Holding

A breach of the SEBI (Mutual Funds) Regulations, 1996 attracts penalty irrespective of the financial outcome to investors, and the appellants' actions constitute clear violations.

Summary

The Supreme Court examined appeals by Kotak Mahindra Asset Management Company, Kotak Trustee and senior executives challenging SEBI's penalties for alleged violations of the SEBI (Mutual Funds) Regulations, 1996. The appellants argued that their actions—extending the maturity of zero‑coupon debentures, withholding part of scheme proceeds, and not rolling over the schemes—did not cause loss to investors and even yielded gains, so no breach occurred. The Court held that the Regulations are consequence‑neutral; a breach attracts penalty irrespective of profit or loss, and the appellants failed to comply with statutory duties of due diligence, timely winding‑up, and disclosure. It rejected the defence that compliance would have caused loss and affirmed that the extensions and inadequate disclosures constituted clear violations. Consequently, the Court dismissed the appeals, upheld the penalties, and ordered costs against Kotak AMC and Kotak Trustee.

Issues considered

Whether a breach of SEBI (Mutual Funds) Regulations, 1996 can be excused when the alleged violation results in profit rather than loss to investors.
Whether extending the maturity dates of ZCNCDs and failing to roll over close‑ended schemes violates Regulation 33(4) and Regulation 39 of the 1996 Regulations.
Whether lack of due diligence, inadequate disclosures to unitholders and SEBI, and failure to seek SEBI approval constitute violations attracting penalty.
Whether the existence of similar breaches by other market participants can absolve the appellants from liability.
Whether senior executives can be exempted from penalty on the ground of absence of investor prejudice.

Legislation cited

SEBI (Mutual Funds) Regulations, 1996s. 25(16), s. 33(4), s. 39(1), s. rr.25(16), s. rr.33(4), s. rr.39
Securities and Exchange Board of India Act, 1992s. 15D(b), s. 15HB, s. 15Z

Headnote

Issue for Consideration Whether, in the facts and circumstances, there could be any breach or violation of SEBI (Mutual Funds) Regulations, 1996 where, as contended by the appellants: (i) the actions complained about did not result in any loss or harm to the investing public; of the Appellants resulted in gain to the investors; (iii) all three sets of Appellants acted bona fide in the interest of investors and did not make any monetary benefit or gain; (iv) had the Appellants taken steps as postulated by SEBI, there would have been a substantial monetary loss and harm

Subjects

Mutual fundsSEBI regulationsRegulatory breachMarket integrityPenaltyDue diligenceClose‑ended schemesRolloverDisclosureInvestor protectionSenior executive liability

Judgment

[2026] 8 S.C.R. 160 : 2026 INSC 681

Mr. Nilesh Shah & Ors.
v.
Securities and Exchange Board of India & Anr.
(Civil Appeal No. 6529 of 2026)
13 July 2026
[Dipankar Datta* and Satish Chandra Sharma, JJ.]

Issue for Consideration
Whether, in the facts and circumstances, there could be any
breach or violation of SEBI (Mutual Funds) Regulations, 1996
where, as contended by the appellants: (i) the actions complained
about did not result in any loss or harm to the investing public;
(ii) the actions of the Appellants resulted in gain to the investors;
(iii) all three sets of Appellants acted bona fide in the interest of
investors and did not make any monetary benefit or gain; (iv) had
the Appellants taken steps as postulated by SEBI, there would
have been a substantial monetary loss and harm to investors in
the range of Rs.376.05 crores.

Headnotes†
Securities and Exchange Board of India Act, 1992 – SEBI
(Mutual Funds) Regulations, 1996 – Violation of, when – Market
integrity paramount, profit or loss to investors immaterial to
determine whether a regulatory infraction occurred – Kotak
Mahindra Mutual Fund launched 6 close ended schemes
(a scheme having a fixed maturity period) between 2013 and
2016 which were to mature in or around April/May 2019 –
Rs.266 crore (out of Rs. 1625 crore) collected under the said
Schemes was invested in debt securities, i.e., Zero Coupon
Non-Convertible Debentures (ZCNCDs) issued by ESSEL
group of companies and were backed by a pledge over 22.8%
shares of Zee Entertainment Enterprises Limited (ZEEL) –
Drop in the share value of ZEEL, resulting in the security
cover to drop below 1.5 times the exposure – Kotak Mahindra
Asset Management Company Limited (Kotak AMC) agreed
with other lenders of ZEEL for restructuring the redemption
of the ZCNDCs and maturity dates of ZCNCDs were extended

* Author
[2026] 8 S.C.R. 161

Mr. Nilesh Shah & Ors. v.
Securities and Exchange Board of India & Anr.

beyond the maturity dates of the Schemes – The 6 Schemes
matured and ideally, the entire amount therein should have
been paid to the unitholders as per the scheme document
however, a part of the amount was withheld and was paid
only subsequently – Show Cause Notice issued by SEBI
to Kotak AMC – Order passed by the Whole Time Member,
SEBI inter alia imposing penalties of Rs.50,00,000/- on Kotak
AMC for lack of due diligence and care while investing in
ESSEL Group Companies; extension of maturity dates of
the ZCNCDs; and inadequate disclosures to the investors
and to SEBI – Adjudicating Officer levied penalties on Kotak
TRUSTEE and its senior executives – Appeals thereagainst,
partly allowed by Tribunal – Challenge to – Plea of Kotak
AMC inter alia is that its act of extending the maturity dates
of ZCNCDS beyond the maturity dates of the Schemes and
consequential partial redemption of the Schemes by winding
them up much after the maturity dates did neither cause any
loss to the unitholders nor did anyone complain rather, it
only resulted in profits to the unitholders:
Held: The contention that no loss was caused to the investors/
unitholders and, on the contrary, they gained and, hence, action
should not have been taken is no defence at all – The 1996
Regulations make no distinction between a breach resulting in
profit and a violation resulting in loss – Breaches of the regulatory
framework, fortuitously, could ultimately result in gain but excusing
a breach which led to profit is likely to incentivize the next breach –
Progression from profit to greed, from greed to regulatory breach
and from breach to systemic failure is not too unfamiliar – Market
integrity being the paramount consideration, profit or loss to
investors is immaterial to determine whether a regulatory infraction
has occurred – A wrongdoer cannot be allowed to use the plea
of the investors having gained, notwithstanding the violation, as
a shield for evading penalty – The 1996 Regulations operate
in a specific field: to ensure compliance – Variable scenarios
of violation is not contemplated – The ordinary intent behind
investments in mutual funds is stability and security coupled with
profits – Kotak AMC having represented to the unitholders, who
invested in the Schemes, that their investment would be for a
fixed term and that the returns would be credited to them on the
maturity dates or soon thereafter, it is a roll over in the manner
ordained, as noticed, that could have saved it from breach –
162 [2026] 8 S.C.R.

