.

Section 15Z stipulates that any person aggrieved by an order or decision of the Securities Appellate Tribunal may appeal to the Supreme Court. This provision provides investors, intermediaries, and other parties to the securities market a direct access to the highest court of the country for adressing their grievances. The appeal can be filed on any question of law arising out of the order of the Securities Appellate Tribunal. This implies that the jurisdiction of the Supreme Court is mostly concerned with legal interpretations and principles, as opposed to factual findings. 5 Securities and Exchange Board of India. (Lisitng Obligations and Disclosure Requirements) Regulations 2015. 6 Securities and Exchange Board of India. (Prohibition of Insider Trading Regulation) Regulations 2015 7 Securities and Exchange Board of India.

(Prohibition of Fraudulent and unfair Trade Practices relating to Securities Market ) Regulations 2003

8 Section 15Z of the Securities Exchange Board of India Act 1992

The appeal should be made within sixty days from the date of receipt of the decision or order of the Securities Appellate Tribunal. This will provide a balance between timely determination of disputes on the one hand and sufficient preparation time for the appeal on the other. The Supreme Court has discretion to permit belated filing of appeals if it is satisfied that the appellant was prevented by reasonable cause from filing within the initial period. The court can extend up to a further sixty days, which introduces some latitude in exceptional cases. The role of the Supreme Court under Section 15Z ensures consistency in the application and interpretation of securities laws throughout the nation. This leads to a more stable and predictable regulatory framework, which is critical for investor confidence. The case of SEBI v.

Sunil Krishna Khaitan 9whose judgment was pronounced on 11-7-2022, gives valuable insights into the role of the Supreme Court in protecting investors and its importance in interpreting securities law, especially under the SEBI Act, 1992. The Supreme Court was significant in interpreting certain provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, specifically Regulations 10 10and 11(1). 11The Court served as a check on SEBI's exercise of powers by examining whether what it was doing was in consonance with the past interpretations and practices. It stressed that regulatory bodies such as SEBI are required to act consistently unless there is a good reason for deviating from such consistency.

By emphasizing the doctrine of "substantive legitimate expectation," the Court made it impossible for SEBI to override its own longstanding interpretations at whim, which could lead to uncertainty and prejudice against regulated entities. By making it possible for SEBI to act consistently on established interpretations of the regulations, the Court safeguards investors from arbitrary enforcement action that could destabilize the markets or unjustly punish firms. 3. The Role of Civil Court in Investor Protection Section 15Y of the SEBI Act states that “No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which an adjudicating officer appointed under

9 (2023) 2 SCC 643

10 Regulation 10, Securities Exchange Board of India, (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 11 Regulation 11(1), Securities Exchange Board of India, (Substantial Acquisition of Shares and Takeovers) Regulations, 1997

this Act or a Securities Appellate Tribunal constituted under this Act is empowered by or under this Act to determine, and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act”. 12 This section categorically prohibits civil courts (such as district courts) from hearing any suit or proceeding in respect of any matter that is under the jurisdiction of SEBI, its adjudicating officers, or the Securities Appellate Tribunal. This guarantees that securities-law violations or disputes are settled through the specialized regulatory process under SEBI, and not by general civil courts.

4. Tribunalisation and High Courts

Tribunals are judicial or quasi-judicial bodies created by law13. They aim to offer a platform for quicker adjudication compared to regular courts, as well as specialization on some subject matters. 14 Pendency of cases in courts is one of the major problems confronting the judicial system. 15, As of June 6, 2021, there are 91,885 cases pending for over 30 years in various High Courts of India. 16 As of May 1, 2021, there are 67,898 pending cases in the Supreme Court17. The Law Commission of India (2017) observed that pendency in courts results in delays in the administration of justice, thus, affecting efficiency of the judicial system. In addition to this, it also observed that in some technical matters, expert knowledge is required by the traditional courts for their adjudication.

