Securities Appellate Tribunal
India Asset Growth Fund & Another vs Sebi on 17 March, 2026
IN THE SECURITIES APPELLATE TRIBUNAL AT
MUMBAI
DATED THIS THE 17TH DAY OF MARCH, 2026
CORAM : Justice P. S. Dinesh Kumar, Presiding Officer
Ms. Meera Swarup, Technical Member
Dr. Dheeraj Bhatnagar, Technical Member
Appeal No. 355 of 2025
Between
1. India Asset Growth Fund
Tower 3, 11th Floor, India Bulls Financial
Centre, Senapati Bapat Marg,
Elphinston Road,
Mumbai - 400 013.
2. Essel Finance Advisors and Managers LLP
18th Floor, Marathon Futurex,
N M Joshi Marg, Lower Parel,
Mumbai - 400 013. .... Appellants
By Mr. Kunal Katariya, Advocate with Mr. Shubham
Dhamnaskar, Mr. Vineet Jadhav, Advocates i/b M/s.
Siddharth WalaWalkar Associates for the Appellants.
And
Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G Block,
Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051. .... Respondent
By Mr. Vishal Kanade, Advocate with Ms. Khushbu Chhajed,
Ms. Khushbu Trivedi, Mr. Pulkit Awasthi, Advocates i/b MDP
& Partners for the Respondent.
2
With
Appeal No. 356 of 2025
Between
1. Vishnu Prakash Rathore
18th Floor, Marathon Futurex,
NM Joshi Marg, Lower Parel,
Mumbai - 400 013.
2. Arpan Sarkar
Forward House No. 2, Flat No. 6,
Plot No. 326, BM Marg, Wadala (W),
Mumbai - 400 025.
3. Jaykishan Kikani
18th Floor, Marathon Futurex,
NM Joshi Marg, Lower Parel,
Mumbai - 400 013. .... Appellants
By Ms. Pooja Gera, Advocate with Mr. Umang Mehta, Mr. Aamir
Attari, Ms. Trisha George, Ms. Itisha Jha, Advocates i/b.
Avyaan Legal for the Appellants.
And
Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G Block,
Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051. .... Respondent
By Mr. Vishal Kanade, Advocate with Ms. Khushbu Chhajed,
Ms. Khushbu Trivedi, Mr. Pulkit Awasthi, Advocates i/b MDP
& Partners for the Respondent.
With
Appeal No. 387 of 2025
Between
3
1. India Asset Growth Fund II
A Wing, 18th Floor, Marathon Futurex,
N M Joshi Marg, Lower Parel (East),
Mumbai - 400 013.
2. Essel Finance Advisors and Managers
LLP
18th Floor, Marathon Futurex, NM Joshi
Marg, Lower Parel,
Mumbai - 400 013. .... Appellants
By Mr. Kunal Katariya, Advocate with Mr. Shubham
Dhamnaskar, Mr. Vineet Jadhav, Advocates i/b M/s.
Siddharth WalaWalkar Associates for the Appellants.
And
Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G Block,
Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051. .... Respondent
By Mr. Vishal Kanade, Advocate with Ms. Khushbu Chhajed,
Ms. Khushbu Trivedi, Mr. Pulkit Awasthi, Advocates i/b MDP
& Partners for the Respondent.
With
Appeal No. 388 of 2025
Between
1. Vishnu Prakash Rathore
18th Floor, Marathon Futurex,
NM Joshi Marg, Lower Parel,
Mumbai - 400 013.
2. Arpan Sarkar
Forward House No. 2, Flat No. 6,
Plot No. 326, BM Marg, Wadala (W),
Mumbai - 400 025.
4
3. Jaykishan Kikani
18th Floor, Marathon Futurex,
NM Joshi Marg, Lower Parel,
Mumbai - 400 013. .... Appellants
By Ms. Pooja Gera, Advocate with Mr. Umang Mehta, Mr. Aamir
Attari, Ms. Trisha George, Ms. Itisha Jha, Advocates i/b.
Avyaan Legal for the Appellants.
And
Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G Block,
Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051. .... Respondent
By Mr. Vishal Kanade, Advocate with Ms. Khushbu Chhajed,
Ms. Khushbu Trivedi, Mr. Pulkit Awasthi, Advocates i/b MDP
& Partners for the Respondent.
THESE APPEALS ARE FILED UNDER SECTION 15T OF
SEBI ACT, 1992 TO SET ASIDE ORDERS DATED JUNE
20, 2025 AND JULY 3, 2025 (EX-A) PASSED BY AO,
SEBI.