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Since no notification of a proposed roll over was made to the
unitholders as well as to SEBI, there was no roll over – The
breach is brazen and indefensible – Also, the argument that
taking of steps as postulated by the regulatory mechanism would
have resulted in loss to the investors and that was sought to be
averted, is wholly opposed to the very scheme of the securities
law – The course adopted by Kotak AMC was wholly unknown
to, and irreconcilable with, the legislative scheme enacted under
the SEBI Act – It departed from the carefully calibrated framework
established under the SEBI Act by not winding up the Schemes
on the respective dates of maturity, thereby inviting penalty – Any
breach committed to avert loss in the given circumstances does
not find favour in law – Compliance with the regulatory mechanism
being mandatory and non-negotiable, it is no valid defence that
compliance with law would have resulted in loss – All three parties,
viz. Kotak AMC, Kotak Trustee and the Senior Executives failed
to ensure compliance with the 1996 Regulations – No scope
for grant of any relief on merits – Appeals of Kotak AMC, Kotak
Trustee and the Senior Executives dismissed – Kotak AMC and
Kotak Trustee will, however, bear costs assessed at Rs.30 lakh
and 20 lakh, respectively. [Paras 32-34, 42, 52, 53]

SEBI (Mutual Funds) Regulations, 1996 – rr.33(4), 39 –
Violation of – Extension of maturity dates of the ZCNCDs;
inadequate disclosures to the investors and SEBI:
Held: Regulation 33(4) casts a statutory duty of information
being provided to the unitholders and SEBI – Regulation 39,
dealing with winding up of a close-ended scheme, provides in
sub-regulation (1) that a close-ended scheme shall be wound up
on the expiry of duration fixed in the scheme on the redemption
of the units unless it is rolled over for a further period under
sub-regulation (4) of regulation 33 – The first scheme to mature
was FMP Series 127 on 08.04.2019 – Regulation 33(4) r/w
regulation 39 of the 1996 Regulations, in its plain language, lays
down what was required of the appellants – The only exception
provided by the regulations is, if the scheme is rolled over –
Admittedly, this was not done – Neither is that the contention
of the appellants – The unitholders and SEBI were kept in the
dark – Statutory violation of this nature has to be strictly viewed –
After the entire operation, right from the decision to extend the
ZCNCDs to the execution of agreements inter alia with KONTI and
[2026] 8 S.C.R. 163

Mr. Nilesh Shah & Ors. v.
Securities and Exchange Board of India & Anr.

EDISON, the decision not to invoke pledge, and several others,
none of this was ever intimated to SEBI till SEBI knocked on
KOTAK AMC’s doors – It was imperative for Kotak AMC, at the
very least, to apprise SEBI being the regulator, of the proposed
action when the action itself was not in consonance with the
regulations – All three parties, viz. Kotak AMC, Kotak Trustee
and the Senior Executives failed to ensure compliance with the
1996 Regulations. [Paras 24, 25, 38, 39, 40, 42]

Securities and Exchange Board of India Act, 1992 – SEBI
(Mutual Funds) Regulations, 1996 – Contention of Kotak AMC
that it was not the only fund which had invested in ESSEL
securities – Several mutual funds in the market had also
invested in ESSEL securities and without acting against the
other market participants, SEBI has singled Kotak AMC out
for action which is wholly arbitrary and incorrect:
Held: Contention rejected, as has been rightly done by the Whole
Time Member and the Tribunal – Apart from the established
principle that negative equality cannot be claimed, there is
ex facie violation of the 1996 Regulations – Kotak AMC can
neither seek shelter under the alleged violations of others to
justify its own breach nor would existence of other violations,
if at all, absolve Kotak AMC of its own liability – Illegality is not
cured by numbers; a collective wrong remains illegal, regardless
of majority. [Para 28]

Circular – Securities and Exchange Board of India Act,
1992 – SEBI (Mutual Funds) Regulations, 1996 – Kotak AMC
contended that a circular issued by SEBI dtd.28.12.2018 which
permits creation of a segregated portfolio would enure to
its benefit – It was contended that despite non-invocation
of the 2018 circular, the action of partial redemption would
be saved thereby:
Held: This is in stark contrast with the stance adopted by
Kotak AMC before the Whole Time Member (WTM) – It was
their specific stand before the WTM and in its replies to the
Show Cause Notices, that the act of partial winding up cannot
amount to creation of a segregated portfolio – The WTM held
that the division of portfolios in part amounted to segregation
but the same being a technical violation, it was not proceeded
further – However, before this Court, Kotak AMC contended that
164 [2026] 8 S.C.R.

Supreme Court Reports

albeit without following the procedure under the 2018 Circular, it
acted in accordance with it and thus, no violation of regulation
33 of the 1996 Regulations can be attributed to it – Once Kotak
AMC claimed that it in fact did not segregate the portfolio, the
question of claiming benefit thereof, by any stretch of imagination,
cannot arise – To claim segregation, Kotak AMC would have had
to scrupulously follow the procedure under the 2018 Circular,
clause 3 of which mandates that a provision therefor must be
made in the Scheme Information Documents (SID) – The WTM
held that there was no provision in the SID for Kotak AMC to
undertake such a course – That apart, the procedure under
the 2018 Circular, such as issuance of press release, trustee
approval, intimation to unitholders, allotment of segregated units,
etc. was not followed – It is, admittedly, not Kotak AMC’s case
that this was done. [Paras 36, 37]

Financial and Technical Matters – Findings of Expert
Regulator – No challenge to:
Held: In cases of financial and technical matters, the line of thinking
adopted by the expert regulator, if found reasonable, cogent, and
in consonance with the established principles of law, may not be
lightly departed from – Given that the WTM duly considered all
the relevant factors, its reasoning deserves deference. [Para 17]

Securities and Exchange Board of India Act, 1992 – SEBI
(Mutual Funds) Regulations, 1996 – Violation of – Penalty
imposed upon Senior Executives – Waiver of, when not
warranted – It was contended on behalf of Senior Executives,
that while a beneficial outcome cannot justify a regulatory
infraction, the absence of investor prejudice may be
considered a mitigating factor for waiving penalty:
Held: The conduct of the Senior Executives is material – They
are supposed to be individuals who are domain experts, being
well-versed in the field of securities law – It is unimaginable
that they were not aware of the consequences of infraction
of the regulatory framework – Future of the unitholders was
put to immense risk by them – In matters such as this, where
the margin for error is virtually non-existent, the conduct of
the Senior Executives treads beyond condonable limits and,
consequently, disentitles them even to any interference with the
penalty imposed – Waiver. [Para 51]
[2026] 8 S.C.R. 165

Mr. Nilesh Shah & Ors. v.
Securities and Exchange Board of India & Anr.

