Description

SEBI issued a Notice of Demand for Rs. 5,26,000/- against Rajendra Madan Lal HUF (PAN: AALHR7398H) under Recovery Certificate No. 9104 of 2026 for penalty imposed in connection with dealing in Illiquid Stock Options on BSE.

Summary

SEBI has issued a Notice of Demand dated 07.05.2026 under Recovery Certificate No. RC 9104 of 2026 against Rajendra Madan Lal HUF (PAN: AALHR7398H), residing at BP 65 Lake Pearl Garden, Airport Road, Bhopal, Madhya Pradesh – 462036. The notice demands payment of Rs. 5,26,000/- (Rupees Five Lakh Twenty-Six Thousand Only) arising from a penalty imposed by SEBI’s Adjudicating Officer for dealing in Illiquid Stock Options on BSE.

Key Points

  • Recovery Certificate No. 9104 of 2026 issued under Section 28A of the SEBI Act, 1992 read with Section 222 of the Income Tax Act, 1961
  • Total amount due: Rs. 5,26,000/- comprising penalty of Rs. 5,00,000/-, interest of Rs. 25,000/- (January 2026 to May 2026 @ 1% per month), and recovery cost of Rs. 1,000/-
  • Penalty originally imposed vide Order No. Order/JS/RJ/2025-26/31996 dated 23.01.2026 by the Adjudicating Officer
  • Matter relates to dealing in Illiquid Stock Options on BSE
  • Payment must be made within 15 days of receipt of the notice
  • Any transfer of property or bank monies to spouse, minor child, son’s wife, or son’s minor child without adequate consideration on or after 23.01.2026 shall be deemed the defaulter’s property for recovery purposes

Regulatory Changes

No new regulatory changes introduced. This is an enforcement/recovery action under the existing framework of Section 28A of the SEBI Act, 1992 read with Sections 220–227, 228A, 229, and 232 of the Income Tax Act, 1961 and the Second Schedule thereto.

Compliance Requirements

  • Rajendra Madan Lal HUF must pay Rs. 5,26,000/- within 15 days of receipt of the notice
  • Payment to be made via EFT/NEFT/RTGS to Account No. SEBIRRDPEN9104 at ICICI Bank (IFSC: ICIC0000106), or via the online Recovery Payment module at https://siportal.sebi.gov.in, or through the SEBI Website > Enforcement > Recovery Proceedings > Pay Now portal
  • Confirmation of e-payment must be sent in the prescribed format to the Recovery Officer at SEBI Bhavan-II, BKC, Mumbai – 400051, or emailed to akashb@sebi.gov.in and recoveryho1@sebi.gov.in
  • The entity is prohibited from mortgaging, charging, leasing, or otherwise dealing with any property without prior permission of the Recovery Officer; any such transfer shall be void under Rule 16 of the Second Schedule to the Income Tax Act, 1961

Important Dates

  • Original penalty order date: 23.01.2026
  • Notice of Demand date: 07.05.2026
  • Payment deadline: Within 15 days of receipt of this notice
  • Interest accrual period: January 2026 to May 2026

Impact Assessment

This is an individual enforcement action with no direct market-wide or systemic impact. The case pertains to illiquid stock options trading on BSE, which SEBI has been actively pursuing as part of its broader crackdown on manipulative trading in illiquid derivatives. Failure to pay within the stipulated period may result in attachment and sale of movable/immovable property, attachment of bank accounts, or arrest and detention of the responsible persons of the HUF.

Impact Justification

Routine individual enforcement and recovery action against a single HUF entity for illiquid stock options trading; no systemic or market-wide implications.