The response and feedback has been varied. Many find fault with the regulator for not being effective with use of its powers, and lacking in enforcement skills. Others feel that unless an accused is sent behind bars, there can be no real demonstration that the law works. Yet others have said it is the clarity in the Indian law that hurts the regulator, and that one should have conceptual expansiveness to enable the regulator to bring charges successfully. There has also been debate about some recent losses that SEBI has suffered in the courts.
The reality lies somewhere amidst all of these perceptions. A loss in the appellate forum is not necessarily a reflection of the law being weak. It can also be a reflection of a wrong case having been chased. That someone does not actually go behind bars is not necessarily a symptom of the strength of the law not having been truly demonstrated. Worldwide, criminals operating from behind bars is a menace, and if imprisonment were a deterrent, there ought not to be so many repeat offences. If there is lack of clarity in what constitutes compliance, even well-intentioned market players can be hauled up for breach, violating the canon of need for predictability in the legal system.
Equally, one important truth is that wide-ranging absolute power in the hands of an enforcement agency always dents the detection and prosecution skills of the police force. Absolute power makes the agency complacent, secure in its belief in its ability to inflict injury on its own terms. When the police indulges in “encounter” killings, the cadre gradually forgets and loses the skills necessary to bring home charges successfully to achieve conviction in a court – it believes it can put the accused to death, and need not bother with small niceties such as prosecuting and proving itself before an independent court.