The PFRDA proceedings concerned a Noticee No. 1 registered as a Point of Presence (PoP) and Aggregator, with its Directors as Noticees nos. 2 to 5. Following complaints concerning NPS Lite/Swavalamban subscribers, an onsite verification identified discrepancies including unauthorised POP-SP arrangements, differences in registered entities, unreconciled subscriber amounts, third-party collection arrangements and alleged linkages with B. Vijay Kumar Reddy. The Authority subsequently initiated adjudication under the PFRDA Act, 2013 and applicable regulations. The Show Cause Notice dated 20.10.2017 examined 8,646 transactions and alleged delays in uploading Subscriber Contribution Files and remitting funds to the Trustee Bank. The Noticees disputed the allegations and stated that amounts received from NPS Services had been credited to subscriber accounts and reconciled. The AO’s report recommended penalties under section 28(4) of the PFRDA Act. The proceedings also referred to the PFRDA (Aggregator) Regulations, 2015 and the regulatory framework governing Points of Presence. Ultimately, the Authority held that the primary allegation of substantial delays had not been established and therefore the consequential penalty could not be sustained. No penalty was imposed, and any penalty collected earlier was directed to be refunded within 15 days of the order.
PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
FINAL ORDER
BEFORE WHOLE TIME MEMBER (ECONOMICS)
UNDER SECTION 30 OF THE PFRDA ACT, 2013 READ WITH REGULATION 11 OF PFRDA (PROCEDURE FOR INQUIRY BY ADJUDICATING OFFICER) REGULATIONS, 2015
IN THE MATTER OF ALANKIT ASSIGNMENTS LTD. & ORS.
(Case No. PFRDA/17/06/16/0010/2017-SUP-AGGR)
In the matter of:
1. Alankit Assignments Ltd.
Alankit House, 4E/2,
Jhandewalan Extension,
New Delhi — 110055
2. Mr. Alok Agarwal,
CEO & Director,
Alankit Assignments Ltd.,
Alankit House, 4E/2,
Jhandewalan Extension,
New Delhi — 110055
3. Mr. Mukesh Chandra Agarwal,
Wholetime Director,
Alankit Assignments Ltd.,
Alankit House, 4E/2,
Jhandewalan Extension,
New Delhi — 110055
4. Mr. Yashjeet Basrar,
Wholetime Director,
Alankit Assignments Ltd.,
Alankit House, 4E/2,
Jhandewalan Extension,
New Delhi — 1100555
Mr. Harish Chandra Agarwal,
Executive Director
Compliance Officer,
Alankit House, 4E/2,
Jhandewalan Extension,
New Delhi — 110055
1. BACKGROUND
1.1 Noticee No. 1 was granted registration by the then interim Authority prior to the passage of the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013, as a Point of Presence (PoP) on 10.03.2010, for a period of five years and as an Aggregator on 24.11.2010, initially for a period of three years which was further extended on 04.02.2014 and 20.11.2014 respectively. Noticees nos. 2,3,4 &5 are the Directors of the Noticee No. 1 and were responsible for the conduct of business of Noticee No. 1, in relation to activities under NPS and NPS lite.
1.2 Since the aforesaid registrations predated the notification of the PFRDA Act, 2013, Noticee No. 1 was required to seek renewal of its registration in accordance with the regulations framed under Section 52 thereof, namely the Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2015 and the PFRDA (Aggregator) Regulations, 2015. Noticee No. 1 applied for renewal of certificate of registration for PoP and Aggregator on 20.05.2015 and 09.07.2015, respectively.
1.3 However, during pendency of the said applications, the Authority received complaints vide email around the month of October to December 2015 from few individuals alleging that NPS Lite/ Swavalamban Scheme subscribers were being cheated by one Mr. B. Vijay Kumar Reddy who was allegedly associated with the Noticee No. 1.
1.4 Pursuant to receipt of these complaints, an onsite verification of Noticee No. 1 was conducted by officials of the Authority on 28.10.2015. Based on such verification, interalia the following discrepancies were prima facie observed vide the report dated 13.09.2017 (i) the Noticee No.1 had entered into agreements with third parties/individuals to act as POP-SPs (Point of Presence- Service Providers) which comprised individuals, who were not permitted within the terms of PoP guidelines and SLA(s) (Service Level Agreement) (ii) as per information available with CRA, the Noticee No.1 had registered about 75 POP-SPs to work for it, whereas the Noticee No. 1 only provided a list of 18 such entities (iii) As against 5 NLCCs (NPS Lite Collection Centres) shown to be registered in the CRA system by Noticee No.1, to undertake activities pertaining to aggregators, Noticee No.1 could provide details of only 2 entities (iv) an amount of Rs. 1-1.5 lakhs of unreconciled amounts belonging to subscribers was found in the system which initially was about Rs.8 lakhs (v) the subscribers were allowed to deposit contributions directly into the Noticee No. l’s collection account, which was contrary to the regulations, resulting in difficulty in matching and booking and reconciliation of amounts and before the company (Noticee No. 1) had put any efficient mechanism in place to ensure reconciliation (vi) part of the activities to be performed by the Noticee No. 1 were being done by another company by the name Alankit Limited, without any authorization from the Authority or without such entity having obtained any seperate registration from the Authority (vii) the Noticee No.1 had linkages with Mr. B.Vijay Kumar Reddy/Straddle infotech, who is alleged to have perpetuated many irregularities and defrauded subscribers. Based on such observations a notice dated 02.12.2015, was issued by the Authority to the Noticee No.1, to stop forthwith, all discrepancies as above and confirm compliance to PFRDA and NPS Trust. Noticees vide their letter dated 01.02.2016, had inter alia submitted that they have taken corrective steps to ensure compliance i.e., have closed all entities operating as PoP-SPs but are only continuing with their company owned branches all across the country and 5 NLCCs in 2 regional offices at Hyderabad and Vishakhapatnam. Further, the Noticee No. 1 have filed police complaint and issued pubic notice against Straddle Infotech and B. Vijay Kumar Reddy.
1.5 Further, as per the fact-finding report dated 11.01.2016 of National Pension System Trust (NPST) it was found that the Noticee No. 1 had been receiving monies in its NPS-Lite collection account from one firm namely `NPS services’ allegedly run by Mr. B. Vijay Kumar Reddy, the same individual against whom the Authority received complaints of fraudulent dealing in activities under NPS. During January- April 2015, the said NPS services had deposited 26 times amount in NPS-Lite collection account amounting to Rs. 61,15,000/-. A scanned copy of the ‘certificate’ allegedly issued to NPS Services by Noticee No. 1 was also found by the NPST during its fact-finding exercise. It was further alleged in the said complaint that Mr. B. Vijay Kumar Reddy operated `NPS services’ by collecting security deposits ranging from 225,000 to Z2 lakh from various district in-charges and business development officers. It was further reported by another complainant that Z1,250/- was collected whereas only Z1000/-was meant for PRAN deposit and the remaining amount was distributed across different levels. Noticees were also found to have tied up with around 1150 partners registered as POP-SPs, in violation of Clause 8.1(d) of the agreement of PoP. Further, Noticee No. 1 had opened 6 collection accounts with different banks, with debit and credit entries to third parties/ individuals.
1.6 The Authority issued a notice on 16.03.2016, seeking explanation from Noticee No. 1 with respect to the complaints received against Mr. B. Vijay Kumar Reddy and association of Noticee No. 1 with the said person. Pursuant to this, Noticee No. 1 vide its letter dated 02.04.2016 submitted that the total amount of Rs. 93.41 lakhs was received from NPS Services. Out of this, Rs. 61,15,000/- was received by Noticee No. 1 between 01.01.2015 and 06.04.2015 and Rs. 32,26,000/- was received prior to 01.01.2015. The same was duly transferred to the subscribers’ account and proper reconciliation of money received has been done and transferred and this has been duly furnished also to NPS Trust. Statement of Transactions (SoTs) showing credit in 8665 subscribers PRAN Accounts was duly obtained from NSDL-CRA. The same was sent to subscribers’ postal addresses and copies were submitted to NPS Trust along with letters dated 01.03.2016 and 14.03.2016. Further, Noticees denied about the presence of any unreconciled amount in total amount transferred from NPS Services as the entire amount was credited in the subscribers accounts and that there is no unjust enrichment to the Noticee No. 1 as the amount is credited in the NPS collection Account where from the funds are transferred only to the Trustee Bank. Moreover, no funds could be withdrawn or utilized for any purpose other than being transferred to the Trustee Bank. Additionally, if any amounts remained unreconciled, it was due to incomplete subscriber details, which were being addressed promptly to ensure there is no loss to any subscriber.
1.7 After consideration of reply of Noticee No. 1 and further reports dated 12.02.2016 and 30.05.2016 of NPST, which indicated some delays in uploading SCFs (Subscriber Contribution Files) and remittance of subscribers’ contribution into Trustee Bank, the Authority decided to initiate Adjudication proceedings against Noticees for violation of provisions of the PFRDA Act, 2013 and Regulations made thereunder. The Adjudicating officer (AO) appointed by Authority under section 30 read with regulation 4 of PFRDA (Procedure for Inquiry by Adjudicating Officer) Regulations, 2015, issued Show Cause Notice (SCN) dated 20.10.2017 to the Noticees in respect of the alleged violations.
2. SCN DATED 20.10.2017
2.1 The SCN issued by the AO mentioned the background facts leading to the aforementioned charges. Besides the contraventions indicated in onsite verification report dated 13.09.2017 and fact-fmding report of NPS Trust dated 11.01.2016, a further report was received from NPS
Trust dated 12.02.2016, wherein it was observed that a total of Rs. 92.41 lakhs were received from NPS services into the collection account of Noticee No. 1 during the period between December 2013 to April 2015 and PRAN-wise details for the said amount was provided by the Noticee No. 1 . It was also borne out of the correspondences of NPS Trust with the Noticee No. 1 that the Noticee No. 1 had submitted signed and stamped copies of printed statements (SOTs) for 8262 transactions and these SOTs pertained to details of transactions received from NPS Services in the collection account of the Noticee No. 1 and subsequent transfer of the same to the individual PRANs. The SCN further mentioned that there were serious discrepancies as the Noticee No. 1 had provided SOTs of 8262 transactions whereas the said Noticee had confirmed 8665 transactions and the difference of 403 numbers were stated to have occurred due to multiple transactions in single PRAN. The said fact was confirmed by NPST vide its letter dated 03.05.2016. However, the final set of transactions under inquiry comprised 8,646 transactions, in respect of which the alleged TAT violations were examined.
2.2 It was mentioned in the said SCN that NPS Trust was further directed to examine the records made available by the Noticee No. 1 and the said Trust has placed on record vide its letter dated 30.05.2016 that the Noticees had miserably failed to follow the guidelines in supplement to “Regulations for Aggregators under NPS Lite-2010″issued by the Authority wherein it has been clearly mentioned that “data in respect of contributions collected during the week must be uploaded on the system on Friday before EOD, corresponding remittances must be credited to the NPS account held with Trustee Bank by next Monday.” Thus, the delay based on the above TAT on data submitted by CRA indicated that Subscriber Contribution Files (SCFs) were uploaded beyond the specified time line for 5781 transactions and in 5554 transactions funds were transferred beyond the specified timelines for the period 30.12.2013 to 04.02.15.