THESE APPEALS COMING ON FOR HEARING THIS 17TH
DAY OF MARCH 2026, THIS TRIBUNAL PASSED THE
FOLLOWING:
O R D E R
Per : Justice P. S. Dinesh Kumar, Presiding Officer (Oral) These four appeals arise out of the impugned orders dated June 20, 2025 and July 3, 2025 passed by the AO1 of 1 Adjudicating Officer 5 SEBI2. They are heard together and decided by this common order.
2. Appeal Nos.355 and 387 of 2025 are filed by the 'Fund' and the 'Fund Manager'. Appeal Nos.356 and 388 of 2025 are filed by the employees of the 'Fund Manager'.
3. SEBI conducted an inspection of books of accounts and other records and issued a show cause notice. After receiving replies, penalties have been imposed on the Fund, Fund Manager and its employees. The penalties imposed in order dated June 20, 2025 are as follows:
Noticee Name Penalty Penalty Amount u/s of SEBI Act India Asset 15C Rs. 1,00,000/- Fund Growth Fund 15EA Rs. 5,00,000/-
15HB Rs. 5,00,000/-
Fund Essel Finance
Manager Advisers &
Managers LLP 15C Rs. 2,00,000/-
Vishnu
Prakash
Employees Rathore
of Fund 15EA Rs.10,00,000/-
Manager Arpan Sarkar
(Joint and
Jaikishan several liability)
Kikani
2
Securities and Exchange Board of India 6
4. The penalties imposed in order dated July 3, 2025 are as follows:
Noticee Name Penalty Penalty Amount u/s of SEBI Act India Asset 15EA Rs. 6,00,000/- Fund Growth Fund 15HB Rs. 6,00,000/-
II
Fund Essel Finance
Manager Advisers &
Managers LLP
Rs.12,00,000/-
Vishnu
Prakash (Joint and
Employees Rathore several liability)
of Fund 15EA
Manager Arpan Sarkar
Jaikishan
Kikani
5. Mr. Kunal Katariya, learned Advocate for the appellants mainly contended that the penalties have been imposed on the Fund, the Fund Manager and the employees of the Fund Manager. With regard to penalty imposed against the Fund, he submitted that:
a. The Fund has worked for itself and there can be no violation by the fund and as such the penalty imposed against fund in unsustainable.
b. SEBI has taken a similar view in its order dated April 13, 2025 in Cinema Capital Venture Fund3.3
Order dated April 30, 2025 passed by QJA, SEBI in Cinema Capital Venture Fund 7 Adverting to paragraph No.97 thereof, he submitted that the Quasi-Judicial Authority, in that case has referred to SEBI's earlier decision in Urban Infrastructure Venture Capital Fund and held that no directions, remedial or punitive, could be issued against a Fund.
c. He submitted that this case is very similar to Cinema Capital Venture Fund and urged that the penalty against the Fund may be set aside.
6. With regard to penalty against the Fund Manager, he fairly submitted that there are some violations, which are venial in nature and this Tribunal may consider the proportionality aspect and reduce the quantum of penalty.
7. With regard to penalty against the noticee Nos.3, 4 and 5, who are employees of the Fund Manager, he submitted that Mr. Vishnu Prakash Rathore, joined service in 2017. He was promoted as CEO on September 22, 2020 and till then he could not have been considered as a KMP. The tenure of the Fund was between 2014 and 2021; and it was wound up in 2024. He submitted that, at best, Vishnu Prakash Rathore could be treated as a KMP from September 22, 2020. He submitted that in Piramal Enterprises Ltd.4, this Tribunal has held that SEBI is a watchdog and not a bulldog. If there is an infraction of a rule, remedial measures should be taken in the first instance and not punitive measures. With regard to noticee No.4, Arpan Sarkar, he submitted that he was working as an Assistant Vice President (Legal) and in other words, a law officer and a Compliance officer but not as a 4 Appeal No. 466 of 2016 (Piramal Enterprises Ltd.) disposed of on 15.05.2019 (paragraph Nos. 22 to 27) 8 KMP. Noticee No.5, Jaykishan Kikani was working as an Assistant Manager, (Fund Accounting) and in other words, he was an Accountant and not a KMP. He submitted that imposition of penalty on noticee Nos.3 to 5 is unsustainable.
