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    Question

    Under Section 23 of the Securities Contracts

    (Regulation) Act, 1956, any person who enters into any contract in contravention of the provisions of Section 13 (Contracts in notified areas illegal in certain cases) or Section 16 (Power to prohibit contracts in certain cases) shall, on conviction, be punishable with:
    A A fine which shall not be less than ₹10 Lakhs but may extend to ₹25 Crores. Correct Answer Incorrect Answer
    B Imprisonment for a term which may extend to 10 years, or with fine, or with both. Correct Answer Incorrect Answer
    C Imprisonment for a term which may extend to 1 year, or with fine, or with both. Correct Answer Incorrect Answer
    D A fine which may extend to ₹1 Crore only. Correct Answer Incorrect Answer
    E Imprisonment for a term which may extend to 2 years, or with fine, or with both. Correct Answer Incorrect Answer

    Solution

    This penalty is governed by Section 23(1) of the SCRA, 1956. 1. The Offence The section lists several contraventions that attract this specific punishment, including: • Entering into illegal contracts in notified areas (Section 13). • Entering into prohibited contracts (Section 16). • Owning or keeping a place for such illegal contracts. • Managing or assisting a body of persons (not being a recognized stock exchange) in the business of securities. 2. The Punishment (Section 23(1)) The Act states that any person convicted of these offences shall be punishable with: "Imprisonment for a term which may extend to ten years, or with fine, or with both."

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