M/S. Mi Research vs Sebi

IN THE SECURITIES APPELLATE TRIBUNAL AT MUMBAI DATED THIS THE 17TH DAY OF JUNE, 2026 CORAM: Justice P.S. Dinesh Kumar, Presiding Officer Ms. Meera Swarup, Technical Member Dr. Dheeraj Bhatnagar, Technical Member Appeal No.96 of 2024 [Along with Misc. Application No.569 of 2024] M/s. MI Research (Proprietor Shri Ashish Jain) 351, Sector A, Mahalaxmi Nagar Main Road Indore, Madhya Pradesh - 452010. .....Appellant (By Mr. Abhishek Mishra, PCS with Mr. Ali Asgar Tambawala, PCS for the Appellant.) Securities and Exchange Board of India SEBI Bhavan BKC, Plot No.C4-A, „G‟ Block, Bandra-Kurla Complex, Bandra (East), Mumbai-400051, Maharashtra. .....Respondent (By Mr. Vishal Kanade, Advocate with Mr. Bhushan Shah, Mr. Akash Jain and Mr. Abhishek Nair, Advocates i/b. Mansukhlal Hiralal & Co. for the Respondent) 2 THIS APPEAL IS FILED UNDER SECTION 15T OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 TO SET ASIDE THE ORDER DATED SEPTEMBER1 18, 2023 PASSED BY THE AO, SEBI. THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR ORDERS ON JUNE 11, 2026 COMING ON FOR PRONOUNCEMENT OF ORDER THIS DAY, THE TRIBUNAL MADE THE FOLLOWING: ORDER Per: Justice P.S.

Dinesh Kumar, Presiding Officer This appeal is directed against order dated 18.09.2023 passed by AO1, SEBI2 imposing a penalty of ₹35 Lakhs on the appellant under Sections 15HA and 15EB of the SEBI Act, 19923 for violation of SEBI (IA) Regulations, 20134 and SEBI (PFUTP) Regulations, 20035. 2. We have heard Mr. Abhishek Mishra, PCS/Authorised Representative for the appellant and Mr. Vishal Kanade, learned Advocate for the SEBI. Adjudicating Officer 2 Securities and Exchange Board of India 3 Securities and Exchange Board of India Act, 1992 4 SEBI (Investment Advisers) Regulations, 2013 5 SEBI (Prohibition of Fraudulent and unfair Trade Practices) Regulations, 2003 3 3. Brief facts of the case are: 4. Assailing the impugned order, Mr. Abhishek Mishra, Authorised Representative for the appellant submitted that appellant accepts the violations described in para 9 of the impugned order and submitted that the penalty of ₹20 Lakhs imposed for the said violations is grossly disproportionate. He prayed that this Tribunal may consider and reduce the penalty. 5. So far as the violation of PFUTP Regulations is concerned, he submitted that SEBI has incorrectly relied upon the WhatsApp chats extracted in para 23 of the impugned order.

Amplifying his contention, he submitted that the alleged messages are in fact sent by one of appellant‟s former employees, Rajiv Malhotra. The chat shows that Rajiv was sending messages on behalf of another investment adviser by name Mr. Sunil Patel. He adverted to Exhibit - H in the memorandum of appeal and contended that Sunil Patel was running an investment advisory firm in the name and style of „Research24‟. Rajiv has mentioned the account number of „Research24‟ in the WhatsApp chat. Therefore, those chats do not pertain to appellant‟s case. SEBI Complaints Redressal System 5 6. He further submitted that Mr. Jakhar has no grievance against the appellant. However, in his email produced at Exhibit - I he has mentioned that he would take legal action against Rajiv. 7. In reply, Mr. Kanade for the SEBI submitted that the appellant has not furnished any material to show that Rajiv had left his job and joined „Research24‟. A combined reading of the WhatsApp chats clearly shows that false assurances were given to the clients. With regard to the admitted violation contained in para 9 of the impugned order, he submitted that the penalty imposed is commensurate with the violations and does not call for any inference by this Tribunal.

8. We have carefully considered the rival contentions and perused the records. 9. The AO has imposed two sets of penalties. ₹15 Lakhs under Section 15HA of the SEBI Act for violation of PFUTP Regulations and ₹20 Lakhs under Section 15EB of the SEBI Act for violation of IA Regulations. 10. So far as violation under the IA Regulations are concerned, the AO has recorded them in para 9 of the impugned order and the same have been admitted by the learned authorised representative. However, he prayed that the quantum of penalty may be reduced. It was argued that the AO has not 6 considered the factors prescribed in Section 15J of the SEBI Act while imposing the penalty. Mr. Mishra also contended that there are no earlier violations and the violations pointed out are curable. 11. The violations noted by the AO read as follows: 12. While considering Section 15J, the AO has recorded in para 41 of the impugned order that the fees charged by the appellant "appears to be unreasonably high" without recording any details. 13. We have carefully perused the allegations in para 9 of the impugned order extracted above.

The appellant has admitted the violations. There are no previous violations. Appellant has 748 clients. Only two complaints were received against him and both have been resolved. In his email Jakhar has stated that he has no grievance against the appellant. In these circumstances, we 7 are persuaded to accept appellant‟s contention that the penalty imposed is harsh and in our view, ₹10 Lakhs would be just and appropriate under Section 15EB of the SEBI Act. 14. So far as penalty under Section 15HA of the SEBI Act is concerned, the same is imposed for violation of PFUTP Regulations. AO‟s conclusions on this aspect are based on WhatsApp chats between one Rajiv Malhotra and complainant Jakhar. It is admitted that Rajiv Malhotra was an employee with the appellant. Mr. Kanade strongly relied upon the excerpt No.5 of the WhatsApp chat and contended that the chat clearly indicates that the complainant was given false assurances. We have perused the said excerpt and it reads as follows: 15. In the above chat, Rajiv has persuaded the complainant to invest and this excerpt is in the month of April 2018. 16. It is relevant to note that subsequently, on 12.07.2018, complainant Rinku had conversation with Rajiv, in which Rajiv has mentioned a profit of ₹1,04,000/-.

He has also mentioned the ICICI account number of „Research24‟. The relevant excerpt of conversation reads thus: 17. The above excerpt shows that the complainant was being suggested to change the investment adviser. Exhibit - H contains the details of investment adviser downloaded from SEBI‟s website. The proprietor of the „Research24‟ is shown as Sunil Patel. In the WhatsApp chats between Jakhar and Rajiv on 12.07.2018, Rajiv has furnished the ICICI bank account number and IFSC Code of „Research24‟. This corroborates appellant‟s contention that Rajiv had left his job. Suffice to note that the WhatsApp chats between Jakhar and Rajiv are not free from doubts. Hence, it is not safe to rely on those messages to conclude that false assurances were given to the complainant. In addition, in his email (Exhibit - I), Rinku Jakhar has stated that he was satisfied with the appellant who is MI Research Company‟s owner. No other material was pointed out to suggest that appellant has violated the PFUTP Regulations. Therefore, in our considered view, the charge of violation of PFUTP Regulations is not sustainable.

18. In view of the above discussion, the following: