JUDGMENT S.B. Sinha, J.- BACKGROUND FACTS : Wimco Limited (Wimco) is a target company. Its shares are listed on the stock exchanges at Mumbai, Delhi, Calcutta, Kanpur as also on the National Stock Exchange. It is engaged in the business of manufacture and sale of a broad range of safety matches. 2. The Appellant No.1 herein (Swedish Match) is incorporated in Sweden. It is a holding company of the Appellant No.2 (S.M.S.) holdings its entire paid up capital. It is also a holding company of Haravon Investments Private Limited (Haravon) and Seed Trading Private Limited (Seed). These four companies hereinafter would be called and referred to as the Swedish Match Group. It had acquired in the target company 52.11 shares, i.e., 46.18 by Haravon and 5.93 by Seed. AVP Trading Private Limited (AVP) and Plash Floods P. Ltd. (Plash) were Indian promoters of the target company. They belong to one Jatia Group of companies holding 24.11 of the share capital of the target company, i.e., AVP holding 6.03 and Plash holding 18.08 . 3. The Swedish Match entered into an agreement with the Jatia Group to acquire majority shareholding in Haravon and Seed and to make a public announcement of offer to acquire 20 shares in Wimco. The obligation to make a public announcement of offer arose in view of indirect acquisition of more than 10 shares in Wimco (in view of the law as prevailing thence) attracting the provisions of Regulation 10 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter called and referred to for the sake of brevity as "the Regulations"). 4. On or about 17th December, 1997, the public announcement of offer was made by S.M.S. together with the Jatia Group of Companies, viz., Plash and AVP as "acquirers" and "persons acting in concert". In the letter of offer, it was specified that both Swedish Match Group and Jatia Group intend to exercise joint control over the affairs of Wimco. For the purpose of the public announcement of offer, `Haravon and `Seed being subsidiaries of Swedish Match Singapore were deemed to be "persons acting in concert" in terms of Regulation 2(e)(2)(i) of the `Regulations . 5. Upon completion of the process of public offer, the share holding in Wimco was as under : Haravon 28.28 , Seed 10.33 , AVP 5 and Plash 15 . 5. Upon completion of the process of public offer, the share holding in Wimco was as under : Haravon 28.28 , Seed 10.33 , AVP 5 and Plash 15 . The aggregate of total share holding of both the groups, thus, came to 58.61 . 6. It is not in dispute that subsequent to April, 1998 the said Groups were exercising joint control over the affairs of Wimco. By a Special Resolution adopted in this behalf, the target company allotted shares on a preferential allotment basis to Haravon , AVP and Plash purported to be in terms of Section 81(1)(A) of the Companies Act, 1956 whereupon the share holding in Wimco came to as under: Haravon-46.18 , AVP-6.03 , Plash-18.08 . 7. As no preferential shares were allotted to Seed, its shareholding was diluted to 5.93 . 8. Swedish Match Group, thus, held 52.11 and Jatia Group held 24.11 of the total shares in Wimco. The aggregate shareholding of both the Groups came to 76.22 . The Government of India by an order dated 5th July, 1999 permitted increase in foreign equity participation in the target company from 38.61 to 52.11. . 9. S.M.S. thereafter acquired from Jatia Group (as the latter was desirous of exiting from the joint control over Wimco) the following extent of share: AVP - 5.47 , Plash - 16.42 , at a price well above the market price. 10. Pursuant to or in furtherance of the letter of the Government of India dated 19th May, 2000 increasing foreign collaboration to the extent of 74.00438 ; the Swedish Match Group acquired 74 shareholding and Jatia Group was left with 2.22 in Wimco. 11. It is also not in dispute that although the market value of each acquired share of the target company was only Rs. 9.55; the consideration paid to Jatia Group by the Swedish Match Group was Rs. 35/- per equity share. Pursuant to or in furtherance of the said arrangement, the Directors belonging to Jatia Group resigned as a result whereof, their joint control with Swedish Match Group ceased leading to sole control of the latter. Allegedly, the cessation of joint control was approved in a general meeting of the shareholders of Wimco held on 27th September, 2000. Pursuant to or in furtherance of the said arrangement, the Directors belonging to Jatia Group resigned as a result whereof, their joint control with Swedish Match Group ceased leading to sole control of the latter. Allegedly, the cessation of joint control was approved in a general meeting of the shareholders of Wimco held on 27th September, 2000. S.M.S. thereupon by a letter dated 27th September, 2000 in terms of Regulation 7 of the Regulations disclosed to WIMCO its holding