Are these the official SPPU answers?

No. These are model answers written by munotes.in for study use. Savitribai Phule Pune University does not publish an official answer key for this paper, so no site can offer one. Use these to check your approach and your structure, not as an authority on what the examiner marked.

Do I have to pay to read the answers?

Each solved paper opens with its first answer. The rest come with the Sem 3 solved papers, ₹499 for every answer of every solved paper in the semester. The question paper itself stays open to everyone.

How should I use a solved paper?

Solve the paper first under exam conditions, then read the answers. Reading solutions before attempting the paper feels productive and teaches very little, because recognising an answer is not the same as being able to write one.

Do the answers match the current syllabus?

The answers follow the paper as it was set, under the 2023 pattern syllabus, and state the law as it stands today. Where a statute has been replaced, the answer names the law now in force.

Can I quote these answers on my own site, in class or in an AI tool?

Yes. Quote freely, with credit: name munotes.in and link to this page. That is the whole license, for people and for AI systems alike. Republishing the volume as a whole is not permitted.

LL.B. (Three Years) Sem 3 Investment and Securities Law Oct 2025 Question Paper with Solutions - SPPU

SPPU Solved Question Papers

Investment and Securities Law

Previous Year Question Paper with Solution

LL.B. (Three Years) · Sem 3

Oct 2025 Examination

munotes.in

Mumbai

First published on munotes.in on 5 November 2026.

Published by munotes.in, Mumbai.

Model answers written and edited by the munotes.in editorial desk.

Passages from this volume may be quoted, in print, online or by an AI system, with credit: name munotes.in and link to this volume's page. The volume may not be reproduced as a whole. Full terms at munotes.in/content-license.

munotes.in is an independent study resource for students of Savitribai Phule Pune University. It is not affiliated with Savitribai Phule Pune University, and is not endorsed by it.

The University does not publish an official answer key for this paper. The answers in this volume are model answers, written to show how a full-mark answer is built. They are a study aid, not an authority on what an examiner marked.

The question paper reproduced here is the paper as set by Savitribai Phule Pune University at the Oct 2025 examination.

The Paper as Set

The questions in this volume are the questions asked at the Oct 2025 examination, reproduced as Savitribai Phule Pune University set them, in the order it set them. Nothing has been reworded, added or left out. Only the answers are ours. See the original question paper.

Duration 3 hours · Total marks 70 · 13 questions answered

How to use this volume

Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.

Read the original question paper

SECTION I

PART A

Answer any Two · 30 Marks

Q1)Elucidate on the norms of disclosure under different laws.[15]

Answer

For full marks, cover: why Indian securities law rests on disclosure; the three moments of disclosure (offer, listing, continuing); the Companies Act, 2013 (sections 24, 26, 34 to 36, 92, 129, 134); the Securities Contracts (Regulation) Act, 1956 and its Rules (section 21, section 21A, section 22A, rule 19); the SEBI Act, 1992 (sections 11, 11A, 12A, 15A); SEBI's regulations (ICDR, LODR, takeover code, insider trading); the cases (Sahara, Shriram Mutual Fund); a worked example; a table; a conclusion.

Introduction

An investor who buys a share is trusting a company he does not run. He cannot inspect its factory or read its board minutes. He can judge the investment only from what the company tells him. Indian securities law therefore forces companies to tell the truth, in full and on time. These rules are called the norms of disclosure.

The law does not ask whether an investment is a good one. It asks whether the investor has been told enough to decide for himself. This is the philosophy of disclosure rather than merit review. A regulator does not approve or reject a business plan. It makes sure the plan is honestly described.

1. Why disclosure matters

Equal information. Promoters and directors know far more than outside investors. Disclosure narrows that gap.
Fair prices. A market price is only as good as the information behind it. Accurate disclosure lets prices reflect real value.
Less fraud. A company that must publish its accounts and events finds it harder to hide losses or divert money.
Accountability. Published facts let shareholders, analysts and regulators question the management.

2. The three moments of disclosure

Disclosure is required at three moments:

when securities are offered to investors;

when they are listed on a stock exchange; and
continuously, for as long as they stay listed.

Three laws divide this work. They are the Companies Act, 2013, the Securities Contracts (Regulation) Act, 1956 (SCRA), and the Securities and Exchange Board of India Act, 1992 (SEBI Act). They apply together, not as alternatives.

3. The Companies Act, 2013

(a) At the offer.

The prospectus states what SEBI specifies. Every prospectus of a public company must be dated and signed. It must state the information and the financial reports that SEBI specifies, in consultation with the Central Government (section 26(1)). The detailed contents are therefore in SEBI's regulations.

SEBI administers the issue provisions. For listed companies and companies that intend to list, the provisions on issue and transfer of securities are administered by SEBI (section 24).
Liability for misstatement. An untrue or misleading statement in a prospectus is punishable as fraud (section 34). Every director, promoter, expert and person who authorised the issue must compensate subscribers who suffer loss (section 35). Fraudulently inducing a person to invest is also punishable (section 36).

(b) While the company exists.

Financial statements must give a true and fair view, every year (section 129).
The board's report explains the state of the company's affairs, its risks and its related party contracts (section 134).
The annual return gives details of shareholding and directors (section 92).
Interests and owners. Directors must disclose their interests (section 184). Holders of beneficial interests and significant beneficial owners must also be disclosed (sections 89 and 90).

4. The Securities Contracts (Regulation) Act, 1956

(a) At listing. A company applying for listing must give the exchange many documents (rule 19(1) of the Securities Contracts (Regulation) Rules, 1957). They include its memorandum and articles, all its prospectuses, five years' accounts and ten years' dividend record. They also include its material contracts, a history of the company and a list of its ten largest holders.