2.3 Further, it was mentioned in the SCN of the AO, based on the submissions made by the NPS Trust that, despite specific requests, Noticee No. 1 failed to furnish material information, including the dates on which funds were collected by NPS Services and the dates on which such funds were credited to the account of NPS Services. The Noticees stated that such information was not available with them. Further, despite repeated requisitions, complete details of refunds allegedly made to the subscribers from whom monies had been collected were not furnished. The aforesaid conduct raises concerns regarding the maintenance of proper records and transparency in the handling of subscriber contributions.
2.4 As per SCN, the Noticee No. 1 had not instituted an adequate system for periodic audit and reconciliation of their accounts. The Noticees accepted subscriber contributions routed through third parties, namely NPS Services, under the NPS Lite/ Swavalamban Scheme. Upon receipt of funds and subscriber details from NPS Services, the Noticees prepared the SCFs and remitted the amounts to the Trustee Bank without undertaking due diligence or seeking clarification as to the source and manner in which NPS Services was remitting monies into the collection accounts maintained by the Noticee No. 1.
2.5 Furthermore, as per SCN, Noticee No. 1 had opened and operated three separate collection accounts each for its activities as Point of Presence (POP) and Aggregator without obtaining prior approval from the Authority. This appeared to be in contravention of the Aggregator Regulations for NPS Lite, 2010, which permitted an Aggregator to maintain only one collection account. Further, the contention of Noticee No. 1 that such accounts were non-withdrawable was not borne out of the records, which indicated that debits were made from the said accounts for refunding unreconciled amounts to subscribers. Additionally, the material available on record prima facie indicated an association between NPS Services and Mr. B. Vijay Kumar Reddy, notwithstanding the denial thereof by the Noticees.
2.6 In addition to above, as per SCN, all wrong doings on the part of the said parties in the circumstances could be strongly presumed to be in active connivance with and knowledge of the Noticees above named with a view to cause unjust enrichment and to enjoy the deposits of subscriber’s contributions in its own account.
2.7 The aforementioned charges were framed under the following provisions in the SCN dated 20.10.2017:
Section 28(4) of the PFRDA Act, 2013 read with Clause 12.4 & 14 of Regulations for Aggregators 2010; ANNEXURE-Il to Guidelines in supplement to “Regulations for Aggregators under NPS Lite-2010” point (i) under NPS contribution collection process & (ii) under pooling of contribution in Aggregator’s Bank Account; Regulation 14(2) of the PFRDA (Aggregator) Regulations, 2015; Regulation 16(1) and (2) of the PFRDA (Point of Presence) Regulations, 2015.
Certified True Copy
3. SUBMISSIONS OF NOTICEES IN RESPONSE TO ALLEGATIONS CONTAINED IN SCN DATED 20.10.2017
3.1 Noticees have inter alia made following submissions vide their reply dated 23.11.2017 in response to the SCN dated 20.10.2017:
i. That Directors (Noticee Nos. 2-5) were not involved in day-to-day management and only took policy decisions, while operational responsibilities under NPS were handled by professional executives. Also, upon receiving information regarding Mr. B. Vijay Kumar Reddy’s fraudulent use of the company’s NLCC code, Noticee No. 1 took immediate action by terminating him and filing criminal complaints against him, clarifying his limited role for running the ‘TIN Facilitation Centre for accepting PAN/ TAN/ ETDS/ TCS/ AIR/ Returns/ PAN Authorization/ and digitization of paper returns to be filed with Tax Department. The authorization certificate alleged to have been issued by Noticee No. 1 dated 23.11.2012 obtained during fact finding by NPS Trust was stated to be forged since the relevant code was issued only in 2013.
ii. That the Noticee No. 1 undertook operational improvements post the observations of the Authority, particularly the structural changes of its branches and regional offices. That temporary reconciliation issues arose due to lack of PRAN details, but no funds remained unreconciled in the NPS Trust Account. Noticees denied that Alankit Limited carried out any NPS or Aggregator activities on behalf of the Noticee No. 1. The Noticees denied any association with Straddle Infotech and, upon discovering misrepresentation, they issued public notices, filed police complaints in multiple cities, and published disclaimers on its website. All funds received from NPS Services were duly credited to subscribers’ accounts. Further, Noticees mentioned that they were not aware of any of the activities of NPS services except to the extent that they were receiving money and subscribers’ details thereof from them. Alleged delays in SCF uploads (T+4) and fund transfers (T+5) were attributed to incomplete or delayed data. Noticees stated that they acted promptly after reconciliation and provided transaction details to the Authority. Allegations of fund misuse, unjust enrichment, or financial gain were strongly denied, asserting that no subscribers’ funds were used for self-purpose and funds remained in collection accounts only until reconciliation. The Noticees denied any connivance or deliberate violation and contended that PFRDA (Aggregator) Regulations, 2015 cannot be applied retrospectively as the matter pertains to a prior period.
beamed True Copy
3.2 Further, the Noticees vide their detailed written submission dated 02.04.2018 reiterated their earlier response and inter alia made following submissions:
i. Majority of the cases pertained to new registration and TAT for PRAN generation itself is T+7 to 10 days in addition to TAT for SCF upload and fund transfer. During closure of financial years 2013-2014 and 2014-2015, the Authority from time to time issued instructions to the aggregators/PoPs to extend the contribution upload deadline/date from 31St March to 30th April of those years.
ii. That AO does not have jurisdiction and power under the PFRDA Act, 2013 to recommend penalty upon the Noticees. Section 35(2) of the Act states that no court inferior to that of a court of session shall try any offence punishable under this Act.
iii. Opening of more than one collection accounts was done for quick clearance of cheques of the subscribers and for giving wider choice to the subscribers who are located at such place where some bank may not have a branch. No amount other than subscribers’ contribution has/had ever been deliberately received in these accounts. Online deposit facility was initiated to enable subscribers to deposit even on the last day without having to approach aggregator office located at distant place. Subscribers’ monies have been kept in segregated form in separate account and the money has not been used for self or any other client of the Noticee No. 1.
iv. Regarding debit entries from the collection accounts of Noticee No. 1 as pointed out by the PO in her submission, Noticees have provided details of such debit entries and submitted that all accounts were non-withdrawable and debit entries only represented the transfer to NPS Trust account or refund of unreconciled amount on account of discrepancy in subscribers’ particulars.
v. No subscriber has incurred any loss on account of timely investment of subscribers’ monies.
vi. No third party/individuals were registered by them as NLCC and only company owned branches were registered.
4. FINDINGS OF AO AS CONTAINED IN INQUIRY REPORT DATED 23.04.2018
4.1 In his report dated 23.04.2018, AO has given following findings including recommendation of penalty upon the Noticees:
i. Firstly, there were significant delays in 5781 SCF uploads (ranging from 2 to 29 days) and 5554 remittance of contributions (ranging from 2 to 27 days) during the period December 2013 to April 2015, in breach of the specified timelines under the applicable regulations, resulting in loss to subscribers due to late investment of their contributions.
ii. Secondly, regarding relationship with NPS Services/ Mr. B. Vijay Kumar Reddy, evidence on record showed that substantial amounts (Rs.61,15,000/- from 01-01.2015 to 06.04.2015 and Rs. 32 Lacs (approximately prior to 2015) were routed through NPS Services and accepted and remitted by the Noticees. The existence of operational linkages, including references on websites (website of Straddle Infotech and NPS services reflecting Mr. B. Vijaykumar Reddy as an authorized service provider for Noticee No. 1 as NLCC, POP-SP), certificate issued by Noticee No. 1 showing NLCC/POP-SP code, coupled with the failure on part of Noticees to produce original documents to substantiate claims of forgery further strengthened this allegation against Noticees. Moreover, repeated deposits by a third party into the collection accounts of Noticee No. 1 could not have occurred without the knowledge and acquiescence of the Noticees. Thus, oversight office of Noticee No. 1 has failed to supervise, monitor the functions of the entity with respect to the activities undertaken as an Aggregator/POP.
iii. Further, the Noticees committed multiple violations of Aggregator Regulations 2010 and supplementary Guidelines under NPS Lite-2010, by opening six collection accounts without prior approval of Authority, permitting direct deposits by subscribers into collection accounts, and introducing online collection facility without approval of Authority. These actions were contrary to the regulations and guidelines, and led to funds remaining idle and unallocated.
iv. Regarding the issue as to whether the entity failed to segregate the monies of the clients, the defaults were substantial and running over a period of time and not in nature of one-off transaction which could have escaped attention of a vigilant eye, especially when various kinds of internal and external audits are involved. Monies were lying in 6 bank accounts in violation of the specified TAT without having being invested, leading thereby to consequential loss to subscribers. Further, Aggregator Regulations, 2010 required an aggregator to undertake the activity under NPS in compliance with the ‘Know Your Customer’ (KYC) requirements in respect of potential NPS subscribers as mandated under AML/CFT requirements. Monies in the bank account whether they have caused benefit to the Noticees or not has to be balanced with the loss occasioned to subscribers owing to non-investment, given that NPS is a market linked product.
v. Further, Aggregator Regulations 2010 required the aggregator’s collection account to be a “non-withdrawable account” with an option to transfer the funds into NPS Trust account only. However, unusual debits and credits have been observed which Noticee sought to justify by submitting inter alia that in some cases, monies from TIN related activity were erroneously received in NPS lite collection account while some debit entries represented refund of contributions to subscribers. Noticees had kept around Rs. 79,500/- in different NPS Lite collection accounts as `un-reconciled’ from April 2015 to November, 2015 which were not remitted to the Trustee Bank within the timelines specified by the Authority.
vi. Further, there were also instances where Noticee No.1 acted as facilitator of aggregators including government departments but has improperly collected funds into its collection accounts which otherwise ought to have been collected in respective aggregators’ collection accounts, thereby exacerbating the issue of segregation and reconciliation.
vii. Noticee No.1 rotated the monies in these 6 collection accounts rather than transmitting into trustee bank account so that it could be invested. This type of transfer from one collection account to another is not acceptable wherein the funds could have been directly transferred to the Trustee Bank from the collection account maintained with any bank. These amounts formed the part of remittances received from NPS Services/Mr. B. Vijay Kumar Reddy.
viii. Noticees (Nos. 2 to 5), being part of the management, were actively involved in and aware of the operations of Noticee No. 1 and failed to take steps to prevent these violations. It appears from the finding of the AO that the effect of these acts and omissions demonstrated a clear violation of Section 28(4) of the PFRDA Act, 2013 which mandates segregation of subscriber funds. The defence that the misconduct was attributable to Mr. B. Vijay Kumar Reddy is not acceptable, as the conduct of the Noticees indicates knowledge and participation. Also, the Noticees have claimed that they filed police complaints at various places, but despite being asked have failed to disclose the status of such complaints and investigations if any conducted.
4.2 In view of the above, AO recommended that all the Noticees are in violation of the provisions of Section 28(4) of the Act and a total penalty of Rs. 9,00,590/- was recommended on the Noticees (jointly and severally) taking into consideration the notional loss sustained by the subscribers amounting to Rs. 4,00,590/- (Rs. 1,86,170/- for the delays in SCF upload in 5781 transactions & Rs. 2,14,420/- for the delays in remittance of funds to the Trustee Bank in 5554 transactions) and Rs. 1,00,000/- penalty on each of the Noticees on account of the repetitive nature of the defaults on the part of such Noticees both jointly and severally as the Noticee No.1 was acting through the other Noticees, being the management.