of more than 5 of the equity share capital. The said transaction was also brought to the notice of the SEBI (the Board) by a letter dated 28th September, 2000. It also agreed to adhere to the lock-in restrictions applicable to the locked in shares forming part of 21.89 shares purchased from AVP and Plash (Jatia Group of Companies). Upon receipt of the said information, SEBI by a letter dated 17th October, 2000 made a query as to whether the said transaction took place in accordance with Regulation 20 (pricing guidelines), Regulation 7 (mandatory disclosures) and Regulation 12 (change in control) of the Regulations, in response thereto, Swedish Match by a letter dated 1st November, 2000 submitted its replies thereto. An additional query by SEBI was made as regard calculation of market price and compliance of the provisions of the Regulations by a letter dated 30th November, 2000; to which a reply was given on 8th January, 2001. PROCEEDINGS BEFORE SEBI : 12. A show-cause notice was served upon the Appellants by SEBI asking them to show cause as to why no public announcement of offer had been made in terms of Regulations 10 and 11(1) of the Regulations stating: "4. As you have acquired the shares of WL, in the manner as stated above without making a public announcement as required by the provisions of the captioned regulations, you have, prima-facie, violated the provisions of Regulation 10 individually and Regulation 11(1) collectively of the captioned Regulations and, therefore, you are liable for penal action under the Regulations and SEBI Act, 1992. 5. In view of the above, you are called upon to show cause as to why one or more or all action (s) under Regulation 44 and Regulation 45(6) of the Regulations and Section 11B of the SEBI Act 1992, should not be initiated against you for violation specified above." 13. 5. In view of the above, you are called upon to show cause as to why one or more or all action (s) under Regulation 44 and Regulation 45(6) of the Regulations and Section 11B of the SEBI Act 1992, should not be initiated against you for violation specified above." 13. The Appellants herein filed a show cause before the Board. ORDER OF SEBI : 14. The Chairman, SEBI upon hearing the Appellants by an order dated 4th June, 2002 observed that Regulation 12 has no application. It was, however, held: "In view of the above, the submission of the Acquirers that Regulation 11(1) should exclude a transaction involving a transfer of shares as part of cessation of participation in joint control, particularly where such persons in joint control acquired shares as persons acting in concert is not tenable. Therefore, if an Acquirer triggers either of the Regulations, i.e., Regulations 10, 11 or 12, he has to make a public announcement unless the acquisition is specifically exempt in terms of the Regulations. Therefore, each of the Regulations 10, 11 & 12 has to be complied with independently by the Acquirers. The acquisition falling under proviso to Regulation 12 is not automatically exempt from the applicability of Regulations 10 & 11." 15. Consequent upon the said findings, the following directions were issued: "In view of the above the exercise of the powers conferred upon me under sub-section (3) of Section 4 read with Section 11B SEBI Act 1992 (hereinafter referred to as the Act) read with Regulation 44 & 45 of the Regulations, I hereby direct the Acquirers to make public announcement in terms of Chapter III of the Regulations in terms of sub-Regulation (1) of Regulation 11 taking 27/9/2000 as the reference date for calculation of offer price within 45 days of passing of this order." THE TRIBUNAL : 16. Aggrieved by and dissatisfied with the said order, an appeal was filed by the Appellants herein before the Securities Appellate Tribunal (Tribunal). The Tribunal took notice of the Appellant s letter dated 28.9.2000 contending "We wish to inform you that we have through our wholly owned subsidiary Swedish Match Singapore Pte. Aggrieved by and dissatisfied with the said order, an appeal was filed by the Appellants herein before the Securities Appellate Tribunal (Tribunal). The Tribunal took notice of the Appellant s letter dated 28.9.2000 contending "We wish to inform you that we have through our wholly owned subsidiary Swedish Match Singapore Pte. Ltd. and pursuant to the requisite approvals acquired an additional 11382800 equity shares from the aforesaid Indian companies such that we are not in sole control of WIMCO Ltd." and held: "Sequence has been mentioned correctly thus that they acquired additional shares and thereby acquired sole control of WIMCO Ltd. As the control is relatable to the shareholding in the instant case and to nothing else and cessation of control was due to divesting of the said ownership of shares in the absence of any other evidence to the