FINANCE, ACCOUNTS AND AUDITCentral

Section 15HB of The Securities and Exchange Board of India Act, 1992

Whoever fails to comply with any provision of this Act, the rules or the regulations made or directions issued by the Board thereunder for which no separate penalty has been provided, shall be ¹[liable to a penalty which shall not be less than one lakh rupees but which may extend to one crore rupees].]

15-I. Power to adjudicate.—(1) For the purpose of adjudging under sections 15A, 15B, 15C, 15D, 15E, ²[15EA, 15EB,] 15F, 15G, ³[15H, 15HA and 15HB] the Board ⁴[may] appoint any officer not below the rank of a Division Chief to be an adjudicating officer for holding an inquiry in the prescribed manner after giving any person concerned a reasonable opportunity of being heard for the purpose of imposing any penalty.

(2)While holding an inquiry the adjudicating officer shall have power to summon and enforce the attendance of any person acquainted with the facts and circumstances of the case to give evidence or to produce any document which in the opinion of the adjudicating officer, may be useful for or relevant to the subject matter of the inquiry and if, on such inquiry, he is satisfied that the person has failed to comply with the provisions of any of the sections specified in sub-section (1), he may impose such penalty as he thinks fit in accordance with the provisions of any of those sections. ⁵[(3) The Board may call for and examine the record of any proceedings under this section and if it considers that the order passed by the adjudicating officer is erroneous to the extent it is not in the interests of the securities market, it may, after making or causing to be made such inquiry as it deems necessary, pass an order enhancing the quantum of penalty, if the circumstances of the case so justify: Provided that no such order shall be passed unless the person concerned has been given an opportunity of being heard in the matter: Provided further that nothing contained in this sub-section shall be applicable after an expiry of a period of three months from the date of the order passed by the adjudicating officer or disposal of the appeal under section 15T, whichever is earlier.]

↩1.Subs. by Act 27 of 2014, s. 15, for “liable to a penalty which may extend to one crore rupees” (w.e.f. 8-9-2014).

↩2.Ins. by Act 13 of 2018, s. 184 (w.e.f. 8-3-2019).

↩3.Subs. by Act 59 of 2002, s. 18, for “and 15H” (w.e.f. 29-10-2002).

↩4.Subs. by Act 13 of 2018, s. 184, for “shall” (w.e.f. 8-3-2019).

↩5.Ins. by Act 27 of 2014, s. 16 (w.e.f. 28-3-2014).

Summary

This section acts as a general, catch-all penalty for breaking the rules of the Act.
It is only used when the broken rule does not already have its own specific penalty mentioned somewhere else in the law.
The minimum fine under this general rule is one lakh rupees.
The fine can be increased up to a maximum limit of one crore rupees.

Practical examples

1On August 12, 2023, a financial firm called BlueSky Capital failed to follow a minor formatting rule for their internal office signage as required by a new regulation. Since the law did not set a specific penalty for signage errors, the regulator applied this catch-all section and fined them two lakh rupees.

2Vikram, an investment adviser, ignored a general administrative direction issued by the regulator in January 2026. Because no exact penalty was written for ignoring that specific administrative letter, he was fined under this residual rule.

FAQ

1. When exactly is this specific penalty used?

It is used whenever someone breaks a rule, regulation, or direction, but the law does not list a separate, specific penalty for that exact violation.

2. What is the lowest amount someone can be fined under this catch-all provision?

The minimum fine is one lakh rupees.

3. Can a person be fined ten crore rupees under this section?

No, the maximum fine allowed under this specific catch-all section is one crore rupees.

Test yourself

Q1.Under Section 15HB of The Securities and Exchange Board of India Act, 1992, what is the required condition for this specific penalty to be applied to a violation?

Q2.Under Section 15HB of The Securities and Exchange Board of India Act, 1992, what is the maximum financial penalty that can be imposed?

Q3.Section 15A of The Securities and Exchange Board of India Act, 1992, sets a separate penalty for a person who fails to furnish required information to the Board. If a person fails to furnish information, which penalty rule applies?

Q4.Section 15C of The Securities and Exchange Board of India Act, 1992, provides a separate penalty for a listed company that fails to redress investor grievances after being asked to do so. If a company ignores an order to redress grievances, what prevents Section 15HB from being used to punish them?

15HAAPreviousSection 15HAA Penalty for alteration, destruction, etc., of records and failure to protect the electronic database of Board.15JNextSection 15J Factors to be taken into account while adjudging quantum of penalty].—While adjudging the quantum of penalty under 2[15-I or section 11 or section 11B, the Board or the adjudicating officer] shall have due regard to the following factors, namely:

←Section 15HAA Section 15J→