5. The then Whole Time Member (Penalty) gave opportunity of filing response and personal hearing to the Noticees. Noticees vide written submission dated 26.11.2018 while reiterating their earlier submissions made before AO had further submitted that Section 28(4) only envisages penalty upon a person who is registered under the Act as an intermediary and fails to segregate money of the client or clients or uses the monies of a client or clients for self or for any other client. In the present case, the Noticees no. 2 to 5 are not registered as intermediary and therefore penalty recommended upon them is void.
6. Vide his order dated 02.01.2019, the then Whole Time Member (penalty) confirmed the AO’s recommendation of penalty:
“After taking into consideration the facts and circumstances of the case, material/facts on record and also the factors mentioned in the preceding paragraphs, I, in exercise of the powers conferred under Section 30 of the Pension Fund Regulatory Development Authority (PFRDA) Act, 2013 read with Section 28 of the PFRDA Act and PFRDA (Procedure for Inquiry by Adjudicating Officer) Regulations, 2015, hereby impose a penalty of Rs. 9,00,590/- to be paid by the Noticees (jointly and severally).”
7. The Noticees filed a “review application” against the order dated 02.01.2019 passed by the Whole Time Member (Penalty) before Chairperson, PFRDA. However, as there is no provision permitting review of an order of the Whole Time Member (Penalty) in PFRDA Act, 2013 or rules and regulations made thereunder, the said application was rejected in limine.
8. Further, Noticees, vide letter dated 18.02.2019, deposited a demand draft for Rs.9,00,590/- to the Authority under protest to avoid any further consequential action that may be initiated by PFRDA.
9. The application of Noticee No. 1 for renewal of Certificate of Registration for PoP and Aggregator which were pending were subsequently rejected by the Authority on 21.02.2019. The Noticees filed 3 separate Appeals before the Hon’ble Securities Appellate Tribunal (hereinafter `Hon’ble SAT’) whereby the rejection of application of registration as PoP, Aggregator and Order of the Whole Time Member (Finance) and Designated Member for imposing penalty on the Noticees for violation of the provisions of the Act and Regulations were challenged.
10. The Hon’ble SAT vide its order dated 15.02.2021 (Hon’ble SAT order) allowed the said Appeal(s) and quashed the impugned order dated 02.01.2019 passed by the Whole Time Member authorized to impose penalty inter alia with the following observations, referring to the Circular no. CRA/PO&RI/FC/2012/012 dated 04.12.2012 issued by the National Securities Depository Limited (NSDL-CRA circular dated 04.12.2012) and Circular no. ‘Certified True Copy PFRDA/2015/20/APY/1 dated 27.07.2015 issued by PFRDA (APY Circular dated 27.07.2015).
The operative parts of the Hon’ble SAT order read as follows:
“46. We are of the opinion that non consideration of the aforesaid two Circulars which goes to the root of the matter with regard to the time line for uploading of the SCF and transfer of funds to the trustee bank vitiates the impugned order. If these two Circulars are considered the finding relating to the alleged delay in the uploading of the SCF and in the remittance may not happen or may get drastically reduced.
47. Consequently on this short ground, we are of the opinion that the impugned order cannot be sustained and it not necessary to go into the other issues raised in the show cause notice or the A 0″s report or in the impugned order. In view of the aforesaid, the impugned order cannot be sustained and is quashed.
48. For the reasons stated aforesaid, the impugned order dated 21st February, 2019 in appeal no.1 of 2019, impugned order dated 21st February, 2019 in appeal no.2 of 2019 and the impugned order dated 2nd January, 2019 in appeal no.3 of 2019 cannot be sustained and are quashed. All the appeals are allowed. The matter is remitted to the authority to decide the applications for grant of registration afresh and if it is unable to grant the registration of certificate it will grant conditional registration which would be subject to the outcome to the penalty proceedings. The Designated Member/WTM is directed to reconsider the matter in the light of the observations made aforesaid. In the circumstances of the case, parties shall bear their own costs.”
11. Pursuant to the order of the Hon’ble SAT, the then Whole Time Member authorised to impose penalty conducted hearing of the parties on 23.09.2021. Noticees vide their written submission dated 28.10.2021 inter alia submitted that Authority has never received any complaint from any of the subscribers still has recommended penalty of 9,00,590/- on account of notional loss sustained by the subscriber. The start date (`T’) was not in accordance with the NSDL-CRA Circular 04.12.2012 and APY Circular dated 27.07.2015. The SCFs were uploaded within T+4 and the funds were transferred to the Trustee Bank within T+ 5 days (excluding Saturdays, Sundays and Bank holidays), as is evident from the chart filed on record by the company. Further, the transactions pertained to the period between 30.12.2013 to 04.02.2015 and thus fell under the ambit of Regulation for aggregators under NPS-Lite 2010, therefore, in absence of any retrospective application, Aggregator Regulation which was notified on 10.03.2015 will Certified True Copy not be applicable on these transactions. Noticees further reiterated that penalty under section 28(4) can only be imposed on a person registered as ‘intermediary’ and not on “an individual”.
12. Vide an order dated 02.05.2022, the then Whole Time Member required the Authority to conduct fresh inquiry on the issue of delay in SCF upload and remittance of contribution of subscriber in light of relevant regulations/ circulars including NSDL-CRA Circular dated 04.12.2012 and APY Circular dated 27.07.2015, if found applicable in the facts and circumstances of the present case which would alter the finding of AO and previous order dated 02.01.2019 of the then Whole Time Member authorised to impose penalty.
13. The Authority then appointed AO vide office order dated 23.08.2022 for holding inquiry, adjudging and recommending penalty, if any, in the said matter under section 30 of PFRDA Act, 2013. Presenting Officer (PO) was appointed vide separate office order dated 23.08.2022 to present the case on behalf of the Authority in the said proceeding in terms of and as per PFRDA (Procedure for Inquiry by Adjudicating Officer) Regulations, 2015. Hearing notice dated 02.09.2022 was issued for providing an opportunity of hearing to the Noticees. Noticees reiterated their submissions made before the Whole Time Member.
14. FINDING OF AO CONTAINED IN INQUIRY REPORT DATED 12.01.2023
14.1 Pursuant to the Hon’ble SAT order dated 15.02.2021 and the then Whole Time Member’s order dated 02.05.2022, the disputed 8646 transactions were re-examined by AO who bifurcated the transactions into 2 categories i.e., new (6307 transactions) and existing subscribers (2339 transactions). Hearing was conducted by AO on 19.09.2022. It was noted that the NSDL-CRA Circular dated 04.12.2012 revised ‘T’ as PRAN generation date only with respect to New Subscribers. In recalculation post application of the said circulars, in respect of New Subscribers delay were identified in 37 transactions for upload of SCF and in 156 transactions for transfer of funds to TB and in respect of existing subscribers, delay were identified in 36 transactions for upload of SCF and 36 transactions for transfer of funds to TB which AO considered as miniscule and recommended that no penalty on the Noticees may be imposed under section 28(4) of the PFRDA Act, 2013.
14.2 Further, it was recommended by the AO that out of the charges alleged in Inquiry report dated 23.04.2018 and upheld by the then Whole Time Member authorised to impose penalty order on 02.01.2019 stating that “only with respect to the violation of TAT which had resulted in delay of SCF upload and remittance of contribution of subscribers to the TB, may be disposed off, without imposition of any monetary penalty under section 28(4) of the PFRDA Act.”
14.3 AO forwarded his inquiry report dated 12.01.2023 to the then Member (Investigation and Surveillance) who vide Inter-departmental memorandum (IDM) dated 01.02.2023 gave his observations and sought supplementary report from the AO on applicability of NSDL-CRA Circular dated 04.12.2012 and APY Circular dated 27.07.2015 to the present case, whether Authority had examined the details of the disputed transactions and quantum of compensation payable to 229 subscribers. Vide IDM dated 10.02.2023, the AO submitted his supplementary report to Member (Investigation and surveillance). Vide IDM dated 21.02.2023, the Member again sought supplementary report from AO providing separately the annexures pertaining to `new subscribers’ and ‘existing subscribers’. Vide IDM dated 03.03.2023, the AO submitted separate annexure 5.1.A and 5.1.B in respect of new subscribers for delay in SCF upload and fund transfer to TB respectively, and annexure 5.2.A in respect of ‘existing subscribers’ for delay in SCF upload and fund transfer to TB. The Member vide IDM dated 30.06.2023 to AO again sought supplementary report on his own observation that Saturday(s), Sunday(s), and holiday(s) falling after the due date as per TAT for SCF upload (T+4) and fund transfer (T+5) do not merit exclusion in computation of delay. The AO vide IDM dated 31.07.2023 submitted his supplementary report to Member (Investigation and Surveillance) and maintained his computation of delay excluding Saturday(s), Sunday(s), and holiday(s) as the assumptions considered in calculations of the delay including holidays according to him have to be maintained in accordance to Annexure A of the Inquiry report dated 23.04.2018.
15. OBSERVATION OF MEMBER (INVESTIGATION AND SURVEILLANCE) DATED 11.09.2023
15.1 The then Member (Investigation and Surveillance), however, further recalculated the delay aspect considering that Saturday(s), Sunday(s), and holiday(s) falling after the due date as per TAT do not merit exclusion in computation of delay and thereby observed that delay in respect of ‘SCF upload’ and ‘Funds transfer to the Trustee Bank’ is significant in terms of number of PRANs impacted and the delay in terms of number of days is quite substantial. Further, assumption of ‘transaction id’ being generated on next day of the SCF upload, does not merit one more day of exclusion in computation of ‘delay in funds remitted to trustee bank’, when T+5 days TAT is already allowed and is an erroneous assumption.
15.2 Accordingly, the Member (Investigation and Surveillance) analysed Annexure 5.1 and Annexure 5.2 of the Inquiry Report dated 12.10.2023 based on the above methodology, and ‘actual delay in SCF upload’, and ‘actual delay in funds transfer to the trustee bank’ and reported as at Exhibit 1 for the ‘New Subscribers’, and Exhibit 2 for the ‘Existing Subscribers’.
Summary of the findings of the then Member (Investigation and Surveillance) is as follows: “Quantum of delay in respect of ‘SCF upload’ and ‘Funds transfer to the trustee bank’ is significant in terms on number of PRANs impacted and the delay in terms of number of days is quite substantial. Further, the conclusion drawn by the AO that the delay is miniscule and no penalty is warranted, does not appear to be correct. It merits imposition of monetary penalty with respect to the violation of TAT, which had resulted in delay in SCF upload (439 transactions in respect of new subscribers, and 65 transactions in case of existing subscribers) and delay in remittance of subscribers’ contribution to the trustee bank (1203 transactions in respect of new subscribers and 1865 transactions in case of existing subscribers) and delay had varied from one day to seven days in ease of new subscribers and one day to 45 days in case of existing subscribers. “
15.3 Vide IDM dated 11.09.2023, the Member (Investigation and Surveillance) submitted the Inquiry report dated 12.01.2023 along with relevant records and supplementary Reports of AO dated 10.02.2023, 03.03.2023, and 31.07.2023 to the undersigned (Whole Time Member (Economics) authorised to impose penalty) in terms of Regulation 11(1) of the PFRDA (Procedure for Inquiry by Adjudicating Officer) Regulations, 2015 (Inquiry Regulations, 2015) for passing the order in accordance with sub-section (3) of Section 30 of the PFRDA Act, 2013.