Securities and Exchange Board of India Act, 1992 – SEBI
(Mutual Funds) Regulations, 1996 – Violation of – Committing
a breach to save investors, no justification for deviation from
the regulatory mandate and does not absolve liability – Plea
on behalf of Kotak AMC inter alia is that taking of steps as
postulated by the regulatory mechanism would have resulted
in loss to the investors and that was sought to be averted
and; its act of extending the maturity dates of ZCNCDS
beyond the maturity dates of the Schemes and consequential
partial redemption of the Schemes by winding them up
much after the maturity dates did neither cause any loss to
the unitholders nor did anyone complain and rather, it only
resulted in profits to the unitholders:
Held: Taking of steps as postulated by the regulatory mechanism
would have resulted in loss to the investors and that was sought to
be averted is wholly opposed to the very scheme of the securities
law – Those interested to invest in mutual funds are put on guard
from the very inception with regard to the likely risks involved –
The ‘Risk Disclosure Statement’ and the ‘Due Diligence Advisory’,
comprise the ‘Statutory Disclaimer’ – Those willing to invest in
mutual funds despite such disclaimer do so at their own risk and
peril – Committing a breach to save such investors is no justification
for deviation from the regulatory mandate and does not absolve
liability – The statutory scheme is consequence-neutral and the
regulatory regime has been designed to enforce compliance,
irrespective of the outcome – In any event, in an appeal u/s.15Z,
this Court is not to sit in judgment over the expediency of the
breach, the pecuniary consequence of the breach and the absence
of complaints – Commission of breach having practically stood
admitted and established, any justification by referring to investor
satisfaction and/or absence of complaint would not provide any
immunity to the appellants. [Para 34]

Case Law Cited
Chairman, SEBI v. Shriram Mutual Fund [2006] 2 SCR 833 :
(2006) 5 SCC 361 – referred to.

List of Acts
Securities and Exchange Board of India Act, 1992; SEBI (Mutual
Funds) Regulations, 1996.
166 [2026] 8 S.C.R.

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List of Keywords
Mutual funds; Investments in mutual funds; Kotak Mahindra
Mutual Fund; Kotak MF; Kotak Mahindra Asset Management
Company Limited; Kotak AMC; Close ended schemes; Scheme
having fixed maturity period; Zero Coupon Non-Convertible
Debentures (ZCNCDs); ESSEL group of companies; Pledged
shares; Backed by pledge shares; Zee Entertainment Enterprises
Limited (ZEEL); Drop in share value; Security cover dropped;
Restructuring the redemption of the ZCNDCs; Maturity dates of
ZCNCDs extended beyond the maturity dates of the Schemes;
Close ended schemes matured; Penalties imposed on Kotak
AMC; Lack of due diligence and care while investing; Extension
of maturity dates of ZCNCDs; Inadequate disclosures to investors
and SEBI; Breaches of regulatory framework; Market integrity
paramount consideration; Profit or loss to investors immaterial;
Regulatory infraction; No roll over; Pledge not invoked; No loss
to unitholders; No loss caused to investors; Kotak Mahindra
Trustee Company Limited; Senior executives/fund managers;
Kotak Trustee; Violation of SEBI (Mutual Funds) Regulations,
1996; Unitholders kept in dark; SEBI kept in dark; Statutory
violation; Financial and Technical Matters; Findings of Expert
Regulator; Segregated portfolio; Scheme Information Documents
(SID); Waiver of penalty; Negative equality; Violation of statutory
duties; Liable to regulatory action/penalty.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6529 of 2026
From the Judgment and Order dated 06.03.2026 of the Securities
Appellate Tribunal, Mumbai in AN No. 527 of 2022
With
Civil Appeal No(s). 4681 and 6527 of 2026

Appearances for Parties
Advs. for the Appellant(s):
Shyam Divan, Mukul Rohatgi, Sr. Advs., Mahesh Agarwal, Ankur
Saigal, Ashwath Rau, Ms. S. Lakshmi Iyer, Ms. Deepsikha
Mishra, Kashish Bhatia, Ms. Anushree Kapooria, Ms. Aditi Shukla,
Ritish Desai, Ms. Dishti Kaji, Ankur Singhal, Anshula L Bakhru,
E. C. Agrawala, Mahesh Agarwal, Ankur Saigal, Ashwath Rau,
[2026] 8 S.C.R. 167

Mr. Nilesh Shah & Ors. v.
Securities and Exchange Board of India & Anr.

Ms. S. Lakshmi Iyer, Ms. Deepsikha Mishra, Kashish Bhatia,
Ms. Anushree Kapooria, Ms. Aditi Shukla, Ritish Desai, Ms. Dishti
Kaji, E. C. Agrawala.
Advs. for the Respondent(s):
N. Venkataraman, A.S.G., Amarjit Singh Bedi, Ms. Surekha
Raman, Sidharth Nair, Harshit Singh, Yashwant Sanjenbam,
M/s. K J John And Co..

Judgment / Order of the Supreme Court

Judgment

Dipankar Datta, J.

“Mutual fund investments are subject to market risks,
read all scheme-related documents CAREFULLY.”
1. An average Indian is more than familiar with this unmistakable
phrase. Brandished at most noticeable places, it cautions potential
investors of the likely risks of investment in mutual funds. The present
appeals deal with one such risky scenario ostensibly created by
the appellants.