contrary it can be safely concluded that the Acquirers acquired shares from the Jatia Group and consequently Jatia Group ceased to be in joint control of the target company. Assuming that if the Jatia Group had been in joint control due to some other factors, then section 11 would not have attracted. In the instant case, it is a clear case of acquisition of shares and cessation of control consequential to divestment of shares held by the person in control." (Emphasis supplied) 17. Holding that the provisions of Regulations 11(1) and 12 are not in conflict with each other in any manner and further holding that the Regulation is a beneficial legislation, the Tribunal held: "The legislative intent behind the Regulations is clear. The objective is to protect the interests in securities. It is with the said objective that regulations 10, 11 and 12 have been framed providing an opportunity to the existing shareholders of a company under acquisition and that exit opportunity cannot be denied by resorting to a narrow and technical interpretation of the regulations. As already stated in this order regulations 10, 11 and 12 are put in position to meet different situations. Which one of these regulations is attracted to an acquisition, would depend on the specific facts. In my opinion in the light of the facts, as the Respondent has held, the acquisition in question attracts the provisions of regulation 11(1)." 18. As already stated in this order regulations 10, 11 and 12 are put in position to meet different situations. Which one of these regulations is attracted to an acquisition, would depend on the specific facts. In my opinion in the light of the facts, as the Respondent has held, the acquisition in question attracts the provisions of regulation 11(1)." 18. This appeal has been filed by the Appellants herein before this Court in terms of Section 15-Z of the Securities and Exchange Board of India Act, 1992 (for short "the Act") SUBMISSIONS : 19. Mr. F.S. Nariman, learned senior counsel appearing on behalf of the Appellants would contend that although each one of the Regulation 10, 11 and 12 of the Regulations require making of public announcement, but the same are mutually exclusive and independent of one another as they address different types of acquisitions (as found by SEBI) and should necessarily, thus, be limited to the context of the situation with which it deals and should not be projected into the other. 20. The learned counsel would point out that Regulation 10 applies to initial acquisition of shares or voting rights by an acquirer whereas Regulation 11 having been captioned as "Consolidation of Holdings" deals with consolidation of existing shareholder (s) by way of acquisition of additional shares, i.e., such acquisition must be by way of combined shareholding of acquirer and persons who previously acted in concert with him resulting in increase of more than 5 and in case of Regulation 11(1), by acquisition of any additional shares. 21. Regulation 11, Mr. Nariman would submit, does not cover purchase of shares by the acquirer from the persons who have previously acquired shares in concert with him as in such a case there is no acquisition of additional shares as the aggregate shareholding of the parties does not increase at all and far less by 5 . Elaborating his submission, Mr. Nariman would argue that as both Swedish Match Group and Jatia Group had 76.22 which was reduced to 74 , there had been no acquisition of additional shares and in that view of the matter the purported admission by the Appellants in its letter dated 28.9.2000 should be ignored. Proviso appended to Regulation 12, according to Mr. Nariman would argue that as both Swedish Match Group and Jatia Group had 76.22 which was reduced to 74 , there had been no acquisition of additional shares and in that view of the matter the purported admission by the Appellants in its letter dated 28.9.2000 should be ignored. Proviso appended to Regulation 12, according to Mr. Nariman, is squarely attracted in the instant case, in view of the fact that the shareholders in a general meeting had approved the change in control in favour of the Swedish Match Group from the joint control of Swedish Match Group and Jatia Group and in that view of the matter, no public announcement therefor was required. In the alternative it was submitted that Regulation 11 does not envisage inter se transfer between one group to the another. The Scheme of the statute is such, it was urged, that the requirement of public announcement is not attracted in all cases which would be evident from Regulation 3 of the Regulations and in that view of the matter it cannot be said that the proviso appended to Regulation 12 will have no application in the instant case. In this connection our attention has also been drawn to the subsequent amendments