16. PRESENT PROCEEDINGS: HEARING NOTICE, PERSONAL HEARING AND REPLY AND SUBMISSIONS OF NOTICEES
16.1 A hearing notice dated 15.01.2026 was issued by the undersigned under Section 30(3) of the PFRDA Act, 2013 read with Regulation 11 of Inquiry Regulations, 2015, to the Noticees to take note of the charges framed against them and were provided an opportunity to file reply within 21 days of receipt of the said notice and hearing was fixed for 19.02.2026. The said hearing notice was issued to the Noticees pursuant to AO report dated 23.04.2018, Hon’ble SAT order dated 15.02.2021 and AO’s report dated 12.01.2023 along with supplementary reports of AO dated 10.02.2023; 03.03.2023 and 31.07.2023 and observations dated 01.02.2023, 21.02.2023, 30.06.2023 and 11.09.2023 of the then Member (Investigation and Surveillance). Based on the said documents, following violations/ contraventions were prima facie observed against the Noticees:
a. Allowing unauthorized individuals/ entities to be associated with Noticee No. I for conduct of activities under NPS (with knowledge of other Noticee(s)) especially with Mr. B.Vijay Kumar Reddy, NPS Services and Straddle Infotech, causing loss to subscribers.
b. Failure of the Noticee No. I and other Noticees to supervise and monitor the functions of NPS services, Straddle Infotech with respect to activities undertaken as Aggregator/ POP.
c. Conduct of activities in violation of Regulation for Aggregators under NPS Lite-2010 alongwith guidelines thereof, with regard to opening of collection accounts, by the Noticee No.1 (with knowledge of other Noticee(s) and allowing monies of subscribers to remain unreconciled and (un)segregated, rotation of monies collected from subscribers from one collection account to another without remittance to Trustee Bank.
d. Noticees had conducted themselves in a manner that they failed to segregate the contributions received from subscribers, allowed such monies to be retained in various account, did not take steps to transfer the contributions into the respective individual pension account of the subscribers on a timely basis, thereunder causing loss of investment to such subscribers nor took timely steps to refund the contribution to such subscribers where personal details were not available with the Noticees.
Noticees were also called upon to take notice of the fact that despite the AO’s findings (reports dated 12.01.2023 and subsequent supplementary reports) that delays in SCF upload and fund remittance were minimal, the then Member (Investigation and Surveillance) held the methodology incorrect and observed significant delays impacting 439 transactions in SCF upload and 1203 transactions in fund transfer with delays of up to 6 to 7 days in respect of new subscribers and in 65 transactions in SCF upload and 1865 transactions in transfer of funds with delays up to 45 days in respect of existing subscribers.
16.2 A request for extension of time for filing reply was received from Noticees vide email and letter dated 06.02.2026 to which Noticees vide order dated 11.02.2026 were granted time till 27.02.2026 to submit their written submission and oral hearing was scheduled on 16.03.2026. Noticees vide its email dated 10.03.2026, again sought two weeks’ extension from the date of oral hearing (16.03.2026). Pursuant to the request of Noticees, oral hearing was again extended up to 23.03.2026 vide email dated 10.03.2026. Mr. Kamal Garg, General Manager, Alankit Assignments Ltd as authorised representatives of the Noticees 1 to 5 and the Presenting Officer of the Authority appeared for an oral hearing in the matter on 23.03.2026. Noticee No.5, Mr. Harish Chandra Agrawal was also present in the hearing.
16.3 Earlier the representative of the Noticees made a request for certified copies of the AO Inquiry Report dated 12.01.2023 and all supplementary reports dated 10.02.2023, 03.03.2023, and 31.07.2023, and all internal memoranda/notes dated 01.02.2023, 21.02.2023, 30.06.2023, of the Member (Investigation and Surveillance), and computation worksheets relied upon. The said documents were duly certified, scanned and mailed to Noticees on 03.03.2026. Post receipt of the same, the Noticee on 07.03.2026 sought excel format of information which was already provided along with notice as far back as on 15.01.2026. All documents germane, received as is basis, for the present proceedings were duly provided to the Noticees.
16.4 The representative of the Noticees during the course of hearing submitted detailed written submissions on behalf of all the Noticees and further requested that all prior submissions made in this matter in the earlier round of proceedings be also considered.
16.5 During the course of oral hearing, answer to some queries were sought from the Noticees which inter alia pertained to status of police complaint stated to have been filed by Noticee No.1 against Mr. B. Vijay Kumar Reddy, whether Noticees had made any payments to Mr. B. Vijay Reddy or NPS Services in connection with NPS, how the NLCC Code was obtained and used by Mr. B. Vijay Kumar Reddy/ NPS Services. To the said queries Noticees submitted that no payments were made by the Noticee to Mr. B. Vijay Kumar Reddy/ NPS Services in connection with NPS and that the status of the police complaint is not presently available but offered to inquire and inform the Authority at the earliest. However, the Noticees did not provide any information in this regard until now. Regarding allegation (d) Noticees further pointed out certain data inconsistencies in the transaction sheets provided along with the hearing notice dated 15.01.2026. It was stated that the revised computation relied upon by the Authority suffers from serious factual and methodological defects including non-exclusion of weekends and public holidays; incorrect determination of the trigger date (“T”), collapse of the regulatory sequence between T+4 and T+5 timelines, reliance on internally revised tabulations unsupported by verifiable transaction data and inconsistencies between the Authority’s records and the Noticees’ documented transaction history.
16.6 Noticees further requested for transaction-wise delay computation sheet and system timestamps relied upon, so that the Noticees can demonstrate transaction by transaction that the applicable TAT was complied with when computed according to the governing clause and business-day framework. That any alleged delay in remittance of subscribers’ funds is attributable to Trustee Bank-side processing, bank holidays, or CRA/system constraints. Imposing penalty on the Noticees without establishing controllability/attribution would be arbitrary and disproportionate.
16.7 The Noticees stated that they have no further submissions to make in this matter, both oral and in writing.
16.8 The gist of the submissions common reply on 27.02.2026 vide email and further written submission on the day of the hearing i.e., 23.03.2026. is as under:
16.9 At the outset, the Noticee made certain legal submissions pertaining to limited scope of the present proceeding due to Hon’ble SAT order, against retrospective application of PFRDA regulations and that the penalty proceeding should be for deliberate conduct and not for bonafide conduct or technical issue and that any penalty must conform to statutory factors in section 30(3) which are absent in the present matter. Further it was submitted that the Hon’ble Supreme Court has cautioned against automatic vicarious liability on directors without a statutory mandate and specific role attribution and that penalty under section 28(4) can only be imposed on a person registered as ‘intermediary’ and not on “an individual”.
16.10 Noticees have not made any fresh submissions with respect to allegation (a), (b) & (c) of the hearing notice dated 15.01.2026 in its written submission dated 23.03.2026 except that these allegations are beyond remand corridor of the SAT and therefore, are not maintainable.
16.11 Further, the Noticees vide their written submission dated 23.03.2026 have assailed the computation of delay on the ground that it is vitiated by factual inaccuracies and methodological defects. It has been submitted that the data relied upon for computation is incomplete and contains material discrepancies, including missing transaction records and inconsistencies between the Authority’s records and those maintained by the Noticees. It has further been contended that the revised computation erroneously disregards intervening public holidays and weekends while calculating the TAT, thereby inflating both the number of delayed transactions and the period of delay. According to the Noticees, in several instances the due dates for SCF upload (T+4) and fund transfer (T+5) have incorrectly been treated as falling on the same date, resulting in an artificial increase in the alleged defaults. The Noticees have also submitted that several transaction groups require re-computation after excluding nonworking days and that a number of the alleged delays are attributable not to them but to downstream processes at the CRA, Trustee Bank or system-level processing beyond their control. They have further pointed out discrepancies in the transaction dates reflected in the Authority’s records, particularly in respect of existing subscribers, and have contended that the revised methodology departs from the computation earlier adopted by AO who had appropriately accounted for public holidays.
17. BRIEF OF SUBMISSIONS MADE BY PRESENTING OFFICER
17.1 PO vide her reply dated 15.04.2026 in response to submissions of the Noticees submitted that for the period 2010-2015, no methodology for computation of delay was specified by the Authority. Regarding methodology for computation of delay for the relevant period and how it evolved till present, PO has inter alia made the following submissions:
i. For the period 2010 to 2015, as per Annexure II to the Guidelines under the Regulations 2010, provided for weekly upload of contribution data by Friday (EOD) and remittance to the Trustee Bank by the following Monday. However, no specific methodology for computation of delay was specified, nor was any distinction drawn between new and existing subscribers. Further, Authority has also provided the relaxation of 30 days for SCF upload and Fund Transfer for the contribution received till 31st March considering the issues at grass root level and reconciliation of the same.
ii. For the period 2016 to 2025, a more structured TAT framework was introduced, prescribing T+4 days (maximum) for both SCF upload and fund transfer, with “T” being defined as the date of receipt of contribution. The clarification indicates that working days were to be considered for computation of TAT, thereby implying exclusion of weekends and public holidays. However, no explicit provision was made regarding the treatment of non-working days for the purpose of delay computation.
iii. For the period 2026 onwards, the methodology has been explicitly clarified that the working days are to be considered for calculation of T and the specified TATs indicate the maximum timeframe specified for particular activities.
i. For the purpose of computation of TAT, non-working days shall be excluded, whereas,
ii. For the purpose of computation of compensation for the delayed period, non-working days shall be included.
17.2 Further, the PO has submitted that the missing transaction data forms part of the available records and that the computation has been revised after considering the objections raised by the Noticees regarding public holidays, weekends and other computational anomalies. The PO has accordingly recalculated the delays by factoring in the relevant non-working days and rectifying the computation of due dates.
17.3 In so far as the discrepancies in transaction dates are concerned, the PO has stated that the relevant dates have been verified with the CRA and, therefore, no further modification is warranted. With regard to existing subscribers, the PO has submitted that the ‘fund receipt dates’ adopted are consistent with those relied upon by the AO in the Inquiry Report dated 23.04.2018 based on data furnished by the NPS Trust.
17.4 PO undertook a recalculation of the delays reflected in Exhibits 1(A)(i), 1(A)(ii), 2(A)(i), and 2(A)(ii) shared in the observation of Member (Investigation and Surveillance) in his report dated 11.09.2023 which was derived from annexure 5.1 (new subscribers) and 5.2 (existing subscribers) of AO’s Inquiry report dated 12.01.2023, based on the following assumptions:
i. The applicable TAT has been considered as T+4 days for SCF upload and T+5 days for fund transfer, which is consistent with the TAT derived from the 2010 guidelines by the AO in Inquiry Report dated 12.01.2023.
ii. In carrying out the recalculation, public holidays and weekends falls within the TAT have been duly considered. At the same time, subsequent non-working days were included in computation of delay.
iii. In certain cases, the PRAN generation date falls on a Saturday. In such instances, ‘T’ has been considered from the next working day. Further, subsequent Saturdays and Sundays falling within the specified TAT of T+4 and T+5 have been duly accounted for as per the submission of noticee, and with the logic that the intermediaries would have access to the relevant data on the next working day, and therefore, the full benefit of the specified TAT in terms of working days is to be provided.
