Description

Recovery notice demanding payment of Rs. 6,66,000/- (penalty plus interest) from Investment Research Advisor within 15 days, failing which recovery proceedings will be initiated.

Summary

SEBI has issued a Notice of Demand under Section 28A of the SEBI Act, 1992 read with Section 222 of the Income Tax Act, 1961, demanding payment of Rs. 6,66,000/- from Investment Research Advisor (Proprietor – Amit Gangrade, PAN: AVRPG8196P). The amount comprises a penalty of Rs. 5,00,000/- imposed by the Quasi Judicial Authority (QJA) in April 2023, accumulated interest of Rs. 1,65,000/- (at 1% per month from April 2023 to December 2025), and recovery costs of Rs. 1,000/-. The entity has 15 days from receipt of the notice to make payment, failing which SEBI will initiate recovery proceedings including asset attachment, bank account freezing, and other coercive measures.

Key Points

  • Total demand amount: Rs. 6,66,000/- (Rs. 5 lakh penalty + Rs. 1.65 lakh interest + Rs. 1,000 recovery cost)
  • Original penalty imposed by QJA vide Order No. QJA/GG/QJC/QJC-2/25931/2023-24 dated 26.04.2023
  • Interest calculated at 1% per month from April 2023 to December 2025
  • Payment deadline: 15 days from receipt of notice
  • Entity addresses: 403, Shrinath Avenue, Kibe Compound, Indore (452001) and 27-B, Ganga Colony, Near Apna Palace, Indore (452001)
  • Payment modes: EFT/NEFT/RTGS to ICICI Bank Account SEBIRRDPEN8973 (IFSC: ICIC0000106) or online via SEBI portal

Regulatory Changes

No new regulatory changes introduced. This notice applies existing recovery provisions under Section 28A of the SEBI Act, 1992 read with Sections 220-232 of the Income Tax Act, 1961.

Compliance Requirements

  • Immediate Payment Required: Amit Gangrade must pay Rs. 6,66,000/- within 15 days of receipt
  • Property Transfer Restrictions: The entity cannot mortgage, charge, lease, or deal with any property without Recovery Officer permission (Rule 16 of Second Schedule to Income Tax Act)
  • Deemed Property Clause: Any direct/indirect transfer of property or money to spouse, minor child, son’s wife, or son’s minor child after April 26, 2023 without adequate consideration will be deemed as entity’s property for recovery purposes
  • Payment Confirmation: Payment confirmation must be sent to Recovery Officer at SEBI Bhavan-II with complete transaction details (case name, RC number, payee name, date, amount, transaction number, bank details)

Important Dates

  • Original Penalty Date: April 26, 2023 (QJA Order)
  • Notice Date: December 12, 2025
  • Payment Deadline: 15 days from receipt of notice
  • Interest Period: April 2023 to December 2025 (32 months at 1% per month)

Impact Assessment

Market Impact: Nil. This is an individual enforcement action with no systemic market implications.

Entity Impact: High severity for Amit Gangrade personally. Non-compliance will trigger coercive recovery measures including:

  • Attachment and sale of movable/immovable property
  • Freezing of bank accounts
  • Potential arrest and detention
  • Appointment of receiver for property management

Operational Impact: The entity’s ability to conduct business may be severely restricted due to property dealing restrictions and potential asset attachment. This serves as a precedent demonstrating SEBI’s commitment to enforcing penalties and collecting dues from non-compliant investment research advisors.

Impact Justification

Entity-specific recovery notice against a single investment research advisor with no broader market impact. Concerns individual enforcement action only.