In a breaking order the Bombay High Court has ordered market regulator SEBI as well as exchanges NSE and BSE to pay costs of ₹80 lakh for their illegal freezing of the demat accounts of a father-son . The judgment underlines due process in regulatory proceedings and protection of constitutional rights. 1. Case Background and Court's Findings The two appellants were investors, a father and his son, whose demat accounts were whimsically frozen by the respondents-SEBI, NSE, and BSE. It was submitted that the impugned order was passed against the appellants without any prior notice, proper investigation, or sufficient legal ground for freezing their demat accounts. Such an action resulted in huge financial losses and caused disruptions to the investment activities of the appellants. Division bench of Justices GS Kulkarni also Firdosh P Pooniwalla, stated the action by Sebi, NSE, and BSE as illegal and invalid. The court stated that orders for freezing had been executed without conforming to the procedural requirements, which amounted to violation of the fundamental rights of account holders. It further noted that the regulatory bodies, before taking such a drastic measure, did not extend a fair opportunity to be heard to the parties whose accounts were affected. 2. Violation of Fundamental Rights The Bombay High Court, particularly, expressed its disapproval of the grave procedural defects in the action on the part of SEBI, NSE, and BSE. The court held that with the freezing of the 'demat accounts', there was a clear violation of constitutional rights under Article 19(1)(g) of the Constitution of India which means the right to practice any profession as well as to carry on any occupation, trade, or business. In freezing the accounts without due process, the regulatory authorities had, therefore, violated some of the fundamental rights of the investors, thereby occasioning illegal deprivation of their property. The bench made it clear that regulatory bodies, while doing their jobs, had to strictly accord with the dictates of natural justice and due process. The court further observed that such actions tend to cause damage not only to one individual investor but also dent the public confidence in the regulatory regime governing the financial markets. 3. Imposition of Costs and Warning to the Regulatory Bodies The Bombay High Court also held SEBI and the two stock exchanges jointly and severally liable and imposed costs of ₹80 lakh, apart from declaring freezing of accounts illegal. The money is to be paid as compensation to the father-son duo for financial loss and damage to reputation due to the illegal freezing of accounts.