The Appeal
2. The appeals, under Section 15Z of the Securities and Exchange
Board of India Act, 19921, are directed against a common judgment
and order2 of the Securities Appellate Tribunal3 dated 6th March,
2026, disposing of two appeals4. Appeal No. 654 of 2021 was the
instance of Kotak Mahindra Asset Management Company Limited5,
assailing an order dated 27 th August 2021 of the Whole Time
Member6 of the Securities and Exchange Board of India7 whereas, the
appellants in Appeal No. 527 of 2022 were Kotak Mahindra Trustee

1 SEBI Act
2 impugned order
3 Tribunal
4 Appeal No.654 of 2021 and Appeal No.527 of 2021
5 Kotak AMC
6 WTM or Member, used interchangeably
7 SEBI
168 [2026] 8 S.C.R.

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Company Limited8 and its employees/officers/senior executives/fund
managers9, collectively, wherein they assailed an order dated 30th
June, 2022 passed by the Adjudicating Officer10, SEBI.

Genesis of the Lis
3. The facts, shorn of unnecessary details, are:
a. A mutual fund by the name of Kotak Mahindra Mutual Fund11
was sponsored by Kotak Mahindra Bank Limited12. The funds
thereof were held by Kotak Trustee in a fiduciary capacity.
K otak T rustee appointed K otak AMC (a wholly owned
subsidiary of Kotak Bank) as the asset management company
to manage the funds of Kotak MF.
b. Kotak MF launched 6 close ended schemes13 (a scheme
having a fixed maturity period) between 2013 and 2016 which
were to mature in or around April/May 201914. Accordingly,
Kotak AMC was to invest only in such securities which would
mature on or before the date of the maturity of the scheme15.
The Schemes were regulated by the SEBI (Mutual Funds)
Regulations, 199616. As per the 1996 Regulations, the scheme
must be wound up at the end of the maturity period.
c. An amount of Rs. 266 crore (out of Rs. 1625 crore) collected
under the said Schemes was invested in debt securities, i.e.,
Zero Coupon Non-Convertible Debentures17 issued by Konti
Infrapower & Multiventures Private Limited18 and Edison

8 Kotak Trustee
9 Nilesh Shah; Lakshmi Iyer; Deepak Agarwal; Jolly Bhatt; Abhishek Bisen; Gaurang Shah (collectively,
Senior Executives)
10 AO
11 Kotak MF or Kotak Mutual Fund, used interchangeably
12 Kotak Bank
13 FMP series nos. 127, 183, 187, 189, 193 and 194; collectively referred as ‘Schemes’
14 FMP Series 127 had maturity date of 8th April, 2019, FMP Series 183 had maturity date of 10th April, 2019;
FMP Series 187 had maturity date of 15th April, 2019; FMP Series 189 had maturity date of 22nd April,
2019; FMP Series 193 had maturity date of 2nd May, 2019; FMP Series 194 had maturity date of 15th May,
2019.
15 see: Circular SEBI/IMD/CIR No. 12/147132/08 dated 11th December, 2008
16 1996 Regulations
17 ZCNCDs
18 Konti
[2026] 8 S.C.R. 169

Mr. Nilesh Shah & Ors. v.
Securities and Exchange Board of India & Anr.

Utility Works Private Limited19 (parts of the ESSEL group of
companies20). These investments were backed by a pledge
over 22.8% shares of Zee Entertainment Enterprises Limited21,
which were owned by Cyquator Media Services Private
Limited22. Amount of the shares pledged by Cyquator was to
the extent of 1.5 times of the exposure amount, which was
to be topped up by Cyquator by giving additional security
(additional shares or otherwise) in case of drop in share cover
below 1.5 times.
d. The ZCNCDs were to mature on 8th April, 2019, which was
on the maturity date of one of the 6 Schemes and prior to
maturity of the remaining 5.
e. On 13th November, 2018, Zeel made a public disclosure
expressing its intent to divest 50% of its shareholding. This,
along with invocation of pledge by other lenders of Zeel,
caused a drop in the share value of Zeel, resulting in the
security cover to drop below 1.5 times the exposure. In view
of this drop, notices were issued by the debenture trustee
(IDBI Trustee) to Konti, Edison and Cyquator on 25th January,
2019, to create a security over more shares, so that the cover
can be increased back to 1.5 times or to deposit additional
money. This, admittedly, was not done.
f. On 26th January, 2019, a meeting was held by the promoters
of Zeel and its lenders, of which representatives of Kotak MF
were also a part. In this meeting, promoters of Zeel expressed
unwillingness to provide further shares or deposit additional
money and requested for a moratorium.
g. At this juncture, Kotak AMC claims to have had 2 options: first,
to sell the shares of Zeel pledged against the ZCNCDs, or
second, to agree with other lenders of Zeel for restructuring
the redemption of the ZCNDCs. It chose the latter. This
decision, Kotak AMC claims, was to ensure that there was
no further drop in the share price of Zeel, which would impact

19 Edison
20 Essel
21 Zeel
22 Cyquator
170 [2026] 8 S.C.R.

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other lenders and mutual funds. On 28th January, 2019, Kotak
Trustee was informed of this decision, to which it concurred.
It advised Kotak AMC to obtain a personal guarantee from
the promoter.
h. On 5th April, 2019, Kotak AMC addressed emails to the
unitholders of the Schemes, making them aware of the
developments that had occurred. The emails are, however,
not on record.
i. On the very next date, i.e. 6th April, 2019, Kotak AMC, Konti,
Edison, Cyquator, and a promoter of Zeel entered into several
multilateral agreements and deeds of guarantee.
j. On 8th and 10th April, 2019, 223 of the 6 Schemes matured.
Ideally, the entire amount in those Schemes should have
been paid to the unitholders as per the scheme document.
However, a part of the amount (about 10-21%) which was
invested in Konti and Edison was withheld. Soon thereafter,
the remaining 4 schemes24 also attained maturity. A portion
of the amount due was withheld in this case as well. In a
chart tendered during the hearing before us, it is shown
that an amount of about Rs. 376 crore was paid after the
maturity dates of the Schemes out of the total payable of
about Rs. 2116 crore.
k. On 11th April, 2019, SEBI wrote to Kotak AMC inquiring
the manner in which the first two schemes were wound up
and whether the same was in consonance with the 1996
Regulations. Kotak AMC promptly responded to this letter
the very next day, i.e., on 12th April, 2019 denying violation of
the 1996 Regulations. Contemporaneously, Kotak AMC wrote
letters to the investors explaining its action and assuring that
the remaining monies would be paid soon, in due course.
l. On 10th May, 2019, SEBI issued a Show Cause Notice25 to
Kotak AMC. It was required to show cause why directions
under section 11(1) read with 11(B) of the SEBI Act should

