Description

Recovery Officer order under Rule 11 of Second Schedule to Income-Tax Act, 1961 in the matter of penalty recovery from Ms. Shilpa Kotak for trading violations in Sujit Karkera and Group case.

Summary

SEBI’s Recovery Officer issued Order No. 002/2025 dated October 31, 2025 under Recovery Certificate No. 2490 of 2019 against Ms. Shilpa Kotak in the matter of Trading Activity of Sujit Karkera and Group. The order pertains to recovery proceedings for a penalty of Rs. 54,19,212/- imposed by SEBI’s Adjudicating Officer on May 15, 2012, which was upheld by the Supreme Court on September 20, 2017. While the principal amount has been recovered, Rs. 62,15,084/- remains outstanding towards interest and costs. The proceedings involve attachment of property transferred by the defaulter to Ms. Dipti Kishan Kotak after the adjudication order.

Key Points

  • Original penalty of Rs. 54,19,212/- imposed on Ms. Shilpa Kotak (PAN: AHDPK7485R) vide Adjudication Order dated May 15, 2012
  • Supreme Court upheld the penalty on September 20, 2017 after SAT had initially set it aside
  • Recovery Certificate No. 2490 of 2019 issued for total amount of Rs. 1,01,61,206/- (including interest and costs)
  • Principal amount of Rs. 54,19,212/- recovered through bank and demat remittances between October 2019 to August 2022
  • Outstanding amount of Rs. 62,15,084/- towards interest and costs remains unpaid
  • Property “Shop No. 4, A-Wing, Ground Floor, Mahaudi Darshan CHS Ltd., Dattani Park, Thakur Village, Kandivali East, Mumbai – 400101” transferred by defaulter to Ms. Dipti Kishan Kotak on November 02, 2016 (after AO order)
  • Bank accounts, Demat accounts and Mutual Fund folios attached vide Notices dated September 16, 2019
  • General Remittance Order issued on January 04, 2021 to banks and mutual funds

Regulatory Changes

No new regulatory changes introduced. This is an enforcement order applying existing provisions under Section 28A of SEBI Act, 1992 read with Rules 16, 48 and 51 of the Second Schedule to the Income-Tax Act, 1961.

Compliance Requirements

  • Ms. Shilpa Kotak required to pay outstanding amount of Rs. 62,15,084/- towards interest and costs
  • Attached property in name of Ms. Dipti Kishan Kotak subject to recovery proceedings for fraudulent transfer
  • Banks and mutual funds required to comply with attachment and remittance orders

Important Dates

  • May 15, 2012: Original Adjudication Order imposing penalty
  • December 17, 2012: SAT set aside AO Order
  • September 20, 2017: Supreme Court upheld penalty and set aside SAT order
  • August 28, 2019: Notice of Demand issued for Rs. 1,01,61,206/-
  • September 16, 2019: Notices of Attachment issued (Attachment Proceeding No. 4900 and 4901)
  • November 02, 2016: Subject Property transferred to Ms. Dipti Kishan Kotak
  • January 04, 2021: General Remittance Order issued
  • October 2019 to August 2022: Period of partial recovery through remittances
  • October 31, 2025: Recovery Officer Order No. 002/2025 issued

Impact Assessment

Individual Impact: This case demonstrates SEBI’s persistent enforcement actions to recover penalties even after significant delays and legal challenges. The defaulter faces attachment of property transferred to a third party (Ms. Dipti Kishan Kotak) after the adjudication order, indicating SEBI’s powers to pursue fraudulent transfers to evade penalty obligations.

Market Impact: Limited direct market impact as this is an individual enforcement matter. However, it serves as a precedent for SEBI’s ability to trace and attach assets transferred to avoid penalty payments, strengthening deterrence against such practices.

Legal Precedent: Confirms application of recovery provisions under Section 28A of SEBI Act, 1992 and the Income-Tax Act’s Second Schedule for attachment of fraudulently transferred properties in penalty recovery cases.

Impact Justification

Individual enforcement case involving recovery of Rs. 62.15 lakh outstanding penalty. Limited market-wide impact but demonstrates SEBI's pursuit of fraudulent asset transfers to evade penalty payments.