In this note, the tribunal system in India, as regards its evolution, administration, working, and the proposed reforms to enhance their working, is being discussed. Articles 323A and 323B were added to the Constitution of India by the 42nd Amendment in 1976. Article 323A authorized Parliament to set up administrative Tribunals (both central and state) for deciding cases concerning recruitment and service conditions of public servants. Article 323B laid

12 Section 15Y of the Securities Exchange Board of India Act 1992

13 Report No. 272 – Assessment of Statutory Frameworks of Tribunals in India, Law Commission of India, October 2017. 14 Administrative Justice and Tribunals: Final report of progress against the Strategic Work Programme 2013- 2016, Ministry of Justice, Government of United Kingdom, March 2017

15 Report No. 230 – Reforms in the Judiciary: Some Suggestions, Law Commission of India, August 2009

16 Report No. 245 – Arrears and Backlog: Creating Additional Judicial (wo)manpower, Law Commission of India, July 2014

17 Monthly pending cases as of May 1, 2021, Supreme Court of India

down certain matters (like taxation and land reforms) on which Parliament or state legislatures can set up tribunals by passing a law. In 2010, the Supreme Court made it clear that subject matters under Article 323B are not restricted, and legislatures have the authority to establish tribunals on any subject matters within their jurisdiction as set out in the Seventh Schedule of the Constitution. 18 Nowadays, tribunals have been established both as alternatives to High Courts and as below High Courts. In the latter scenario, appeals from Tribunals' orders (e. g. , Securities Appellate Tribunal) directly go to the Supreme Court. Significantly, Presiding Officer of the SAT must be a retired High Court Judge or Chief Justice which, in turn, speaks volumes about the standing of the SAT and the judicial acumen it possesses.

The singularity of SAT's status also derives strength from Section 15M of the SEBI Act 19to the effect that judicial experience of the High Court alone can head the Tribunal. Thus, the qualification threshold to head the Tribunal inscribed into the SEBI Act, once again reinforces the colossal judicial standards the Tribunal represents. While SAT is not constitutionally in the position of a High Court, its institutional place in the legal hierarchy is unique, designed exclusively to serve the specialized needs of securities regulation. Section 15Z of the SEBI Act also strengthens this function by providing for appeals from the SAT's orders to go directly to the Supreme Court. 20 5.

The Role of High Courts in Investor Protection according to the SEBI Act The SEBI Act, 1992 makes provisions for the role of the High Court in certain areas of regulation of securities and protection of investors, although less direct than specialized tribunals such as the Securities Appellate Tribunal (SAT) or the Supreme Court. Such as we have section 26A(2) of the act21 which explicitly states “A Special Court shall consist of a single judge who shall be appointed by the Central Government with the concurrence of the Chief Justice of the High Court within whose jurisdiction the judge is working”. Subject to Section 26A, the Central Government may also set up Special Courts 18 Union of India vs R. Gandhi and Ors. , 2010 (261) ELT3 (S. C. ), Supreme Court of India, May 11, 2010

19 Section 15M of the Securities Exchange Board of India Act 1992

20 Ravi Prakash, Mohit Sirohi and Siddhant Sekhri, SAT's Achilles' Heel: The Urgent Case For Contempt Powers, Live Law

21 26 A(2) of the Securities Exchange Board of India Act 1992

for the expeditious trial of offences under the SEBI Act. The High Court is also involved in this process by giving consent to appoint judges to the Special Courts. Section 26C of the act 22 states that “The High Court may exercise, so far as may be applicable, all the powers conferred by Chapters XXIX and XXX of the Code of Criminal Procedure, 1973 on a High Court, as if a Special Court within the local limits of the jurisdiction of the High Court were a Court of Session trying cases within the local limits of the jurisdiction of the High Court”. What this provision basically states that The Code of Criminal Procedure, 1973 (CrPC), Chapter XXIX, grants the High Court appeal authority over decisions rendered by Courts of Session. Under Section 26C, the High Court can hear appeals against those orders of the Special Courts set up under the SEBI Act.