23 FMP Series 127 and 183
24 FMP Series 187, 189, 193, and 194
25 SCN
[2026] 8 S.C.R. 171

Mr. Nilesh Shah & Ors. v.
Securities and Exchange Board of India & Anr.

not be issued. A supplementary SCN and a subsequent SCN
was also issued. SCNs were also issued to Kotak Trustee
and its senior executives.
m. On 25th September, 2019, all the monies concerning the
Schemes were paid to the unitholders. An update thereof was
also sent to the unitholders.
n. Pursuant to the SCNs being issued to Kotak AMC, Kotak
Trustee and its Senior Executives, replies, submissions, and
personal hearing followed. An order was passed by the WTM
on 27th August, 2021 levying penalties on Kotak AMC in the
following terms:
127.1. The Noticee shall refund a part of the
investment management and advisory fees
collected from the unitholders of the six FMP
schemes, equivalent to the percentage of exposure
to the ZCNCDs of the Issuers in the respective
schemes as on the date of maturity of the six
FMP schemes, along with a simple interest at
the rate of 15% per annum from the date of
maturity of such schemes till the date of actual
payment to the respective unitholders of the said
schemes. The Noticee is also directed to submit a
compliance report to The Division Chief, Investment
Management Department-1, Division of Funds-2,
Securities and Exchange Board of India, mentioning
therein the details of such payments made to the
unitholders of the six FMP schemes. The Noticee
is directed to complete the exercise of payment of
funds to the respective unitholders and submission
of compliance report to the abovementioned
authority within a period of 45 days from the date
of this order.
127.2. Further, I impose a Monetary penalties of
INR 50,00,000 (Rupees Fifty Lakhs only/-) on the
Noticee under the provisions of Sections 15D(b)
and 15 HB for the violations of the provisions of
SEBI Act, 1992, MF Regulations, 1996 as well as
various circulars discussed in the present order.
172 [2026] 8 S.C.R.

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127.3. The Noticee is also restrained from launching
any new FMP scheme for a period of six months
from the date of this order.
o. Similarly, on 30th June, 2022 the Adjudicating Officer levied
penalties on Kotak Trustee and its senior executives in the
following terms:

Noticee Penal Provisions Penalty (Rs.)
Noticee 1 Section 15D(b) and Rs. 40,00,000/-
(Kotak Mahindra Trustee 15HB of SEBI Act (Rupees Forty
Company Limited) Lakh Only)
Noticee 2 Section 15HB of Rs. 30,00,000/-
(Mr. Nilesh Shah) SEBI Act (Rupees Thirty
Lakh Only)
Noticee 3 Section 15HB of Rs. 25,00,000/-
(Ms. Lakshmi Iyer) SEBI Act (Rupees Twenty
Five Lakh Only)
Noticee 4 Section 15HB of Rs. 20,00,000/-
(Mr. Deepak Agarwal) SEBI Act (Rupees Twenty
Five Lakh Only)
Noticee 5 Section 15HB of Rs. 10,00,000/-
(Ms. Jolly Bhatt) SEBI Act (Rupees Ten Lakh
Only)
Noticee 6 Section 15HB of Rs. 15,00,000/-
(Mr. Abhishek Bisen) SEBI Act (Rupees Fifteen
Lakh Only)
Noticee 7 Section 15HB of Rs. 20,00,000/-
(Mr. Gaurang Shah) SEBI Act (Rupees Twenty
Lakh Only)

p. Both the orders, viz. the order passed by the WTM and the
Adjudicating Authority or AO were carried in appeal before
the Tribunal as mentioned above. The Tribunal, while partly
allowing the appeals vide the impugned order, held as under:
i. Appeal No. 654 of 2021 is allowed in part. Direction
with regard to disgorgement of investment management
and advisory fee in paragraph 127.1 of the impugned
order is set aside.
ii. Appeal No. 527 of 2022 is dismissed.
[2026] 8 S.C.R. 173

Mr. Nilesh Shah & Ors. v.
Securities and Exchange Board of India & Anr.

iii. Pending interlocutory application(s), if any, stands
disposed of. No costs.
(emphasis in original)
q. Appellants are now in appeal before us against the impugned
order.

Analysis
4. Section 15Z of the SEBI Act permits an appeal to be carried to this
Court from any decision or order of the Tribunal on any substantial
question of law arising out of such order.
5. We have heard Mr. Mukul Rohatgi, learned senior counsel appearing
for Kotak AMC, Mr. Shyam Diwan, learned senior counsel appearing
for Kotak Trustee and its Senior Executives, and Mr. N. Venkatraman,
learned Additional Solicitor General appearing for SEBI. We have
also perused the submissions filed on behalf of the parties.
6. We begin by examining the substantial question(s) of law proposed
by the appellants in the appeal as well as during the hearing before
us. Amongst others, the appellants would beseech us to examine
whether the actions of Kotak AMC taken in good faith could be
held as violation of statutory duties or liable to regulatory action/
penalty, when such action did not cause loss to the unitholders. All
other question(s) flow therefrom. The primary question so framed,
reads as follows:
Whether, in the facts and circumstances, there could
be any breach or violation of SEBI (Mutual Funds)
Regulations, 1996 where: (i) The actions complained
about did not result in any loss or harm to the investing
public; (ii) The actions of the Appellants resulted in gain
to the investors; (iii) All three sets of Appellants acted
bona fide in the interest of investors and did not make
any monetary benefit or gain; (iv) Had the Appellants
taken steps as postulated by SEBI, there would have
been a substantial monetary loss and harm to investors
in the range of Rs. 376.05 crores.
7. We preface our consideration of the above question by observing
that though the Supreme Court is the highest court of the land as
ordained by the Constitution of India, this Court is neither expected
174 [2026] 8 S.C.R.