17.5 It has been further submitted that a majority of the transactions, where delays were reported in the Member (Investigation and Surveillance)’s observations, pertained to the month of April in 2014 and 2015. During this period, extended weekends occurred on account of public holidays such as Dr. Bhim Rao Ambedkar Jayanti, Good Friday, and Mahavir Jayanti and also the substantial number of SCFs were uploaded during this period. Accordingly, upon factoring in these public holidays along with weekends, the extent of delays is significantly reduced. Further, the additional timelines for SCF upload and fund transfer were extended up to 30th April for contribution received till 31′ March for the purpose of considering Government co-contributions, in view of operational challenges at the grass root level.
17.6 Accordingly, PO recalculated and arrived at following conclusion in her written submission dated 15.04.2026:
For new subscribers, delays in SCF upload were initially reported at 439 transactions but revised to 36, while delays in fund transfer reduced from 1203 to 214. For existing subscribers, delays in SCF upload were reported at 65 and revised to 36, and delays in fund transfer were significantly reduced from 1865 to 36.
Overall, the revised calculations substantially lower the number of delayed transactions across both categories. It has been clarified that these delays are derived only from the specific serial numbers specified under the relevant exhibits annexed derived from Annexure 5.1.A and Annexure 5.1.B and Annexure 5.2.A by Member (Investigation and Surveillance).
PO has not made any submission on the legal issues raised by the Noticees in their reply dated 27.02.2026 and written submission dated 23.03.2026.
18. CONSIDERATION OF LEGAL SUBMISSIONS
18.1 Scope of the proceeding was fixed by the SAT and order dated 02.05.2022 passed by Member authorised to impose penalty – Binding effect of Appellate directions: Judicial discipline must prevail.
Before delving into the other contentions raised by the Noticees, it is important to firstly deal with the legal objections raised. In this regard, a bare reading of the said order dated 15.02.2021 passed by the Hon’ble SAT, more particularly Para 46,47 & 48 thereof (extracted earlier) clearly shows that Hon’ble SAT after hearing the parties at length has held that it is not necessary to go into other issues (viz. the issue of unauthorised association of Noticee No.1 with Mr. B Vijay Kumar Reddy, NPS Services and Straddle Infotech for conduct of activities under NPS, failure to monitor and supervise its activities under NPS, opening of more than one collection account and allowing monies of subscribers to remain unreconciled and segregated, rotation of monies collected from subscribers from one collection account to another without remittance to Trustee Bank) raised in SCN dated 20.10.2017 or the AO’s inquiry report dated 23.04.2018 or the impugned order dated 02:01.2019. Hon’ble SAT then held that the impugned order dated 02.01.2019 cannot be sustained and quashed only the said order. However, the SCN dated 20.10.2017 and the AO’s inquiry report dated 23.04.2018 which found mention in the same line is not quashed.
The said order of Whole Time Member was set aside only on account of non-consideration of NSDL-CRA Circular dated 04.12.2012 and APY Circular dated 27.07.2015 and the AO’s findings qua other aspects as contained in the inquiry report dated 23.04.2018 is not set aside in any manner and therefore stands. As per para 8 of AO report dated 12.01.2023 only (the charge) with respect to the violation of TAT which had resulted in delay of SCF upload and remittance of contribution of subscribers to the TB, may be disposed off, without imposition of any monetary penalty under section 28(4) of the PFRDA Act.”
It is amply clear that the aforementioned circulars relied upon by the Noticees had nothing to do with the issue of relationship, if any, of the Noticees with Straddle infotech or Mr. B Vijay Reddy, rather was harped upon by the Noticee only on the calculation of ‘T’ days and the extended time which was available for upload of SCF and remittance of subscriber contribution into the Trustee Bank account. It is also pertinent to mention that a direction has been given by the Hon’ble SAT to the Member of the Authority to consider only the limited applicability of the said circulars and not on other issue which was kept open. Thus,Ctehretirfieepdort True dated 2304.2018 of the AO has not been nullified by the Hon’ble SAT in any manner especially on the recommendation with regard to establishment of linkage between Noticees and the said unauthorised entity(s).
Thus, the remand is not limited or confined to calculation of days of delay as has been contended by the Noticees and the undersigned has given the opportunity to the Noticees to make their submission on all the aspects for which clear charges have been mentioned in the hearing notice dated 15.01.2026 for sufficient understanding of the Noticees. The erstwhile Whole Time Member (Law) recorded in his order that “limited issue under consideration before him” referred to the NSDL-CRA Circular dated 04.12.2012 and APY Circular dated 27.07.2015 which circular were on the aspect of dealing with the purported delay in SCF upload/ contribution which the Noticee had alleged before the Hon’ble SAT, had not been considered by the Authority. The issue with respect to dealing with unauthorised persons was an aspect which was squarely covered in the AO’s report dated 23.04.2018 and not set aside in any manner in his report dated 12.01.2023.
The undersigned has not reintroduced allegations beyond the remand as argued by the Noticee, rather has given an opportunity to Noticee to respond to the charges of the AO in his report dated 23.04.2018, which is against the Noticee. This has been necessitated as the penalty order dated 02.01.2019 of the then Member (Penalty) has been quashed by Hon’ble SAT but the SCN dated 20.10.2017 and the AO’s inquiry report dated 23.04.2018 is standing in full force and effect qua the relationship between the Noticees and Mr. B Vijay Kumar Reddy/NPS services or Straddle Infotech.
The Noticees have placed reliance on the judgment of the Hon’ble Supreme Court in Union of India v. Kamlakshi Finance Corporation Ltd. 1992 Supp (1) SCC 443 and Bhopal Sugar Industries Ltd. v. ITO AIR 1961 SC 182, wherein it was held that principles of judicial discipline require the order of higher appellate authority should be followed by the subordinate authorities. The undersigned while giving an opportunity of hearing to the Noticee in respect of explaining its relationship with Mr. B Vijay Kumar Reddy and NPS services has acted within the confines of the order dated 15.02.2021 passed by the Hon’ble SAT; as has been discussed in the foregoing paras. The recommendations of the AO on this aspect has not been set aside by Hon’ble Tribunal. The Hon’ble Tribunal has only given a direction to consider the NSDL-CRA Circular dated 04.12.2012 and APY Circular dated 27.07.2015 and consequently set aside the penalty imposed by Whole Time Member as it was felt that the issue with respect to delay of SCF upload and deposit of contribution, beyond the specified timelines, ought to have taken into account these circulars as harped upon by the Noticees. This delay of SCF upload and remittance of contributions is inextricably linked to Noticees’ relationship with unauthorised persons, but that important aspect of relationship has not been directed to be disregarded by the Hon’ble SAT as has been canvassed by the Noticees upon a deliberate twisted reading of the Hon’ble SAT’s order. If the contention of the Noticees were to be accepted then it means that Noticees’ relationship with unauthorised persons is absolutely fine, the recommendations of the AO in his report be disregarded and the Whole Time Member should only see despite such unauthorised relationship, as to whether any delay has occasioned in upload of SCF and contribution. The Noticees in the face of having no credible explanation to offer on their relationship with unauthorised persons who deposited monies into Noticees’ collection account, after having collected from subscribers purportedly under the guise of NPS is now preventing the undersigned from examining the same by raising untenable pleas of lack of remand by Hon’ble SAT.
There, thus arises a situation that if supposingly delay is not established or significant delay is not established then the relationship of Noticee with unauthorised persons which was clearly prohibited by the Authority for the sake of protection of small subscribers becomes justified. The transactions effected through the unauthorised person/entity were not one or two but a staggering number of 8646 while the Noticees have in a cavalier manner said that they don’t know who Mr. B Vijay Kumar Reddy was against whom complaints were received in the Authority and who engaged in making these transactions in Noticees No.l’s bank account by remitting monies. Though the Noticee claimed to have filed criminal complaint against Mr. B Vijay Kumar Reddy with the police authorities in New Delhi and Hyderabad. It is surprising that the Noticee do not know the fate of such complaints and though submitted during the hearing that they will give information on the matter, have chosen to keep quiet. This, itself shows the lack of bonafide on the part of Noticee and their attempt to keep such a relationship under wraps.
18.2 Directors cannot be fastened with automatic civil penalty
Noticees have made a submission that Noticee No. 2 to 5 cannot be proceeded with and the continuation of proceedings against the said Noticees is not maintainable. It has been contended that these Noticees are not separately registered intermediaries under the PFRDA Act. Further, the hearing notice does not identify any specific act, direction, decision or omission attributable to these individuals in relation to alleged operational delays. Further, vicarious liability in regulatory or penal proceedings cannot be presumed merely on the basis of designation, Reliance has also been placed on the observation of the Hon’ble Supreme Court in SMS Pharamaceuticals Ltd. v. Neeta Bhalla (2005) 8 SCC 89, that liability of directors cannot accrue automatically.
Dealing with the submission made by the Noticees above, a bare perusal of section 28 indicates that for the purpose of adjudication, it is not necessary that only registered intermediaries can be proceeded with. The liability arises on a “person” too who is found in violation of the stipulation contained under section 28. This is further clear from a reading of section 30(1) and section 30(2) of the Act which provides that an inquiry can be held against a “person” if he has failed to comply with the provisions of section 28.
Another provision is section 50 of the Act, which provides that where an offence has been committed by the company, every person at the time the offence was committed was in charge of and responsible to the company for the conduct of the business of the company, as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. The proviso provides that such person may not be liable to any punishment if he proves that the offence was committed without his knowledge or he has exercised all due diligence to prevent the commission of such offences. Further, section 50(2) states that where it is proved that offence has been committed with the consent or connivance of any director, manager or other officer of the company, such person shall be liable to be proceeded against and punished. The same principle can be made applicable in respect of civil proceedings under section 28. The Noticees could have taken steps to demonstrate that violations on the part of Noticee No. 1 were committed without the knowledge of any other Noticees if such a factual position ever existed. Even such a plea has not been made by the Noticees supported by any evidence to that effect.
The fulcrum of charge against the Noticee No.1 company is that its dealing with Mr. B Vijay Kumar Reddy, NPS services and Straddle Infotech was not in consonance with the Aggregator Regulations 2010. Further it allowed many collection accounts to be opened which were contrary to the stipulations of the Authority as provided in the said regulations. The Company is a juristic person which acts through persons and more importantly it’s the directors and collectively the Board which is the brain and heart of the company. In the first instance, it is to be believed and presumed that all the actions of the company are guided by the collective wisdom of the directors who have the greatest stakes in the affairs of the company. Accordingly, the AO issued the notice to the company and directors as is found in notice dated 20.10.2017 and para 2.3 of the inquiry report dated 23.04.2018. The Noticee No. 2 to 5 have not been able to discharge the burden of proof cast upon them and the burden has not shifted on the Authority at any time. In so far as the judgment of the Hon’ble Supreme Court has been relied upon by the Noticee, it can be seen from SCN dated 20.10.2017 issued by the AO to the company and its directors, the Noticee No. 2 to 5 have been duly informed of the alleged infractions and the presumption against them arising out of conduct of the Noticee No. 1 company and averments exist to that effect. In reply thereto, the said Noticee have raised vague and ambiguous arguments, not meeting the allegations against them and have failed in shifting the burden upon the Authority. Therefore, all the Noticees are complicit and have acted together in the alleged violations.