made to the regulations. The learned counsel would argue that also in a situation like death or bankruptcy of a person in joint control may lead to sole control of the target company in which event also the rigours of Regulation 12 will have no application. Pointing out the difference between Regulations 11 and 12, it was urged that whereas in terms of Proviso to Regulation 12 the change in control is exempted from the applicability thereof (which otherwise requires the making of a public announcement) by a resolution passed by the shareholders in the General Meeting, but the necessity of making a public offer under Regulation 11 cannot be condoned by the shareholders because a right to have the shares offered under the public offer is conferred upon the remaining shareholders as even a majority of them cannot barter away the right of a minority. The position, however, would be different in a case where change in control of the target company is approved by the majority of the shareholders in a general meeting, as therein the question as regard protection of the interest of the shareholders would fall for consideration. 22. The position, however, would be different in a case where change in control of the target company is approved by the majority of the shareholders in a general meeting, as therein the question as regard protection of the interest of the shareholders would fall for consideration. 22. Regulations 10, 11 and 12 having been intended for the benefit of the shareholders of the target company, the learned counsel would argue, only a letter of offer is required to be sent to all the shareholders of the target company in terms of Regulation 22(3) for the purpose of allowing and enabling the existing shareholders to avail of the opportunity to offer their shares for purchase to the acquirers at a price specified in the public announcement and the letter of offer. Requirement of change from joint control to sole control would be fulfilled if all the existing shareholders approved the change from joint control to sole control, urged Mr. Nariman, as by reason of such a resolution, the transfer from joint control to the sole control would be offered which would amount to an election not to exit from the company and to remain therein under the management of the sole controller. 23. It was urged that Explanations (i) and (ii) are explanations to the proviso appended to Regulation 12 and not to the main part thereof, which had been inserted only for the purpose of clarifying the phrase "change in control" occurring therein. 24. The learned senior counsel would submit that where there is a mere cessor of control by one out of two persons already in control or where any person or persons are given joint control and the combined degree of control is not greater than being presently exercised, a resolution in a general meeting is not necessary; since there is no change in control and, thus, the question of any acquisition of control within the meaning of the main part of Regulation 12 would not arise. Proviso to Explanation (i) i.e. cessor of control by one or more persons already in control, according to Mr. Nariman, imposes a further restriction if the transfer of joint to sole control is through sale of shares at less than the market value of the shares, in which an event only a special Resolution is required to be passed at a specially called meeting of the shareholders of the target company. Nariman, imposes a further restriction if the transfer of joint to sole control is through sale of shares at less than the market value of the shares, in which an event only a special Resolution is required to be passed at a specially called meeting of the shareholders of the target company. 25. Without prejudice to the submissions as referred to hereinbefore, Mr. Nariman would argue that once a direction has been issued by the Board, the penalties specified in Regulation 44 including (a) criminal prosecution under Section 24 of the Act; (b) monetary penalty under Section 15H of the Act and (c) directions under the provisions of Section 11B of the Act may ensue but in the facts and circumstances of the case penal provisions should not have been directed to be resorted to having regard to the fact that the Regulations contained no clear and unambiguous words to indicate the true legal position. The penal provisions, it was contended, are required to be strictly construed. Reliance in this connection has been made on Francis Bennion s Statutory Interpretation, Third Edition, at page 637, Avais Vs. Hartford Shankhouse and District Workingmen s Social Club and Institute Ltd. [1969 (1) All ER 130 at 135], The Seksaria Cotton Mills Ltd. Vs. The State of Bombay [ 1953 SCR 825 at 834] and State of Bihar Vs. Bhagirath Sharma and Another [ (1973) 2 SCC 257 at 261]. 