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to nor can it pronounce on the economics of the securities market. Its
role as an appellate court under Section 15Z is limited to answering
substantial questions of law. The commercial wisdom behind a
decision to take a bona fide risk which unfortunately results in loss
or a (conscious) breach of the regulatory framework fortuitously
resulting in gain to the investors is beyond the pale of appellate
scrutiny of this Court under Section 15Z. It has to be borne in mind
that the statutory scheme is consequence-neutral and the regulatory
regime has been designed to enforce compliance, irrespective of
the outcome. Needless to observe, absent manifest absurdity in the
findings, this Court ought not to and would not interfere.
8. We draw guidance from the decision of this Court in Chairman,
SEBI v. Shriram Mutual Fund26 in this regard. There, this Court in
course of deciding an appeal under Section 15Z, SEBI Act was called
upon to answer, inter alia, the question of law as to whether once it
is conclusively established that a mutual fund has violated the terms
of the certificate of registration and the statutory regulations, i.e., the
1996 Regulations, the imposition of penalty becomes a sine qua non
of the violation. The question was answered in the following terms:
35. In our considered opinion, penalty is attracted as
soon as the contravention of the statutory obligation
as contemplated by the Act and the Regulations is
established and hence the intention of the parties
committing such violation becomes wholly irrelevant. A
breach of civil obligation which attracts penalty in the
nature of fine under the provisions of the Act and the
Regulations would immediately attract the levy of penalty
irrespective of the fact whether contravention must be
made by the defaulter with guilty intention or not. We
also further held that unless the language of the statute
indicates the need to establish the presence of mens
rea, it is wholly unnecessary to ascertain whether such
a violation was intentional or not. On a careful perusal
of Section 15-D(b) and Section 15-E of the Act, there is
nothing which requires that mens rea must be proved
before penalty can be imposed under these provisions.

26 (2006) 5 SCC 361
[2026] 8 S.C.R. 175

Mr. Nilesh Shah & Ors. v.
Securities and Exchange Board of India & Anr.

Hence once the contravention is established then the
penalty is to follow.
9. Ergo, once a breach of the SEBI Act and the regulations framed
thereunder is established followed by regulatory action/imposition
of penalty, as in these appeals, the only defence available to the
appellants would be to demonstrate that no breach occurred at all
and the decision/order of the Tribunal holding to the contrary is
manifestly perverse. Nothing else will suffice.
10. Turning to the crux of the appeals, we find that the primary
allegations of SEBI against Kotak AMC, Kotak Trustee and its
Senior Executives were:
A. Lack of due diligence while investing in E ssel Group
Companies;
B. Extension of maturity dates of the ZCNCDs; and
C. Inadequate disclosures to the investors and to SEBI.

A. Lack of due diligence while investing in Essel Group of
Companies
11. SEBI alleged that the investment made by Kotak AMC in the
ZCNCDs issued by Konti and Edison was without due diligence
and proper care, and lacked a high standard of service. The WTM
of SEBI observed, on a perusal of the papers before it, that the
rationale behind investment in ZCNCDs issued by Konti and Edison
was not the financial health of those companies itself but the fact
that the investment was backed by shares of Zeel to the extent
of 1.5 times the exposure. Referring to the financial statements of
Konti and Edison placed by Kotak AMC before it, the WTM noted
that the consistent losses incurred by Konti and Edison were ‘…
quite alarming enough for any lender/investor to avoid investing
any funds into the debt securities of these companies…’. Despite
having knowledge of these facts, the Investment Committee chose
to invest in the ZCNCDs.
12. Apart from these facts, the WTM also made a reference to a
circular dated 1st October, 201927 which mandates that investment

27 SEBI/HO/IMD/DE2/CIR/P/2019/104
176 [2026] 8 S.C.R.

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in debt instruments, having credit enhancements backed by equity
shares directly or indirectly, shall have a minimum cover of 4 times
considering the market value of such shares. Admittedly, there was
no such compliance.
13. These are, among others, the reasons which led the WTM to hold
that Kotak AMC failed to exercise due diligence and care.
14. Kotak AMC defended by stating that the ZCNCDs were a structured
obligation, hence, it did not give due consideration to the cash flow
statement and made investment based on the reputation of Essel
Group, repayment history of the group, and strength of collateral
of shares of Zeel. It also contended that apart from Kotak AMC,
22 other persons including 8 other mutual funds invested in Essel
Group. This appears to be Kotak AMC’s consistent stance across
the documents, viz. in the appeals and submissions filed before the
Tribunal as well as before us.
15. What cannot be denied is the finding by the WTM which is: “Thus,
the internal approval note of the IC itself very strangely suggests that
the IC of the Noticee was not aware about the issuer entity even on
the date of approving the proposal to invest in the ZCNCDs of the
Issuers.” It also records: “…The due diligence documents presented
before me do not indicate that the Noticee has ever attempted to
analyse various risk parameters, viz: credit risk, liquidity risk and
interest rate risk etc. while evaluating the proposal to invest in the
ZCNCDs of certain insignificant and financially handicapped entities
of Essel Group such as Konti and Edison”.
16. There has been no challenge, far less serious challenge, to these
findings.
17. It is trite that in cases of financial and technical matters, the line of
thinking adopted by the expert regulator, if found reasonable, cogent,
and in consonance with the established principles of law, may not
be lightly departed from. Given that the WTM has duly considered
all the relevant factors, its reasoning deserves deference.
18. Additionally, regulation 25(16) read with the Fifth Schedule of the 1996
Regulations demands due diligence. The focus should, therefore,
have been on diligence, not dividends. Having faltered, the appellants
have to bear the consequences. We, therefore, see no reason to
agree with the contention that there was no lack of due diligence.
[2026] 8 S.C.R. 177

Mr. Nilesh Shah & Ors. v.
Securities and Exchange Board of India & Anr.

19. The WTM’s order, since affirmed by the Tribunal, is cogent and
commends itself for acceptance. The contentions of Kotak AMC,
thus, stand rejected.