This guarantees that aggrieved parties to the judgments of Special Courts (which hear offenses against the SEBI Act) can seek redressal from the High Court, thus adding a further check of judicial oversight. This provides a safeguard so that aggrieved parties before Special Courts (which adjudicate offences under the SEBI Act) can appeal to the High Court for redressal, thus giving a second layer of judicial review. Section 26A23 of the SEBI Act authorizes the Central Government to appoint Special Courts for expeditious trial of offences under the Act. These offences are mainly criminal in character and consist of breaches of such provisions as insider trading like 12A24. Special Courts are meant to dispose of such criminal cases expeditiously, so as to ensure that the offence relating to securities is tried without unnecessary delay.

Prior to the SEBI (Amendment) Act, 2002 amendment, appeals against Securities Appellate Tribunal (SAT) rulings were submitted directly to the High Court under Section 15Z. 25In order to make sure that regulatory actions were just and legal at the time, the High Court actively participated in resolving disputes resulting from SAT orders. But in 2002, this clause was changed, giving the Supreme Court appellate jurisdiction instead of the High Court. Currently,

22 26C of the Securities Exchange Board of India Act 1992

23 26 A of the SEBI Act 1992

24 12 A of the SEBI Act 1992

25 15 Z of the SEBI Act 1992

the High Courts' authority is limited to SEBI Act charges decided under Section 26 of the SEBI Act.

6. Assessing Role of High Courts in matters related to Investor Protection or SEBI

through Writ Jurisdiction through Precedents In the previous chapter it was stated that the role of SEBI has been confined to only towards offences under SEBI that can be adjudicated by virtue of Section 26 of the Act. Before the 2002 amendment of the SEBI act by virtue of section 15Z adjudicated even cases that didn’t involve offences that were adjudicated by Securities Appellate Tribunal. Even before the Securities Appellate Tribunal was formed Prior to the formation of the SAT, High Courts were the principal appellate authority for appeals against actions of SEBI, including orders issued by adjudicating officers under the SEBI Act. High Courts were able to hear and decide appeals against orders of SEBI, providing a level of oversight and judicial review of SEBI's action.

The High Courts were entrusted with offering judicial review of the decisions of SEBI to ensure that they were in line with the law and natural justice principles. The role of the High Courts in this regard was an important part of the regulatory regime prior to the establishment of the SAT, which was afterwards formed to offer a specialized platform to settle disputes related to securities. Though the SEBI act and Tribunalization seem to have subsequently decreased or in other words limited the power of the High Court in adjudicating issues relating to issues adjudicated by SEBI and investor protection any constitutional violation or any infringement of constitutional right or procedural unfairness even now can be brought to the jurisdiction of High by virtue of Article 22626 and 22727.

Article 226 of the Indian Constitution gives High Courts the authority to issue certain writs to implement fundamental rights and other legal rights. These writs, such as habeas corpus, mandamus, prohibition, quo warranto, and certiorari, are used to remedy the violation of rights or to prevent public authorities from exceeding their powers. The jurisdiction of the High Court under Article 226 can extend to any person or authority within its territorial jurisdiction even

26 226 Article of the Constitution of India

27 227 Article of the Constitution of India x`

though the cause of action may arise outside such territory. Article 227 of the Indian Constitution provides for the superintendence of all courts and tribunals within its jurisdiction to the extent of its High Courts. The High Courts can exercise the power to oversee lower courts so that they may work within their powers, ensure procedural propriety, and do away with any injustice. To illustrate one example of the powers held by High Court in Investor Protection and adjudicating issues regarding procedural fairness of SEBI or if the actions of SEBI violate constitutional rights or principles of natural justice we can take the case of “Pradeep Mehta vs Union Of India And 5 Ors on 26 August, 2024” 28adjudicated by the High Court of Bombay.

The case concerns a writ petition filed by the petitioner against the acts of Securities and Exchange Board of India (SEBI), Bombay Stock Exchange (BSE), National Stock Exchange (NSE), and other respondents. The petitioner claimed that his demat accounts were arbitrarily frozen on the basis of circulars issued by SEBI, which laid down Standard Operating Procedures (SOPs) for suspension and cancellation of trading in the specified securities. The petitioner's demat accounts were said to be frozen without adherence to due process, in contravention of his constitutional and statutory rights. The petitioner in this case contented that The petitioner argued that SEBI and stock exchanges' impugned circulars and acts were ultra vires to the SEBI Act, 1992. Freezing of his demat accounts was arbitrary, unjustified, and against principles of natural justice.

