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CHAPTER V PENALTIES AND PROCEDURES Penalties 23. (1) Any person who- (a) without reasonable excuse (the burden of proving which shall be on him) fails to comply with any requisition made under sub- section (4) of section 6; or (b) enters into any contract in contravention of any of the provisions contained in section 13 or section 16; or (c) contravenes the provisions contained in section 17 or section 19; or (d) enters into any contract in derivative in contravention of section 18 A or the rules made under section 30.⁴⁴ (e) owns or keeps a place other than that of a recognised stock exchange which is used for the purpose of entering into or performing any contracts in contravention of any of the provisions of this Act and knowingly permits such place to be used for such purposes; or (f) manages, controls, or assists in keeping any place other than that of a recognised stock exchange which is used for the purpose of entering into or performing any contracts in contravention of any of the provisions of this Act or at which contracts are recorded or adjusted or rights or liabilities arising out of contracts are adjusted, regulated or enforced in any manner whatsoever; or (g) not being a member of a recognised stock exchange or his agent authorised as such under the rules or bye- laws of such stock exchange or not being a dealer in securities licensed under section 17 (h) not being a member of a recognised stock exchange or his agent authorised as such under the rules or bye- laws of such stock exchange or not being a dealer in securities licensed under section 17, canvasses, advertises or touts in any manner either for himself or on behalf of any other person for any business connected with contracts in contravention of any of the provisions of this Act; or (i) joins, gathers or assists in gathering at any place other than the place of business specified in the bye-laws of a recognised stock exchange any person or persons for making bids or offers or for entering into or performing any contracts in contravention of any of the provisions of this Act; shall, on conviction, be punishable with imprisonment for a term which may extend to one year, or with fine, or with both. (2) Any person who enters into any contract in contravention of the provisions contained in section 15 [or who fails to comply with the provisions of section 21 or with the orders of]⁴⁵ the Central Government under section 22 or with the orders of the Securities Appellate Tribunal shall,⁴⁶ on conviction, be punishable with fine which may extend to one thousand rupees. Offences by companies 24. (1) Where an offence has been committed by a company, every person who, at the time when the offence was committed, was incharge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any gross negligence on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer of the company, shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation: For the purpose of this section,- (a) "company" means any body corporate and includes a firm or other association of individuals, and (b) "director", in relation to - (i) a firm, means a partner in the firm; (ii) any association of persons or a body of individuals, means any member controlling the affairs thereof. ⁴⁷ [(3) The provisions of this section shall be in addition to, and not in derogation of, the provisions of section 22A].⁴⁸ Certain offences to be cognizable 25. Notwithstanding anything contained in the [Code of Criminal Procedure, 1898 (5 of 1898)],⁴⁹ any offence punishable under sub-section (1) of section 23, shall be deemed to be a cognizable offence within the meaning of that Code. Jurisdiction to try offences under this Act 26. No court inferior to that of a presidency magistrate or a magistrate of the first class shall take cognizance of or try any offence punishable under this Act. ⁴⁴Inserted by Securities Laws (Second Amendment) Act, 1999 vide Gazette Notification dated December 16, 1999. Clause (d) was earlier omitted by the Securities Laws (Amendment) Act, 1995, w.e.f. 25-1-1995. Prior to omission it read as under: "(d) enters into any option in securities in contravention of the provisions contained in section 20; or" wilfully represents to or induces any person to believe that contracts can be entered into or performed under this Act through him; or ⁴⁵Substituted for "or who fails to comply with the orders of the Securities and Exchange Board of India under section 21" by the Securities Laws (Amendment) Act, 1995, w.e.f.25-1-1995. ⁴⁶Inserted by the Securities Laws ( Second Amendment) Act,1999 vide Gazette Notification dated December 16, 1999 ⁴⁷Substituted by the Securities Laws ( Second Amendment) Act,1999 vide Gazette Notification dated December 16, 1999 for " (b) director , in relation to a firm, means a partner in the firm". ⁴⁸Inserted by the Securities Contracts (Regulation) Amendment Act, 1985. ⁴⁹Now Code of Criminal Procedure, 1973.