B. Extension of maturity dates of the ZCNCDs
20. This forms the core issue of the dispute—the trigger which caused
SEBI to issue the SCNs and subsequent action that ensued against
the appellants.
21. Undoubtedly, the Schemes were close-ended schemes. What does
the 1996 Regulations provide in respect of close-ended schemes?
We need to read regulation 33 (to the extent relevant) and regulation
39 thereof for a better understanding of the issue.
22. Regulation 33 and 39 are part of Chapter V of the 1996 Regulations
titled ‘Schemes of Mutual Fund’.
23. Regulation 33 of the 1996 Regulations provides for repurchase of
Mutual Funds, with sub-rule (4) thereof ordaining as follows:
(4). A close ended scheme shall be fully redeemed at
the end of the maturity period.
Provided that a close-ended scheme may be allowed to
be rolled over if the purpose, period and other terms of
the roll over and all other material details of the scheme
including the likely composition of assets immediately
before the roll over, the net assets and net asset value
of the scheme, are disclosed to the unitholders and a
copy of the same has been filed with the Board:
Provided further that such roll over will be permitted
only in the case of those unitholders who express their
consent in writing and the unit holders who do not opt
for the roll over or have not given written consent shall
be allowed to redeem their holdings in full at net asset
value based price.
24. Regulation 39, dealing with winding up of a close-ended scheme,
provides in sub-regulation (1) that a close-ended scheme shall be
wound up on the expiry of duration fixed in the scheme on the
redemption of the units unless it is rolled over for a further period
under sub-regulation (4) of regulation 33.
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25. The first scheme to mature was FMP Series 127 on 8th April, 2019.
Regulation 33(4) read with regulation 39 of the 1996 Regulations, in
its plain language, lays down what was required of the appellants.
The only exception provided by the regulations is, if the scheme
is rolled over. This, admittedly, was not done. Neither is that the
contention of the appellants.
26. In fact, the contentions, to put it mildly, are surprisingly puerile.
27. First, the contention is, Kotak AMC was not the only fund which
had invested in Essel securities. Several mutual funds in the market
had also invested in Essel securities and without acting against
the other market participants, SEBI has singled Kotak AMC out for
action which is wholly arbitrary and incorrect.
28. This contention must be and is rejected in its entirety, as has been
rightly done by the WTM and the Tribunal. Apart from the established
principle that negative equality cannot be claimed, there is ex facie
violation of the 1996 Regulations. Kotak AMC can neither seek shelter
under the alleged violations of others to justify its own breach nor
would existence of other violations, if at all, absolve Kotak AMC of
its own liability. Illegality is not cured by numbers; a collective wrong
remains illegal, regardless of majority.
29. Secondly, the contention advanced on behalf of Kotak AMC is that its
act of extending the maturity dates of ZCNCDS beyond the maturity
dates of the Schemes and consequential partial redemption of the
Schemes by winding them up much after the maturity dates did
neither cause any loss to the unitholders nor did anyone complain.
On the contrary, goes the contention further, it only resulted in profits
to the unitholders.
30. We have no hesitation to reject this contention as well.
31. The approach proceeds on a fundamentally flawed premise. Instead
of claiming that there had been no breach of the SEBI Act and the
1996 Regulations, the appellants are seeking to justify the breach
on the ground that no investor suffered and no investor complained.
32. The contention that no loss was caused to the investors/unitholders
and, on the contrary, they gained and, hence, action should not
have been taken is no defence at all. The 1996 Regulations make
no distinction between a breach resulting in profit and a violation
[2026] 8 S.C.R. 179

Mr. Nilesh Shah & Ors. v.
Securities and Exchange Board of India & Anr.

resulting in loss. Neither do we. Breaches of the regulatory
framework, fortuitously, could ultimately result in gain but excusing
a breach which led to profit is likely to incentivize the next breach.
Progression from profit to greed, from greed to regulatory breach
and from breach to systemic failure is not too unfamiliar. Market
integrity being the paramount consideration, profit or loss to investors
is immaterial to determine whether a regulatory infraction has
occurred. A wrongdoer cannot be allowed to use the plea of the
investors having gained, notwithstanding the violation, as a shield
for evading penalty. The 1996 Regulations operate in a specific
field: to ensure compliance. Variable scenarios of violation is not
contemplated.
33. The ordinary intent behind investments in mutual funds is stability
and security coupled with profits. Kotak AMC having represented to
the unitholders, who invested in the Schemes, that their investment
would be for a fixed term and that the returns would be credited
to them on the maturity dates or soon thereafter, it is a roll over
in the manner ordained, as noticed, that could have saved it from
breach. Since no notification of a proposed roll over was made
to the unitholders as well as to SEBI, there was no roll over. The
breach is brazen and indefensible.
34. Also, the argument that taking of steps as postulated by the
regulatory mechanism would have resulted in loss to the investors
and that was sought to be averted, in our view, is wholly opposed
to the very scheme of the securities law. Those interested to invest
in mutual funds are put on guard from the very inception with
regard to the likely risks involved. The ‘Risk Disclosure Statement’
and the ‘Due Diligence Advisory’, as has been noticed at the
beginning of this judgment, comprise the ‘Statutory Disclaimer’.
Those willing to invest in mutual funds despite such disclaimer
do so at their own risk and peril. Committing a breach to save
such investors is no justification for deviation from the regulatory
mandate and does not absolve liability. The course adopted by
Kotak AMC was wholly unknown to, and irreconcilable with, the
legislative scheme enacted under the SEBI Act. It departed from
the carefully calibrated framework established under the SEBI Act
by not winding up the Schemes on the respective dates of maturity,
thereby inviting penalty. Any breach committed to avert loss in the
given circumstances does not find favour in law. Compliance with
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the regulatory mechanism being mandatory and non-negotiable, it
is no valid defence that compliance with law would have resulted
in loss.
35. In any event, in an appeal under Section 15Z, this Court is not to
sit in judgment over the expediency of the breach, the pecuniary
consequence of the breach and the absence of complaints.
Commission of breach having practically stood admitted and
established, any justification by referring to investor satisfaction
and/or absence of complaint would not provide any immunity to
the appellants.
36. Thirdly, in the submissions filed before us, Kotak AMC contended
that a circular issued by SEBI dated 28th December, 201828 would
enure to its benefit. The 2018 Circular permits creation of a
segregated portfolio. It was contended that despite non-invocation
of the 2018 circular, the action of partial redemption would be saved
thereby. Astonishingly, this is in stark contrast with the stance
adopted by Kotak AMC before the WTM. It was the specific stand
of Kotak AMC, before the WTM and in its replies to the SCNs,
that the act of partial winding up cannot amount to creation of a
segregated portfolio. The WTM held that the division of portfolios
in part amounted to segregation but the same being a technical
violation, it was not proceeded further. However, in the submissions
before us, Kotak AMC would contend that albeit without following
the procedure under the 2018 Circular, it acted in accordance with
it and thus, no violation of regulation 33 of the 1996 Regulations
can be attributed to it.
37. Once Kotak AMC claimed that it in fact did not segregate the
portfolio, the question of claiming benefit thereof, by any stretch of
imagination, cannot arise. To claim segregation, Kotak AMC would
have had to scrupulously follow the procedure under the 2018
Circular, clause 3 of which mandates that a provision therefor must
be made in the Scheme Information Documents29. The WTM held
that there was no provision in the SID for Kotak AMC to undertake
such a course. That apart, the procedure under the 2018 Circular,
such as issuance of press release, trustee approval, intimation to

28 SEBI/HO/IMD/DF2/CIR/P/2018/160 (referred as 2018 Circular)
29 SID
[2026] 8 S.C.R. 181

Mr. Nilesh Shah & Ors. v.
Securities and Exchange Board of India & Anr.

unitholders, allotment of segregated units, etc. was not followed.
It is, admittedly, not Kotak AMC’s case that this was done. Thus,
even on this ground, we hold against the appellants.