18.3 Applicable law does not permit retrospective imposing of later obligations The Noticees have placed reliance on the judgment of Hon’ble Supreme Court in the case of CIT v. Vatika Township Pvt. Ltd. (2015) 1 SCC 1 and in Govind Das v. ITO (1976) 1 SCC 906 to buttress its arguments that events substantially pertained to a period before or around the coming into force of the PFRDA (Aggregators) Regulations 2015 and that a regulation creating fresh obligations or exposing a person to adverse consequences cannot be applied retrospectively unless such intent is clearly expressed.
With reference to the submission made by the Noticee, it is significant to note that the Authority was established as an interim regulator vide GoI resolution dated 10.10.2003 and 14.11.2008 and under the said resolutions, the Central Government empowered the Authority to regulate the pension market. One of the facets of regulatory power is to lay down regulations and grant registration and to see that the regulated entity conducts its activity within the framework of regulations. In the present case before coming into the effect of PFRDA Act, 2013 and the PFRDA (Aggregators) Regulations, 2015 the aggregator regulations of 2010 governed the field. Both these regulations in interest of subscribers clearly laid down as to what a regulated entity ought to do in respect of its activities under NPS including as to whom they could be associated with, the process of opening of individual pension account of subscribers, the upload of documents and the manner of collection of contribution and its remittance. The Noticees were alleged to be in breach of both the regulations i.e., of 2010 and 2015 (post notification of PFRDA Act, 2013). While the Noticee No. 1 was registered under 2010 regulations, post notification of the regulations in 2015, it again made an application, seeking registration under the 2015 regulations, admittedly knowing that it was in breach of 2010 regulations and continued to do so. Thus, there is no retrospective applications of regulations. Both the regulations contained certain prohibitions like not dealing with unauthorised persons to protect the sanctity of the pension sector and subscribers’ pension corpus, which was continuously breached by the Noticee No. 1 from December 2013 to April 2015 i.e., before passing of PFRDA Act and even post passage of PFRDA Act and its coming into effect on 01.02.20214. So, the argument that PFRDA (Aggregators) Regulations 2015 were retrospectively made applicable holds no ground. Further, it is pertinent to extract section 56 of PFRDA Act 2013 —
“56. Savings.—Anything done or any action taken by the Interim Pension Fund Regulatory and Development Authority and Central Government under the Resolutions of the Government of India in the Ministry of Finance number F. No. 5/7/2003-ECB&PR, dated the 10th October, 2003 and F.No.1(6)2007PR, dated the 14th November, 2008 and notification number F. No. 5/7/2003-ECB & PR, dated the 22nd December, 2003, shall be deemed to have been done or taken under the corresponding provisions of this Act.”
This shows that the Noticees cannot be allowed to take refuge by saying that laws have been retrospectively made applicable. The breach and violation on the part of the Noticees was of continuous nature from December 2013 to April 2015 and allowed to perpetuate wilfully till the Authority discovered the same.
18.4 Penalty cannot be imposed for mere technical or venial breach
Further, Noticee has submitted that AO while levying penalty ought to be mindful of the fact that the penalty may not be imposed merely because it is lawful to do so and that imposing penalty is matter of discretion of authority to be exercised judicially and on consideration of all relevant material. Where there is venial breach of provisions of the Act, the Authority will be justified in refusing to impose penalty for which Noticee referred to the judgements of the Hon’ble Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa (AIR 1970 SC 253).
Technical breach may be understood to mean a case of mere non-compliance that does not affect public interest or market integrity, or procedural violations that are promptly corrected. However, failing to exercise necessary vigil and due diligence on the fund collection system and allowing unauthorised entity(s) to collect funds from subscriber is in direct contravention of the express provisions of the Regulations, 2010 which is not mere technical or procedural or venial breach. Further, substantial amounts remained parked in multiple collection accounts due to lack of segregation and reconciliation. The Noticee itself admitted that the monies continued to remain in such accounts for want of proper segregation. These are not the cases of mere technical breach, especially when the breach persisted for so long.
18.5 Proportionality and Article 14- imposition of penalty of Rs. 9,00,590/- is arbitrary.
The Noticees have submitted that the proposed penalty of Rs. 9,00,590 is manifestly disproportionate to nature of the alleged conduct. Noticee have placed reliance on the judgment of Hon’ble Supreme Court in the case of Om Kumar v. Union of India AIR 2000 SC 3689 wherein the punishment imposed was tested against the wednesbury principles/rules i.e., whether relevant factors have not been considered or whether irrelevant factors were considered or whether the punishment is one which no reasonable person could have imposed in given circumstances.
It is observed that the penalty amount of 24,00,590/- has not been determined on an arbitrary basis. Rather, it has been computed in accordance with the objective methodology stipulated under the Guidelines for Operational Activities – to be followed by Aggregators dated 01.01.2016, whereby a sum of 210 per day is levied for each day of delay in uploading the SCF and processing the contributions. The methodology thus establishes a rational and objective nexus between the duration of the default and the quantum of penalty, ensuring that the penalty is proportionate to the extent of the delay. Consequently, the quantum of penalty cannot be regarded as arbitrary or disproportionate, as it varies directly with the period of default.
The amount so computed is imposed as a penalty and not as compensation. It was only on 01.01.2016 that compensation mechanism was laid down. During the relevant period, the Regulations of 2010 and the Guidelines issued thereunder did not contemplate a separate mechanism for payment of compensation to subscribers on account of delayed remittance of contributions. Instead, they empowered the Authority to impose a monetary penalty for such defaults. The Authority adopted an objective computation methodology by linking the penalty to the number of days of delay at a fixed daily rate. This approach ensured that, although the levy retained its character as a regulatory penalty, its quantum remained fair, transparent and proportionate to the gravity of the default, rather than being fixed arbitrarily.
Further, the separate penalty of 21,00,000/- imposed on each of the Noticees pertains to their acts and omissions constituting violations of the provisions of the PFRDA Act, the regulations and guidelines made thereunder. The imposition of this penalty is based on the repetitive nature of the defaults and the failure on the part of the Noticee No. 2 to 5 in preventing the breaches and violation committed by Noticee No. 1.
18.6 Natural Justice has been breached: Material relied upon has not been properly supplied Noticees have submitted that non furnishing of complete and usable copies of spreadsheet/ worksheet containing the disputed transactions and delay computation, complete transaction logs showing date of PRAN generation, SCF upload, fund transfer initiation and match and book date, internal memoranda relied upon amounts to violation of principle of natural justice. Further, Noticees have placed misplaced reliance on the judgement of Hon’ble Supreme Court in the case of Dhakeswari Cotton Mills ltd. v. CIT AIR 1955 SC 65 in which case the Hon’ble Court had set aside the order of Tribunal for failing to disclose to the assessee/ appellant the information supplied by departmental representatives; not allowing the assessee to rebut the material furnished to it and for disallowing the materials the assessee wanted to produce in its defence, thereby failing to give fair hearing to the assessee. Further, Noticees have relied on the judgment of the case in Kishinchand Chellaram v. the Commr. of Income tax, Bombay AIR 1980 SC 2117 wherein the court held that the letters not disclosed to the assesse cannot be used against him in the proceeding.
Based on the facts and circumstances of the matter, the judgment cited are not squarely applicable. All the material relied upon have been supplied to the Noticees along with the hearing notice dated 15.01.2026. Proper and fair opportunity of hearing has been given and Noticees have been allowed to present any additional materials that they think could bolster their defense.
It may be pertinent to note that the Noticees themselves are the originator of the information pertaining to the disputed transactions i.e., date of PRAN generation, SCF upload, fund transfer initiation and match and book date. Moreover, all the materials relied upon in this proceeding have been disclosed to the Noticees and only the spreadsheet/ excel format of the said information and consequent computation was not provided only in interest of integrity of data. It is not a case of non-provision of information only that excel sheet i.e., soft copy of figures was not provided where hard copies were made available along with hearing notice and subsequently upon asking even certified copy of the same was provided. The Noticees were not disabled to question the computations in any manner given the fact that Noticees had all the data as it emanated from the Noticee No. 1 only and the Noticees were not deprived of using the data in any manner. Further, the original data sheet has remained same as was annexed in inquiry report dated 23.04.2018 upon which Noticees have never raised any objections.
18.7 Absence of statutory factors under section 30(3) is fatal to penalty proposal
The Noticees have been submitted that Section 30(3) is not a mere formality but mandates consideration of factors such as disproportionate gain, subscriber loss, and the repetitive nature of defaults. According to them, in the present case, none of these elements are established as there is no allegation or evidence of wrongful enrichment, diversion of funds, actual subscriber loss, or any wilful or repeated misconduct. At most, the matter involves disputed date computations within a complex, high-volume operational framework involving multiple intermediaries. In the absence of statutory aggravating factors, the imposition of a substantial penalty is unsustainable. Further it has been submitted by the Noticee before then Whole Time Member (penalty) that despite there being no complaint from any of the subscribers, the AO in his inquiry report dated 23.04.2018 still have recommended penalty of 9,00,590/- on account of notional loss sustained by the subscriber.
The Hon’ble Supreme Court in the matter of Adjudicating Officer, SEBI v. Bhavesh Pabri (2019) 5 SCC 90 has held that absence of the factors specified in Section 15J of the SERI Act, 1992, namely disproportionate gain, loss to investors, or repetitive nature of default, (which are the same factors to be considered under PFRDA Act, 2013) does not preclude imposition of penalty under the SEBI Act. The factors are illustrative and relevant only to determination of the quantum of penalty. Therefore, they are not mandatory preconditions for levy of penalty
Further, regarding the absence of deliberate or wilful conduct, the Hon’ble Supreme Court in the case of Chairman, SEBI v. Shriram Mutual Fund & Another (2006)5 SCC 361 has held that to impose mandatory penalties upon regulatory breaches, the presence of mens rea is not a prerequisite for such penalties under SEBI’s Chapter VI-A provisions otherwise this will amounts to conflating civil penalties with criminal proceedings and undermining SEBI’s regulatory framework by allowing entities to escape penalties based on intent or hardship. The power of SEBI under the said provisions of SEBI Act, 1992 appears to correspond to the power of PFRDA under chapter VIII of PFRDA Act, 2013. The present proceeding is being adjudicated upon, under the said chapter of PFRDA Act, 2013.
Further, absence of any actual loss to subscribers does not constrain the Authority to impose penalty on the Noticees for violating their statutory obligations. In order to safeguard the integrity of the pension system and protect subscriber interests, especially in cases where the subscribers affected belong to economically disadvantaged sections of the society, duty is cast on the Authority to ensure strict compliance with PFRDA Act and regulations, guidelines made thereunder.
A contrary interpretation would defeat the very purpose of regulation. If regulatory action were contingent upon proof of actual financial loss, entities could disregard compliance obligations with impunity so long as no immediate loss is detected. Such an approach would undermine market discipline, weaken subscriber protection mechanisms, and expose subscribers to future risks.
It is a settled principle that violations of express regulatory provision may warrant imposition of penalty despite absence of actual loss. The concept of ‘loss’ in financial sector should not be confined to actual monetary loss. Delays in crediting contributions, failure to maintain proper records, non-reconciliation of subscriber funds, operational lapses, or violations of express provisions of regulations may expose subscribers to risk by depriving them of timely investment benefits.
18.8 The Notice fails to specify the name of the allegedly unauthorised person/entity; the dates; the exact subscriber transactions; the specific statutory/regulatory clause breached; and the evidence relied upon.