26. Mr. Kirti N. Raval, learned senior counsel appearing on behalf of the Respondent, on the other hand, would contend that the language in Regulations 10, 11 and 12 of the Regulations being clear and unambiguous, this Court should apply the principles of literal interpretation. He would urge that having regard to Explanation I appended to Regulation 12, the question of application of Regulation 12 would not arise inasmuch as by reason thereof a transfer of control from joint owners (Swedish Match A.B. and Jatia Group) to a single sole owner (Swedish Match Group) stands excluded from the concept of "Change in Control". 27. Mr. He would urge that having regard to Explanation I appended to Regulation 12, the question of application of Regulation 12 would not arise inasmuch as by reason thereof a transfer of control from joint owners (Swedish Match A.B. and Jatia Group) to a single sole owner (Swedish Match Group) stands excluded from the concept of "Change in Control". 27. Mr. Raval would submit that although the Board has accepted the position that there was no violation of Regulation 12, relying on or on the basis of proviso appended thereto, the Tribunal has clearly held that there has been no change in control in terms of the Regulations and in that view of the matter the opinion of the Tribunal shall prevail over that of the Board. Reliance in this connection has been placed on S. Shanmugavel Nadar Vs. State of T.N. [ (2002) 8 SCC 361 ]. 28. The learned counsel would strenuously urge that the application of Regulation 11 cannot be excluded by bringing the transaction in question as having been made under Regulation 12 in terms whereof an additional liability was required to be incurred by the Appellants. It was pointed out that no disclosure has ever been made by the Appellants that in fact they had intended to purchase the shares belonging to the Jatia Group at a price of Rs. 35 as against the then prevailing market price of Rs. 9.55 per equity share. In fact the stand of the Appellants had all along been that they would not sell the shares below the market price and, thus, indicating that the shares would be sold at the prevailing market price. 29. Mr. Raval would urge that the Appellants withheld a very valuable information from the shareholders i.e. the actual price of share being paid to Jatia Group which would have otherwise become known to them if a public announcement of offer was made. If it is to be held that even in a case of this nature no public announcement is to be made, the intent and purport of the legislature in bringing Regulations 10, 11 and 12 to the statute book with a view to protect the interest of the investors shall be frustrated. 30. If it is to be held that even in a case of this nature no public announcement is to be made, the intent and purport of the legislature in bringing Regulations 10, 11 and 12 to the statute book with a view to protect the interest of the investors shall be frustrated. 30. The learned counsel would further submit that the regulations were amended only for the purpose of plugging the loopholes which existed in the 1994 Regulations in terms of the recommendations of a Committee consisting of experts in the fields of law, securities market, accounts, finance, management etc. and, thus, if the interpretation of regulations as suggested by Mr. Nariman, is accepted, the same would frustrate the object of bringing the said regulations. Reliance in this behalf has been placed on Reserve Bank of India Vs. Peerless General Finance & Investment Co. Ltd. [ (1987) 1 SCC 424 ] and Shashikant Laxman Kale & Ors. Vs. Union of India and Anr. [ (1990) 4 SCC 366 ]. 31. The learned counsel would urge that Regulations 14, 15 and 16 clearly make a distinction in the timing of offer to be made between Regulations 10 and 11 on the one hand and Regulation 12, on the other, having regard to the fact that process of action initiating the operation of Regulations 10, 11 and 12 would be different. 32. In a given case, Mr. Raval would submit, a transaction may trigger both Regulations 11 and 12, in which event, an appropriate combined notice of public announcement of offer may be issued. 33. Drawing our attention to Regulation 44, the learned counsel would contend that in terms thereof the Board is not obliged to issue any direction only in terms of Clauses (a) to (d) thereof as the words "give such directions as it deems fit including" must be held to be of wide amplitude. Clauses (a) to (d) are only illustrative and not exhaustive and in that view of the matter, the Board was within its jurisdiction to issue the impugned directions. 34. It was contended that the penal provisions contained in Section 15H are not the subject matter of the present proceedings. Further, an order which may be passed under Section 15H of the Act would be separate and distinct.