C. Inadequate disclosures to the investors and to SEBI
38. Regulation 33(4) casts a statutory duty of information being provided
to the unitholders and SEBI.
39. To avoid prolixity, we prefer not to repeat what has been discussed
above with regard to the unitholders and SEBI being kept in the
dark. Statutory violation of this nature has to be strictly viewed.
40. During the course of hearing, we posed a question to learned senior
counsel for Kotak AMC: when was SEBI, for the first time, informed
of the course of action adopted by Kotak AMC? The answer was: on
12th April, 2019, that is, in reply to SEBI’s letter seeking information
on the manner of winding up. This was a few days after the maturity
dates of FMP Series 127 and 183. Thus, after the entire operation,
right from the decision to extend the ZCNCDs to the execution
of agreements inter alia with Konti and Edison, the decision not
to invoke pledge, and several others, — none of this was ever
intimated to SEBI till SEBI knocked on Kotak AMC’s doors. It was
imperative for Kotak AMC, at the very least, to apprise SEBI being
the regulator, of the proposed action when the action itself was not
in consonance with the regulations.
41. Insofar as the investors are concerned, we pity them. Did they have
a choice not to accept the course of action adopted by Kotak AMC?
The conscious decision to extend the maturity dates of ZCNCDs
beyond the maturity dates of the Schemes was not a choice left
for the unitholders to elect. That was not a contingency, which they
could foresee. In an ideal scenario, the unitholders were assured that,
even in the event of a default on the debentures, their investments
would be protected through the realization of the pledged shares
serving as collateral —the very rationale underlying the creation
of security in the first place. Kotak AMC departed completely from
the proposed action. Trotting behind it was Kotak Trustee who
beelined the action instead of its independent assessment. As the
trustee company holding the funds of unitholders in a fiduciary
capacity, Kotak Trustee was bound to independently assess whether
the course was, first, in adherence with the extant regulations,
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and secondly, whether the course was in the interest of the
unitholders.
42. As held by the AO and upheld by the Tribunal, all three parties,
viz. Kotak AMC, Kotak Trustee and the Senior Executives failed
to ensure compliance with the 1996 Regulations. They adopted a
course unknown to law. No case for interference is, thus, set up by
any of the appellants.

On Conduct
43. Having observed as above, dismissal of the appeals is the only
available option for us. However, before we so order, there lies
something to be said beyond the facts of the matter itself.
44. Several crucial documents are not on the record, including the
Investment Committee notes for the Schemes in question. It is
not that placing these documents on record would have made
any difference to the outcome. However, these documents ought
to have been placed on record, particularly when the conduct of
Kotak AMC is in question, to show a bona fide approach. Curiously,
these documents were part of the appeal filed before the Tribunal
by all the appellants. We are not too impressed by the selective
non-disclosure.
45. Additionally, we wish to observe that during the hearing, a sheet of
paper was tendered across the Bar by learned senior counsel on
behalf of Kotak AMC. Such sheet purportedly contained extracts
from the relevant regulations, for the Court’s convenience and
understanding. The same document was also referred to and relied
upon by learned senior counsel on behalf of Kotak Trustee and its
Senior Executives during the course of arguments.
46. The one-pager tendered by learned senior counsel for Kotak AMC
reveals incomplete and inaccurate reference to the provisions
of the 1996 Regulations. For instance, reference was made to
sub-regulation (4) of regulation 33 in a truncated form without the two
provisos. Both, the proviso and the further proviso, are of significant
relevance to the present controversy; yet, both were omitted from
the said one-pager note. The omission could be deliberate; it
could also be a mistake. We say no more than is necessary. Such
omission, at times, could be viewed with suspicion by the Court.
[2026] 8 S.C.R. 183

Mr. Nilesh Shah & Ors. v.
Securities and Exchange Board of India & Anr.

We caution the appellants to be more vigilant in future and thereby
avert reoccurrence of such mistake.
47. Even otherwise, the manner in which the appellants have conducted
themselves throughout, while keeping the unitholders, SEBI and us
in the dark, meets our stern disapproval.
48. Thus, on merits, there is no scope for grant of any relief.
49. Penalty, imposed on Kotak AMC and Kotak Trustee, also calls for
no interference.
50. However, what remains for consideration is the quantum of penalty
imposed upon the Senior Executives. Learned senior counsel on
their behalf made a fervent appeal to waive the penalty. According to
him, while a beneficial outcome cannot justify a regulatory infraction,
the absence of investor prejudice may be considered a mitigating
factor for waiving penalty.
51. To consider this aspect, the conduct of the Senior Executives
becomes material. They are supposed to be individuals who are
domain experts, being well-versed in the field of securities law. It
is unimaginable that they were not aware of the consequences of
infraction of the regulatory framework. Future of the unitholders was
put to immense risk by them. In matters such as this, where the
margin for error is virtually non-existent, the conduct of the Senior
Executives treads beyond condonable limits and, consequently,
disentitles them even to any interference with the penalty imposed.

Order
52. In view of the aforesaid, the appeals do not deserve to be entertained;
thus, we dismiss the appeals of Kotak AMC, Kotak Trustee and
the Senior Executives.
53. Kotak AMC and Kotak Trustee will, however, bear costs assessed
at Rs. 30 lakh and 20 lakh, respectively.
54. The costs be deposited with the Secretary General of this Court
within two months.
55. Secretary General will identify ten accredited organisations, not
confined to Delhi but all over the country which are engaged in
activities for a substantial period, in caring, supporting and uplifting
the conditions of destitute children, children battling cancer, orphans,
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women in distress and victims of crime, mental patients - both
children and adult, elderly people with no family, individuals requiring
prosthetics, and the like; and ensure that the amounts received as
costs are distributed equally among them.
56. Pending applications, if any, shall also stand disposed of.

Mirror Disclaimer
57. We conclude by warning managers of AMCs/fund houses by coining
this phrase:
“MANDATE FIRST, GAINS LATER;
SEBI COMPLIANCE, NEVER FALTER.”

Result of the case: Appeals dismissed.

†
Headnotes prepared by: Divya Pandey