Noticees have submitted that the allegations contained in the notice are vague and non-specific as the exact statutory provision, the precise transaction, date and nature of actionable misconduct, evidence linking to it and actual subscriber loss are not identified in the said notice. In this regard, it is observed that the hearing notice dated 15.01.2026 precisely mentions all the allegations that are required to be met by the Noticees, in an unambiguous manner. The transactions under question are those emanating from `NPS Services’ and from a particular NLCC code being “NPS040926E”. Mr. B Vijay Kumar Reddy or NPS Services is unauthorised to collect monies from subscribers under the NPS and the fact of having undertaken around 8646 transactions from December 2013 to February 2015 with an unauthorised entity provides an adequate linkage with Noticees of having violated provisions of Regulations 2010 and 2015 and consequently, the PFRDA Act, 2013, by failing to exercise its oversight on the fund collection process.
19. CONSIDERATION OF ISSUES
19.1 In the present case, it is pertinent to appreciate the role of aggregator in NPS Lite/ Swavalamban scheme which has been comprehensively laid down in the Regulations for aggregators under NPS Lite, 2010. NPS Lite was envisaged as a model specifically designed to bring NPS within easy reach of the economically disadvantaged sections of the society. NPS Lite was made extremely affordable and viable by optimizing the functionalities and making it available at reduced charges. NPS Lite was expected to reach to its target population through specific entities namely “aggregators” who would enrol their underlying subscribers in NPS Lite as groups.
19.2 Under three tier NPS Lite architecture, each aggregator had to register one of its offices as oversight (NL-OO) of NPS Lite to undertake monitoring and control of operations being performed by its underlying offices. Aggregator was also expected to register its own underlying office(s) as NL-AO, who shall upload contribution on CRA Lite system and effect fund transfer to Trustee Bank. On successful registration, a unique registration number, I-PIN (Internet PIN) is allotted to each office of the aggregator who is designated to function as oversight and uploading offices. Further, collection centres (NL-CC) were registered who acted as interface with subscribers and performed key functions relating to collection of registration forms, undertaking KYC, contribution collection and passing the contribution information and funds to the NL-AO for further processing. The NL-CCs were required to be authorized by the respective NL-AOs to which they are linked. The subscribers were required to fill in the necessary details in the Application for allotment of PRAN (NL-S1) and submit it to NL-CC who verifies the forms before submission to NL-AO. NL-AO then consolidate NLCC wise forms and submit it to CRA-FC. In case NLOO is submitting the forms, then the forms shall be consolidated NL-AO wise before submitting it to CRA-FC.
19.3 Under the NPS-Lite—Swavalamban scheme, which was discontinued following the launch of the Atal Pension Yojana (APY) on 09.05.2015 (operationalised from 01.06.2015), contribution processing involved a combination of manual and system-based processes during the evolving phase of the NPS architecture. Consequently, certain contributions remained unreconciled due to operational challenges in validation and reconciliation of subscriber records. To safeguard subscribers’ interests, the Authority has consistently required the concerned Points of Presence (PoPs) to reconcile such pending balances, which continue to be monitored through periodic compliance and audit reports submitted to the Authority. Further, Regulation 13 of Aggregator Regulations 2010 provided that for failure by aggregators to meet the responsibilities entrusted and to maintain the standard of service expected from them or if they act in a manner contrary to the interest of the subscribers in the opinion of PFRDA, PFRDA shall lay down necessary provisions for imposing penalty on such aggregators.
Allelfation a) and b)
19.4 With respect to allegation a) and b) regarding unauthorised association of Noticee No. 1 with Mr. B Vijay Kumar Reddy/ NPS services and Straddle Infotech and its failure to monitor its activities under NPS, the monitoring framework has been clearly defined in relevant provision under Annexure II guidelines in Supplement to “Regulations for Aggregators under NPS Lite-2010, more particularly regulation 12.4 of the said regulations which is extracted hereunder: “12.4: The oversight office of the aggregators would ensure necessary vigil and due diligence on the entire fund collection process and shall remain responsible for the same.”
19.5 It is observed that the Noticees have no credible explanation to offer on their relationship with unauthorised persons who deposited monies into Noticees’ collection account, after having collected from subscribers purportedly under the guise of NPS. Noticees have made following submission in so far as association with Mr. B Vijay Kumar Reddy and monies received in NPS collection account from NPS services are concerned.
19.6 In its reply dated 23.11.2017 before AO, association with Mr. B Vijay Kumar Reddy was restricted to running TIN facilitation center to carry out activities like acceptance of PAN, TAN, e-TDS, TCS AIR, Returns, PAN authorisation and digitization of paper return. The letter used by him was a forged one and “NLCC code- NPS040926E” was wrongly inserted in the same, which code, in fact was obtained by Noticee no. 1 for its Hyderabad Regional Office.
19.7 In its written submission dated 26.11.2018 before Whole Time Member (Penalty), Noticee contended that they believed that B. Vijay Kumar Reddy was facilitating the subscribers in submission of details and transferring contribution towards NPS accounts and NPS services had transferred funds and subscriber details but the same was not done as their aggregator or POP.
19.8 The fact of Noticee No. 1 receiving monies in NPS-Lite collection account from ‘NIPS services’ is a matter of record (as provided by the Noticees themselves) and requires no further proof. However, there is no evidence on record for proving the facts of Noticees having pocketed commission by collecting certain amounts from subscribers as subscription towards NPS, while only remitting lesser amounts into the PRAN and the fact of Noticees having collected security deposits from individuals to work for him. It appears that this aspect of the complaint was not probed. Further, it has been admitted by the Noticee No. 1 in its letter dated 01.02.2016 to the Authority (forming part of the record of the present adjudication proceeding), that they have discontinued/ closed all the entities operating as PoP-SPs but are continuing with its company owned branches and Regional offices all across the Country, which only indicates that the Noticees had several entities operating as PoP-SPs, other than what was permitted.
19.9 What is worth noting is that the fact of these conduct by unauthorised persons did not even raise an alarm or concern in the minds of the Noticee that a person otherwise not authorised by it to collect monies from subscribers is sending monies in Noticees’ collection account since December 2013. Further, Noticees have sought to extend its post facto action of filing police complaint against Mr. B Vijay Kumar Reddy, issuance of public notice as a defence for having failed to ensure ‘necessary vigil’ and due diligence on the fund collection process. Had noticees exercised ‘necessary vigil’ which is supposed to be a continuous exercise, it would have known this mis-selling and unauthorised dealing at the earliest or perhaps the Noticees turned a blind eye to these unauthorised activities wilfully. In fact, the said entity viz., NPS services and Straddle Infotech made 8665 transactions crediting around Rs. 93.41 lakhs into the collection account of the Noticee No.1 and one is left to fathom as to how the Noticees can claim ignorance of such humongous number of transactions. In the facts and circumstances, it is significant that Noticee No. 1 and other Noticees had an association with Mr. B Vijay Kumar Reddy, NPS services and Straddle Infotech and untenable pleas have been raised by the Noticees which appears to be a cover up, when being specifically questioned by the undersigned as to what is the fate of the criminal complaints stated to have been filed by Noticees with Police Authorities in Delhi and Hyderabad against Mr. B Vijay Kumar Reddy and his companies/firms. Noticees could not give any status or credible information with respect to such complaints allegedly filed by it. It is very strange as to how the Noticees have stated to have filed a criminal complaint and are not aware of its fate when it is trying to disassociate itself from the activities of Mr. B Vijay Kumar Reddy. Further when the proceedings against the Noticees have been ongoing since 2016, it is difficult to understand as to how the Noticees are not aware of the fate of such criminal complaints. This clearly belies the defense set up by the Noticees in vain of denying any relationship that the Noticee No. 1 company had with the unauthorised persons with the active knowledge and consent of other Noticees.
19.10 As aforementioned, Regulations 2010 read with its guidelines made thereunder cast in explicit terms the obligation on the oversight office to monitor cash collection and deposit on a daily basis, which Noticees have clearly failed to discharge. In this regard, the finding of AO vide his inquiry report dated 23.04.2018 as summarised below, appears to be correct:
“The Noticees’ attempt to deny any substantive relationship with NPS Services and Mr. B. Vijay Kumar Reddy is not tenable. As evidence on record shows that substantial amounts (Rs.61,15,000/- from 01-01.2015 to 06.04.2015 and Rs. 32 lacs (approx) prior to 2015) were routed through NPS Services and accepted and remitted by the Noticees. The existence of operational linkages, including references on websites (website of Straddle Infotech and NPS services reflecting Mr. B Vijaykumar Reddy as an authorized service provider for Noticee No. 1 as NLCC, POP-SP), certificate issued by Noticee No. 1 showing NLCC/POP-SP code, coupled with the failure to produce original documents to substantiate claims of forgery indicates otherwise. Further, it is implausible that repeated deposits by a third party into the collection accounts could have occurred without the knowledge and acquiescence of the Noticees. Thus, oversight office of Noticee No. 1 has failed to supervise, monitor the functions of the entity with respect to the activities undertaken as an Aggregator/POP.”
19.11 The transactions under question are those emanating from `INIPS Services’ and from a particular NLCC code being “NPS040926E”. Mr. B Vijay Kumar Reddy or NPS Services is unauthorised to collect monies from subscribers under the NPS and the fact of having conducted around 8646 transactions from December 2013 to February 2015 with an unauthorised entity provides an adequate linkage with Noticees of having violated provisions of Regulations 2010 and 2015 and consequently, the PFRDA Act, 2013, by failing to exercise its oversight on the fund collection process.
19.12 However, it is noted that as per para 10.12 and 10.13 of AO’s inquiry report dated 23.03.2018, the penalty under section 28(4) of PFRDA Act is imposed on the ground that “the Noticees had conducted themselves knowingly in a manner, such that they failed to segregate the contributions received from subscribers, allowed such monies to be retained in various current accounts opened for the purpose, did not take steps to transfer the contributions into the respective individual pension account of the subscribers on a timely basis, thereby causing loss of investment to such subscribers, nor took any timely steps to refund the contributions to such subscribers, whose personal details were not available with the Noticees. The Noticees also failed to adhere to the TAT specified for collection and remittance and allowed debits from its accounts, which were not permitted.” Further it is recorded therein that in respect of all such acts of omission and commission, the Noticees attributed the responsibility to Shri B. Vijay Kumar Reddy.
19.13 It is observed that as it emerges from the facts that there was indeed issue of reconciliation of monies collected from subscribers by/on behalf of Noticees No.1 and monies were wrongly collected in multiple collection accounts. Notwithstanding the fact that Noticees have claimed that they have no association with NPS services, it has not been established whether any monies collected by NPS Services from the subscribers or prospective subscribers failed to find its way into the NPS or there has remained any collections in the account of the Noticee No.1 without segregation, which has resulted into an undue advantage to the Noticees, and to the simultaneous detriment of the subscribers. Thus, it appears that the ingredients of Section 28(4) to get attracted have been lacking on an application of preponderance of probabilities in the inquiry report dated 23.04.2018. In so far as penalty under section 28(4) of the Act is concerned, the said section has limited scope and it provides for penalty when an ‘intermediary’ fails to segregate clients’ monies. While Noticees have allowed monies to be retained in various collections accounts (not permitted by the Authority), but based on available material on record as was collected during the fact finding exercise undertaken during the period, it cannot be said with any definiteness that the monies collected by NPS services/Mr. B Vijay Kumar Reddy were lying unsegregated in the Noticee No.ls’ collection accounts. Therefore, on account of lack of credible evidence the imposition of any penalty under section 28(4) upon the Noticee No.1 does not appear to be attracted.