The action was initiated against him even though his role as a promoter had ended, and he had no involvement in any malfeasance concerning the company's default. The respondents did not follow the procedures mandated under the SEBI Act, like adjudication under Section 15-I prior to levying penalties or taking coercive measures. The petitioner went to the High Court through Article 226 of the Constitution of India, which authorizes High Courts to issue writs for the enforcement of fundamental rights and other legal rights. In this case, the petitioner requested a writ of mandamus to invalidate the impugned circulars and actions of SEBI and the stock exchanges, claiming contraventions

28 WRIT PETITION NO. 1590 OF 2021 WITH WRIT PETITION NO. 2228 OF 2021

of, Article 14 29(Right to Equality), Article 21 30(Right to Life and Personal Liberty, including the right to livelihood), Article 300A 31(Right to Property). SEBI has wide-ranging powers of regulation under the SEBI Act, 1992, to safeguard investors and regulate the securities market like section 15-I 32which confers on SEBI the authority to deal with contraventions of the Act by way of an adjudicating officer, who imposes penalties upon affording a reasonable opportunity to the party affected of being heard. The High Court stated that although SEBI has sweeping regulatory powers, those powers need to be exercised in terms of the SEBI Act and according to the principles of the Constitution. This case highlights the necessity of judicial monitoring in ascertaining that SEBI utilizes its regulatory powers constitutionally and fairly.

While SEBI has immense powers to guard investors and manage the market of securities, its powers must be used in consonance with the SEBI Act and principles of the constitution. The High Court, in exercising its writ jurisdiction under Article 226, confirmed that actions taken by SEBI were examined with respect to their legality, reasonableness, and conformity to due process. To analyse the case of protection of Investors by High Court by virtue of its supervisory jurisdiction available by virtue of Article 227 by analysing the case of Manoj Gokulchand Seksaria v. State of Maharashtra. 33 The case is a writ petition presented by the petitioner against the actions of the Securities and Exchange Board of India (SEBI), Bombay Stock Exchange (BSE), National Stock Exchange (NSE), and other respondents.

The petitioner claimed that his demat accounts were arbitrarily frozen on the basis of circulars issued by SEBI, which laid down Standard Operating Procedures (SOPs) for the suspension and revocation of trading in specified securities. The freezing of the petitioner's demat accounts was supposedly done without observing due process, which infringed on his constitutional and statutory rights. The petitioner argued that the challenged circulars and steps taken by SEBI and stock exchanges were ultra vires to the SEBI Act, 1992. He further argued that freezing his demat accounts was arbitrary, unjust, and

29 Article 14 of the Indian Constitution

30 Article 21 of the Indian Constitution

31 Article 300A of the Indian Constitution

32 15-I of the SEBI Act 1992

33 WP No. 245 of 2020, order dated 5-1-2022

against principles of natural justice, especially as his position as a promoter had come to an end, and he was not connected with any misconduct in connection with the company's default. The petitioner also pointed out that the respondents did not follow the procedures laid down under the SEBI Act, like adjudication under Section 15-I, prior to imposing penalties or taking coercive measures. He also contended that the action against him was taken on the basis of stale information, as he had cut all his connections with the company in question years ago and was no longer a promoter or actively engaged in its activities.

The petitioner requested relief in the form of a writ of mandamus to set aside the impugned circulars and actions of SEBI and the stock exchanges, claiming infringements of his fundamental rights under Articles 14 (Right to Equality), 21 (Right to Life and Personal Liberty, including the right to livelihood), and 300A (Right to Property). The High Court weighed these contentions while reviewing whether the conduct of SEBI and the other respondents was legal and reasonable. Under Article 227 of the Constitution, the High Court used its supervisory jurisdiction to ensure that SEBI and stock exchanges functioned within the limits of law and abided by principles of fairness. The High Court in this case reviewed the freezing of the petitioner's demat accounts on the basis of circulars issued by SEBI without adhering to statutory procedure like adjudication under Section 15-I of the SEBI Act.

