The Supreme Court on Friday partly allowed Reliance Industries Ltd’s appeal in the long-running 2007 Reliance Petroleum futures trading case, setting aside a portion of the Securities Appellate Tribunal’s order relating to disgorgement, while upholding the penalty imposed by market regulator Sebi.A bench led by Justice JB Pardiwala of the apex court upheld the Rs 25 crore penalty levied by the Securities and Exchange Board of India (Sebi) against Reliance Industries Ltd (RIL) in the alleged fraud and manipulation case linked to trading in Reliance Petroleum Ltd (RPL) shares.However, the court rejected the SAT order that had directed RIL to disgorge Rs 447.27 crore along with 12% annual interestThe ruling comes in response to RIL’s 2020 appeal challenging the November 2020 order of the Securities Appellate Tribunal, which had upheld Sebi’s March 24, 2017 order against the company and 12 promoter group entities.In its 2:1 majority verdict, the tribunal had dismissed RIL’s plea and directed the company to disgorge Rs 447.27 crore with interest within 60 days. SAT had also upheld Sebi’s findings that RIL and the related entities were guilty of fraudulent and manipulative trading practices.Sebi’s 2017 order pertained to the sale of Reliance Petroleum Ltd shares by RIL in November 2007. The regulator had held that RIL engaged in insider trading and manipulated the market through trades in the futures and cash segments involving RPL shares.Apart from the monetary penalty and disgorgement direction, Sebi had also barred RIL and 12 promoter group entities from trading in equity derivatives for a period of one year.Defending the regulator’s action at the time, the tribunal had observed that there was no question of the disgorgement order being “harsh or a penal action”, describing it instead as an equitable and remedial measure.“The disgorgement amount of Rs 447.27 crore plus interest being a sizeable sum does not make Sebi's direction harsh because it is only a ‘remedial action’ and that what is disgorged is only what has been gorged by contravention of the specified laws,” the tribunal had said in its order.The Supreme Court’s decision now partly overturns the SAT ruling by striking down the disgorgement component, while retaining the Sebi penalty against RIL.