8. In reply, Mr. Vishal Kanade, learned Advocate for SEBI submitted that though there is difference between a Fund working for itself and a Fund properly wound up. In this case, there is an admitted default. The Fund ought to have been wound up in 2021, whereas it has been wound up in 2024. Therefore, imposition of penalty on the Fund is just and appropriate. With regard to the penalty on the Fund Manager, he submitted that in view of admitted position that the Fund was not wound up in time and there have been serious irregularities, the Fund Manager is not entitled for any lenient view.
9. With regard to Vishnu Prakash Rathore, he submitted that he was also the CEO and therefore, a KMP. With regard to Arpan Sarkar (noticee No.4), he submitted that he was also a Compliance Officer and therefore, a KMP. However, there was no serious contest so far as the position of Mr. Kikani (noticee No.5) is concerned.
10. We have carefully considered the rival submissions and perused the record.
11. In substance, the prayer in the appeal is to consider the aspect of Fund's liability to pay the penalty and to take a lenient view with regard to the Fund Manager and its employees.
12. So far as the first issue is concerned, we may record, firstly, the Fund is always managed by the Fund Manager.9
Secondly, the Fund by itself cannot deal with the money collected from the investors. Thirdly, it has worked for itself as investors have been fully repaid by 2024/2025. Admittedly, there are no complaints against the Fund.
13. There is another aspect with regard to imposition of penalty on the Fund. The Fund belongs to the investors and if any penalty is imposed on the Fund, that will have to be appropriated from the investment made by the individual investors, which means that investors will indirectly become liable to pay the penalty for the acts and omissions on the part of the Fund Manager. Therefore, in our considered view, imposition of penalty against the Fund is not sustainable.
14. So far as the penalty imposed upon the Fund Manager is concerned, though the prayer was made for consideration of reduction in penalty, in view of the admitted position with regard to the commission of violations and undisputed fact that the Fund was not wound up as per schedule, we are not persuaded to accept the prayer for reduction in the quantum of penalty. However, the prayer with regard to the three employees of the Fund Manager merits consideration. Mr. Vishnu Prakash Rathore was an employee of the Manager from 2017. He was promoted as the CEO on September 22, 2020. The Fund was introduced in 2014 and ought to have been wound up in 2021. He was the CEO for the last one year when the fund was actually required to be wound up and for a period of two years reckoned from the date of inspection i.e. in 2022.
15. So far as Arpan Sarkar is concerned, he was a Law Officer and he was made as the Compliance Officer in the 10 year 2022. Admittedly, Kikani was not a KMP at all. Having regard to the fact that the Fund has worked for itself and all monies payable to the investors have been paid and particularly, in view of the admission of violations by the Fund Manager, in our considered opinion, ends of justice would be met by directing the Fund Manager to pay the penalty and pass appropriate order against the employees.
16. So far as the above mentioned three employees are concerned, we note from paragraph 15.11 of the impugned order in Appeal No.355 of 2025, wherein it is recorded that show cause notice did not contain any specific allegation against noticee Nos.3, 4 & 5. In addition, the directors of the Trustee Company and the designated partners of the Fund Manager have not been proceeded against. Admittedly, these three noticees are the employees. In view of the finding recorded in paragraph No.15.11, in our opinion, the penalties imposed on these employees are unsustainable.
17. Mr. Kunal Katariya submitted that a portion of the penalties had been deposited at the time of admission and the same may be taken note of. He sought for four weeks time to deposit the balance penalty.
18. Hence, the following:
ORDER i. Appeal Nos.355 and 387 of 2025 filed by the 'Fund' and the 'Fund Manager' are allowed in part and Orders dated June 20, 2025 and July 3, 2025 are modified.11
ii. The orders dated June 20, 2025 and July 3, 2025 are set aside qua the Fund.
iii. The entire penalty of ₹24 Lakh under Sections 15C and 15EA shall be paid by the Fund Manager (Appellant No.2).
iv. Appeal Nos.356 and 388 of 2025 filed by the employees of the 'Fund Manager' are allowed. Orders dated June 20, 2025 and July 3, 2025 are set aside qua the appellants.
v. Pending interlocutory application(s), if any, stand disposed of.
vi. No costs.
Justice P. S. Dinesh Kumar Presiding Officer Ms. Meera Swarup Technical Member Dr. Dheeraj Bhatnagar Technical Member 17.03.2026 MRS Digitally signed by MRS PRAMILA PTM PRAMILA Date: 2026.04.06 15:11:41 +05'30'