By dismissing the impugned orders, the Court ensured that the regulatory authorities could not arbitrarily sanction individuals, hence safeguarding investors against abuse of power and upholding confidence in the securities market. The High Court also weighed public interest against individual rights, ensuring that regulatory enforcement was fair and proportionate. It observed that the petitioner, who was no longer engaged with the company in question, had already settled the case with SEBI under the composition scheme (Section 24-A). 34Prolonging criminal proceedings against him would be an abuse of process, since the settlement had already taken into account public interest and the seriousness of the offence. By way of this intervention, the High Court reinforced the significance of settlement mechanisms and averting harassment of individuals,

34 24-A of the SEBI Act 1992

in consonance with its overarching duty in investor protection. Lastly, the High Court reinforced the importance of consistency and accountability in regulation. In invoking its powers under Article 227, it ensured that subordinate agencies such as SEBI and stock exchanges followed due process safeguards and acted transparently. Such judicial supervision, besides safeguarding the rights of the petitioner, also maintained the integrity of the securities market ecosystem so that regulatory measures fulfilled their purpose of investor protection without incurring undue injury to individuals.

7. Conclusion

The examination of the SEBI Act, 1992, and its interaction with the judicial system indicates that even after tremendous changes introduced by tribunalization and the creation of specialized forums such as the Securities Appellate Tribunal (SAT), the High Court remains a central figure in investor protection. Although Section 15Z of the SEBI Act presently permits appeals against SAT orders to be made directly to the Supreme Court, skipping the High Court, and the establishment of SAT has concentrated dispute resolution within the securities market structure, these changes have not reduced the role of the High Court. Rather, the High Court continues to be a potent institution for protecting investor rights under its constitutional powers under Articles 226 and 227.

The establishment of SAT was to facilitate a specialized and effective forum for hearing disputes emerging out of regulatory actions by SEBI. This has certainly decongested the process and ensured that technical and complex matters relating to securities are dealt with by specialists. The absence of the High Court from the immediate appellate process, however, does not imply rendering it otiose. Under Article 226, the High Court continues to have the jurisdiction to issue writs like mandamus, certiorari, and prohibition to remedy violations of fundamental rights or procedural justice by SEBI and other statutory authorities. Likewise, Article 227 gives the High Court supervisory jurisdiction over all courts and tribunals in its jurisdiction, allowing it to enforce compliance with legal principles and check abuse of power. The Manoj Gokulchand Seksaria v.

State of Maharashtra case is a prime example of the High Court's ongoing pertinence in investor protection. In spite of the presence of SAT and Section 15Z, the High Court stepped in to set aside arbitrary orders by SEBI and stock exchanges, reiterating the importance of procedural fairness, proportionality, and compliance with

principles of natural justice. The role played by the High Court in scrutinizing regulatory activity ensures that SEBI acts in exercising its sweeping powers within the law and does not act either arbitrarily or disproportionately. In addition, the High Court serves as a protector of constitutional rights, intervening when regulatory measures violate fundamental rights enshrined in Articles 14, 21, and 300A. It also offers an important check against abuse of circulars or regulations that can override statutory law or contravene principles of equity and justice. Through the exercise of its writ jurisdiction, the High Court ensures that investor confidence is not eroded by arbitrary or illegal actions of regulatory bodies.

In summary, although tribunalization and Section 15Z have transformed the appellate hierarchy of forums in securities regulation, the High Court is still essential in the investor protection system. Its jurisdiction under Articles 226 and 227 guarantees that regulatory measures are legal, reasonable, and consistent with constitutional principles. Even in the age of specialized tribunals and direct access to the Supreme Court, the High Court remains a crucial bulwark for justice, fairness, and accountability in the securities market system. Therefore, the High Court's continued role emphasizes the significance of a multi-layered judicial system in maintaining the integrity of investor protection mechanisms.