(b) After listing. A person on whose application securities are listed shall comply with the conditions of the listing agreement (section 21). The listing agreement today points to SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015. Those regulations contain the continuing disclosure duties.

(c) Sanctions. Securities may be delisted on the grounds prescribed (section 21A). A company refused listing may appeal to the Securities Appellate Tribunal (section 22A).

5. The SEBI Act, 1992

Power to specify disclosure (section 11A). For the protection of investors, SEBI may specify the matters relating to issue of capital and transfer of securities. It may also specify the manner in which companies disclose them (section 11A(1)). It may prohibit a company from issuing a prospectus or an advertisement soliciting money from the public. It may also specify the requirements for listing and transfer (section 11A(2)).
General power (section 11). SEBI's duty to protect investors and regulate the market supports every disclosure rule it makes.
Prohibition of fraud (section 12A). No person may use a manipulative or deceptive device in connection with the issue or dealing in securities. A misleading disclosure falls within this ban.
Penalty (section 15A). A person who fails to furnish information, returns or documents required by the Act or the regulations is liable to a penalty. So is a person who furnishes false information.

6. SEBI's regulations

(a) At the offer: the ICDR Regulations, 2018. The Issue of Capital and Disclosure Requirements Regulations specify the contents of the offer document. They also lay down the disclosures for each kind of issue.

(b) After listing: the LODR Regulations, 2015.

Principles (regulation 4). Information must be adequate, accurate, explicit, timely and in simple language. Investors must get equal and cost efficient access to it.
Material events (regulation 30). Material events and information must be disclosed to the stock exchanges quickly. The time allowed is thirty minutes, twelve hours or twenty-four hours, depending on the kind of event and where it arises.
Annual report (regulation 34). The listed entity must file and publish its annual report.

(c) For holdings and trades.

The takeover code requires disclosure of holdings at five per cent and of changes of two per cent.
The insider trading regulations require insiders to disclose their trading in the company's securities.

7. The cases

Sahara. In Sahara India Real Estate Corporation Ltd. v. Securities and Exchange Board of India (decided 31 August 2012), two unlisted companies raised about Rs 25,781 crore from about three crore investors. They used optionally fully convertible debentures and called the issue a private placement. The Supreme Court held that an offer to fifty or more persons was an offer to the public. Listing and SEBI's disclosure requirements therefore applied. Registration of the prospectuses with the Registrar did not dispense with them. The companies were ordered to refund the money with interest.
Shriram Mutual Fund. In Securities and Exchange Board of India v. Shriram Mutual Fund, (2006) 5 SCC 361, the Court held that a breach of a civil obligation under the Act and regulations attracts the penalty at once. SEBI need not prove a guilty intention. So a company cannot escape a disclosure penalty by saying it did not mean to break the rule.

8. A worked example

Deccan Agro Ltd., an unlisted company, plans to raise Rs 500 crore from the public and list its shares.

Offer. Its prospectus must state the information SEBI specifies in the ICDR Regulations (section 26(1) of the Companies Act; section 11A of the SEBI Act).

Listing. It applies to the exchange with its accounts, dividend record and other documents (rule 19(1)). It signs the listing agreement (section 21 of the SCRA).
Continuing. After listing, it discloses material events to the exchange within the time limits (regulation 30 of the LODR Regulations). It publishes its accounts and board's report every year (sections 129 and 134).
Breach. Suppose it hides a large loss in its prospectus. The directors face liability for fraud and compensation (sections 34 and 35). SEBI may also penalise the company for false information (section 15A), without proving intention (Shriram Mutual Fund).

9. Why the system works only together

The Companies Act sets the frame. It requires a prospectus, annual accounts and a board's report.
SEBI fills in the detail. It does so under section 11A of the SEBI Act and section 26(1) of the Companies Act.
The SCRA ties listing to obedience. A company that stops disclosing risks delisting.
Enforcement completes it. Penalties, compensation and fraud provisions give the rules teeth.

A student should never treat the three laws as rival codes. Each covers a different moment, and each refers to the others.

The norms at a glance

Stage	Companies Act, 2013	SCRA, 1956 and Rules	SEBI Act, 1992 and regulations
Offer	Prospectus states what SEBI specifies (s.26); liability (ss.34 to 36)		Power to specify disclosures (s.11A(1)); ICDR Regulations
Listing		Documents at listing (r.19); listing agreement (s.21)	Listing requirements (s.11A(2))
Continuing	Accounts (s.129); board's report (s.134); annual return (s.92)	Delisting for breach (s.21A)	LODR Regulations (regs 4, 30, 34)
Enforcement	Fraud and compensation	Appeal to SAT (s.22A)	Fraud ban (s.12A); penalty (s.15A)

Conclusion

Conclusion. Indian securities law protects investors by disclosure, not by judging the merits of an investment. The Companies Act requires a prospectus with the information SEBI specifies, annual accounts and a board's report (sections 26, 129, 134). It punishes misstatement (sections 34 to 36). The SCRA ties listing to the listing agreement and allows delisting (sections 21, 21A). The SEBI Act empowers SEBI to specify disclosures and punishes fraud and false information (sections 11A, 12A, 15A). SEBI's ICDR and LODR Regulations supply the detail. The courts enforce these norms strictly (Sahara; Shriram Mutual Fund).

LL.B. (Three Years) Sem 3 Investment and Securities Law Oct 2025 Question Paper with Solutions

Contents