Adjudication proceedings

The SEBI Act, 1992 does not just tell intermediaries what to do. It also says what happens when they do not.

The workbook states this rule the same way in two separate chapters. SEBI can impose penalties. SEBI can also start adjudication proceedings against a defaulting intermediary.

Two examples of default trigger this rule. One is failing to furnish information or returns. The other is failing to enter into an agreement with a client.

The workbook's own words, in identical wording in two separate chapters: "SEBI Act empowers SEBI to impose penalties and initiate adjudication proceedings against intermediaries who default on the grounds such as failure to furnish information, return etc. or failure by any person to enter into an agreement with clients etc."

Two facts are stated clearly, and one is deliberately left open:

1. The power. SEBI can both impose penalties and initiate adjudication proceedings against a defaulting intermediary — the workbook names these as the two consequences that flow from default.
2. The named triggers. The workbook gives two specific examples of what counts as a default: failure to furnish information or returns, and failure by any person to enter into an agreement with clients. It qualifies both with "etc.", signalling these are illustrations rather than an exhaustive list.
3. What is left unstated. "The penalties are specified by SEBI from time to time" — the workbook does not fix a rupee amount for any penalty, and no figure should be assumed or carried in from another source.

The placement of this rule in the workbook is itself informative. In Chapter 9 it appears immediately after the sections on an NPO's Statement of Utilisation of Funds and the Annual Impact Report disclosures — the same kind of information-furnishing obligations that, if defaulted on, are exactly the sort of lapse the adjudication power is aimed at. In Chapter 11 it appears as part of a general description of SEBI's regulatory powers under the SEBI Act, alongside SEBI's powers to prohibit fraudulent practices and regulate intermediaries.

A Social Impact Assessor registered as a SEBI intermediary fails to furnish a required periodic return to SEBI within the prescribed time, despite reminders.

Put dates on it. The return for the half year ended 30 September falls due on 31 October. The assessor files it on 14 December — 44 days late, after two reminders. On those facts SEBI may initiate adjudication proceedings and impose a penalty.

How much is the one thing this page will not tell you. No rupee figure is invented here, because the workbook fixes none: it says only that the penalty is what SEBI has specified separately, from time to time. If a question asks for the amount, that is the answer.

Separately, a Social Enterprise listed on the SSE fails to formally enter into an agreement with a client where the workbook's framework requires one. This is the second named trigger, and it too can lead to adjudication proceedings and a penalty — a distinct default from the information-furnishing failure above, but treated by the same sentence in the workbook as equally exposing the defaulting party to SEBI's adjudication power.

In neither case does the workbook itself specify how large a penalty might be, how the adjudicating process unfolds procedurally, or what appeal rights exist — a candidate should answer only what the text states: that the power exists, what two kinds of default the workbook names as triggering it, and that the amount is set by SEBI separately.

Chapter 9 (Disclosure Norms, Reporting Requirements by Social Impact Assessor and Penalties), section 9.3 (Penalties as per the SEBI Act, 1992), and Chapter 11 (Key Regulations), section 11.1 (SEBI Act 1992), state this rule in near-identical wording — a strong signal it is meant to be learned precisely as written. Expect a recall question on the two named default triggers, and a question testing whether the workbook specifies a penalty amount (it does not).

• Two named triggers only, both qualified by "etc.": failure to furnish information/returns, and failure to enter into a client agreement. Do not assume the list is exhaustive, and do not invent additional named triggers the workbook does not state.
• No penalty amount is given anywhere in this workbook. "Specified by SEBI from time to time" is the actual answer to a question asking for a figure — there is no number to memorise here.
• Adjudication proceedings and penalties are named as two things SEBI can do, not one — a question may ask for either or both.
• This is a SEBI Act, 1992 power, not something created by the SSE framework itself — the SSE-specific disclosure failures in Chapter 9 are simply examples of the kind of default this general SEBI Act power can be applied to.
• Do not confuse this with the detailed procedural mechanics of adjudication (adjudicating officer appointment, show-cause notice, hearing, appeal to the Securities Appellate Tribunal) — none of that procedure is described in this workbook; only the existence of the power and its two named triggers are.