SEBI Ex-Parte Penalty Order Against 19 Ahmedabad Appellants Set Aside Over Unserved Hearing Notice; Case Remanded

SEBI’s Adjudicating Officer (AO) passed an ex parte order dated 12 February 2026 imposing penalties on the appellants for alleged securities-law violations.

The appellants accepted that the show-cause notice had been served, but contended that the hearing notice had not.

SEBI did not dispute that contention or the appellants’ reliance on Bajranglal B. Maloo HUF v. SEBI.

The Tribunal allowed the appellants’ application to condone the 192-day delay in filing the appeal.

Rule 4(3) of the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 requires an opportunity of hearing before the AO passes an order.

In Bajranglal B. Maloo HUF v. SEBI, Appeal No. 564 of 2021, decided on 31 August 2021, the Tribunal held that such an opportunity is mandatory.

The appeal was brought under Section 15T of the SEBI Act, 1992.

The Tribunal noted that the AO’s proceedings had culminated in an ex parte order and that the appellants’ claim that no hearing notice was served was not disputed by SEBI.

Applying Rule 4(3) and the holding in Bajranglal B. Maloo HUF, the Tribunal concluded that the required opportunity of hearing had not been provided.

The resulting order was therefore unsustainable.

It granted the appellants four weeks to file their reply and directed them to appear before the AO on 10 December 2026 without awaiting further notice from SEBI.

The appeal and pending interlocutory applications were disposed of with no order as to costs.