Arcadia Share And Stock Brokers Pvt. Ltd. vs SEBI on 13 October 2026

O R D E R

Per: Justice P. S. Dinesh Kumar, Presiding Officer (Oral)

This appeal is directed against order dated December 28, 2022, passed by the AO1, SEBI2 imposing a penalty of Rs.7.50 Lakhs jointly and severally against the appellant and 14 other noticees for violation of the SEBI Act3 and SEBI (PFUTP) Regulations4.

2. We have heard Mr. Kushal Shah, learned Advocate for the appellant and Mr. Vyom Shah, learned Advocate for the respondent.

3. Brief facts of the case are, appellant was a stock- broker during 2019. The allegation against the appellant is, in its proprietary trades carried out on 07.01.2019, 08.01.2019 and 09.01.2019, it had indulged in circular trading with 14 others in ‘Darshan Orna’ scrip.

4. Mr. Kushal Shah, learned Advocate for the appellant submitted that the impugned order does not record any loss caused to any third party nor any unlawful gain made by the appellant. He submitted that by the impugned order a penalty of Rs.7.50 Lakhs has been imposed jointly and severally against 15 noticees. According to him, appellant has no connection with the 14 co-noticees. He submitted that appellant desires to give quietus to the case and prayed that appellant may be permitted to pay pro-rata penalty of Rs. 50,000/- and this appeal may be disposed of.

1 Adjudicating Officer 2 Securities and Exchange Board of India 3 Securities and Exchange Board of India Act, 1992 4 SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market), 2003

5. In reply, Mr. Vyom Shah, learned Advocate for the SEBI submitted that joint and several liability has been imposed on the appellant and 14 others because they have indulged in circular trading. Therefore, appellant cannot be permitted to pay penalty on pro-rata basis.

6. To a pointed query, whether any recovery proceedings have been initiated against the noticees, on instructions, he submitted that proceedings have been initiated, but no recovery has been made as on date.

7. We have carefully considered rival contentions and perused the records.

8. Admitted position is, appellant has traded in Darshan Orna scrip. The allegation levelled against the appellant is, it has indulged in circular trades with 14 others. Appellant’s contention is that it has traded in the scrip, but not indulged in circular trading.

9. It is not in dispute that the transactions on the exchanges’ platform are screen based with anonymous sellers / purchasers. The impugned order does not disclose any inter se connection between the appellant with any of the other 14 noticees. No specific finding was shown to us by the respondent to substantiate either the inter se connection or directing the payment of penalty jointly and severally.

10. Mr. Kushal Shah for the appellant placed reliance on Surenderkaur Paramjeet Panesar v. SEBI5 (‘Surenderkaur’ for short) and contended that this Tribunal in identical circumstances, has permitted the noticees therein to pay the penalty individually.

11. In view of the fact that no connection is established between the parties and the appellant has come forward to pay pro-rata penalty, following the view taken by this Tribunal in Surenderkaur, it is just and appropriate to permit the appellant to pay pro-rata penalty which works out to Rs. 50,000/-. Hence, the following:

ORDER

i. Appeal is allowed in part and the direction to pay the penalty jointly and severally is modified qua the appellant and appellant is permitted to pay Rs. 50,000/- as penalty on pro-rata basis within four weeks from today.

ii. Remaining portion of the order is undisturbed.

iii. Pending interlocutory applications(s), if any, stand disposed of.

iv. No costs.

Justice P. S. Dinesh Kumar Presiding Officer

Ms. Meera Swarup Technical Member

Dr. Dheeraj Bhatnagar Technical Member 13.10.2026 PK

5 Paragraph No. 3 in Appeal No. 703 of 2021 along with other connected appeals, decided on 18.05.2023 by the Securities Appellate Tribunal, Mumbai. PRERNA MANISH KHARE Digitally signed by PRERNA MANISH KHARE Date: 2026.10.14 16:24:45 +05'30'