Allegation c)
19.14 With respect to allegation c) regarding opening of more than one collection accounts by Noticee No. 1 and rotating such funds from one collection account to another without remittance to the Trustee Bank are in violation of Regulations 2010 read with guidelines in Supplement to “Regulations for Aggregators under NPS Lite-2010. The relevant provision under Annexure II guidelines in Supplement to “Regulations for Aggregators under NPS Lite-2010 are extracted hereunder:
“Pooling of Contribution in Aggregator’s Bank Account-
i. An aggregator will open a Current Account with a scheduled bank titled “Agerekator Organisation name NPS Lite Collection Account.”
ii) The aggregator account will be non-withdrawable account with an option to transfer the fund into NPS Trust account only.”
19.15 The fact of opening more than one collection account and allowing unusual debits from such accounts which otherwise were supposed to be non-withdrawal account are not disputed by the Noticees. Noticees have sought to justify its action by making following submissions pertaining to operational challenges faced by them:
i. opening of more than one collection accounts was done for quick clearance of cheques of the subscribers and for giving wider choice to the subscribers who are located at such place where some bank may not have a branch.
ii. no amount other than subscribers’ contribution has/had ever been deliberately received in these accounts
iii. online deposit facility was initiated to enable subscribers to deposit even on the last day without having to approach aggregator office located at distant place.
iv. all accounts were non withdrawable and debit entries only represented the transfer to NPS trust account or refund of unreconciled amount on account of discrepancy in subscribers’ particulars.
19.16 It is observed that admittedly, the noticees have opened more than one collection account, online deposit facility and have made some debit entries from such collection accounts in contravention to the stipulations under Aggregators regulation 2010 and guidelines made thereunder and without approval of Authority. Further, regulation 12.2 of Aggregators Regulations 2010 explicitly lays down that it is the ‘collection centres'(NLCC) who were mandated to transfer the amount collected from subscribers in the collection account.
19.17 The requirement of having a single collection account was stipulated to ensure that reconciliation issues don’t happen to the detriment of a subscriber in respect of the individual contribution received. This was to ensure that contribution reached CRA timely and contributions also reach into the account of the NPS trust, maintained with the Trustee Bank timely. Unless there is a sync between the two, the subscribers may not get the advantage of timely contribution while the Noticees have stated that there is efficacy in having multiple collection accounts they have not given even one shred of evidence to buttress their contention. Further, the whole case enlists the multiple delays occasioned due to reconciliation issues. The submissions made by the Noticee though, appears to be attractive as per them, but the actual situation at the ground level indicates otherwise. The Noticees thus have violated the requirement of the 2010 regulations and the guidelines. Even otherwise the Noticees have not demonstrated whether they ever took up the benefits of having more than one collection account with the Authority and sought its permission or requested for amendment of regulations or guidelines on this aspect. Therefore, there is no merit in the submission of the Noticees.
Allegation d)
19.18 With respect to allegation d), the TAT has been stipulated under ANNEXURE-II to Guidelines in supplement to “Regulations for Aggregators under NPS Lite-2010” which is extracted hereunder and further drawing from PO’s submission:
“Remittance of subscriber contribution amount to NPS Account—
Data in respect of contributions collected during the week must be uploaded on the CRA system on Friday before EOD. Corresponding remittances must be credited to the NPS account held with Trustee bank by the next Monday.
Other timelines specified by PFRDA as per operating guidelines and as listed below should be strictly adhered to.”
19.19 For calculation of delay in 8646 transactions in respect of both new subscribers and existing subscribers, post order dated 15.02.2021 of the Hon’ble SAT, the reference date ‘T’ was modified from ‘fund receipt date’ (as contained in AO inquiry report dated 23.04.2018) to the `PRAN generation date’ only for new subscribers. While for existing subscribers, ‘T’ being fund receipt date did not change.
19.20 It is observed that, although the Noticees previously submitted before AO and the then Whole Time Member in the year 2018 that 6,295 cases relate to New Registration, where the PRAN generation TAT is itself T+7 to 10 days in addition to the TAT for SCF upload and fund transfers, and that 2,351 cases relate to contributions made during the financial year-end closures of 2013-2014 and 2014-15, during which the Authority granted a 30-day relaxation for the closure periods of FY 2013-14 and FY 2014-15, these submissions were not addressed in either the AO’s inquiry report dated 23.04.2018 or the order dated 02.01.2019 issued by the then Member (Penalty).
19.21 However, even though the Noticees have earlier made this submission about the PRAN generation TAT which itself is T+7 to 10 days in earlier stages of the adjudication proceeding, the precise days of TAT and the aforementioned circulars were only presented in the appellate proceeding before the Hon’ble SAT.
19.22 For furthering the aforementioned argument pertaining to TAT, the Noticees placed their reliance on aforementioned “circular” issued by NSDL-CRA dated 04.12.2012 to its Facilitation Centre for maintaining certain service standards including timeline for PRAN generation in regular NPS and NPS lite, and APY Circular dated 27.07.2015.
19.23 While APY Circular dated 27.07.2015 lays down timeline of contribution processing under APY, it mentions that the reference date ‘T’ shall be PRAN Generation date, which may be referred to for determining what ‘1″ shall be in the present matter, the NSDL-CRA Circular dated 04.12.2012 provided that during the “Peak” period, the turnaround time (TAT) for form processing will be: T+15 = 90% of forms must be processed, and T+20 = 100% must be completed. Further, during the “non-Peak” period, the TAT will be: T+12 = 90% of forms to be processed, and T+15 = 100% to be processed. ‘T’ refers to the date on which the receipt (provisional/temporary) is generated by the CRA-FC Acceptance Centre.
19.24 The NSDL-CRA circular dated 04.12.2012 primarily explains the time period between fund receipt date and PRAN generation date, in respect of new subscribers as PRAN generation itself takes 12 to 20 days depending upon peak or non-period period. And, the APY circular dated 27.07.2015 clarifies that ‘T’ may be the PRAN generation date. Even though the said circular was not applicable in the present case of NPS lite subscribers, in absence of any defined `T’ in the regulation, 2010 or the guidelines made thereunder, the said circular clarifies that the prevalent understanding in the Authority at the relevant time, about ‘T’ was supposed to be the PRAN generation date.
19.25 The Hon’ble SAT referred to the NSDL-CRA circular dated 04.12.2012 and APY Circular dated 27.07.2015 for delay computation and observed that “If these two Circulars are considered the finding relating to the alleged delay in the uploading of the SCF and in the remittance may not happen or may get drastically reduced.”
19.26 It may be recalled that in the Inquiry Report dated 23.04.2018, the methodology adopted considered the fund receipt date at Noticee No. 1 ‘s bank account as the reference date (“T”) for both new and existing subscribers. TAT of T+4 days was allowed for SCF upload and T+5 days for fund transfer, excluding Saturdays, Sundays, and holidays while computing due date as well as delay. Further, an additional day was also allowed for generation of the transaction ID, which was assumed to occur on the day following the SCF upload due date.
19.27 Based on this methodology, delays were identified in 5,781 SCF upload transactions ranging from 2 to 29 days and 5,554 fund transfer transactions ranging from 2 to 27 days. The notional loss calculated was 21,86,170 for SCF upload delays and 22,14,420 for fund transfer delays.
19.28 In this regard, the noticee submitted that, in the case of new subscriber registrations, the transaction date should be the PRAN generation date because PRAN generation itself takes 7 to 10 days. Further, aggregators were permitted a relaxation period of 30 days for contributions collected up to 31 March.
19.29 The findings of the Whole Time Member (Penalty) Order dated 02.01.2019 upheld the methodology, observations, and notional loss calculations as contained in the Inquiry Report of AO dated 23.04.2018.
19.30 In the Inquiry Report dated 12.01.2023, pursuant to order dated 15.02.2021 of the Hon’ble SAT, in light of NSDL-CRA Circular dated 04.12.2012 and APY Circular dated 27.07.2015, the methodology was modified with respect to new subscribers. AO bifurcated the transactions into 2 categories i.e., new and existing subscribers. For new registrations, the transaction date (“T”) was taken as the PRAN generation date, while all other aspects of the methodology remained unchanged i.e., for existing registrations, “T” was taken as “fund receipt date”.
19.31 Therefore, using this method, the delay was recalculated for 8646 transactions into 2 categories i.e., new (6307) and existing subscribers (2339). Annexure 5.1 to the Inquiry Report dated 12.01.2023 provides transaction details of New Subscribers and Annexure 5.2 to the Inquiry Report dated 12.01.2023 provides transaction details of Existing Subscribers. Further, Annexure 5.1.A of AO inquiry report dated 12.01.2023 provides a list of delayed transaction for SCF upload in respect of New Subscribers. Annexure 5.1.B provides a list of delayed transaction for fund transfer in respect of New Subscribers. Annexure 5.2.A provides a consolidated list of delayed transaction for both SCF upload and Fund Transfer. Further, even though Member (Investigation and Surveillance) has insisted upon revisiting the methodology by pointing out that one extra day for transaction id generation may not allowed and that Saturday(s), Sunday(s), and holiday(s) falling after the due date as per TAT du not merit exclusion in computation of delay. Moreover, the said member also sought from AO the quantum of compensation payable and calculation thereof, to the 229 subscribers, if any, in the light of findings as at para 7.7 (i) and 7.7 (ii) of the Inquiry Report dated 12.01.2023. The AO, however, has applied the NSDL-CRA circular 2012 and APY circular 2015 and recalculated the delay leaving the rest of the methodology unchanged from 2018 purportedly as per directions of SAT.
19.32 Under this revised methodology, as per para 7.7 of the AO Inquiry Report dated 12.01.2023, the delays pertaining to new subscribers comprised 37 SCF upload transactions and 156 fund transfer transactions. In respect of existing subscribers, delays were identified in 36 SCF upload transactions and 36 fund transfer transactions. However, no notional loss amount was provided in this report.
19.33 In para 7.8 of the Inquiry Report dated 12.01.2023, the AO concluded that the delays had been drastically reduced from 5,781 transactions, as recorded in the earlier Inquiry Report dated 23.04.2018, to 229 transactions covering both new and existing subscribers. It is observed that Certified True Copy this conclusion appears to understate the position. On a plain reading of the figures set out in paragraph 7.7, the aggregate of delayed SCF upload and fund transfer transactions is 265 (37 + 156 + 36 + 36), suggesting that one of the 36 delayed transactions (either SCF upload or Fund Transfer) have not been accounted for in arriving at the figure of 229. More importantly, this figure does not represent the number of unique affected subscribers (PRANs). Even in case of new subscribers, the delayed SCF upload transactions (37) and delayed fund transfer transactions (156) are not mutually exclusive, and there are instances where same PRAN/transaction have been subjected to delay in both processes.
19.34 Further in the IDM dated 10.02.2023 AO observed that the recommendation did not warrant stipulation of the quantum of penalty and, consequently, no compensation became payable to the 229 subscribers. Based on the above findings, this reference to number of affected subscriber being “229”, appears to be incorrect, as the figure of 229 does not denote unique affected subscribers.
19.35 The Observation of the Member (Investigation and Surveillance) dated 11.09.2023 raised concerns regarding the methodology of calculation of the number of days of delay. It was observed therein by the Member that Saturdays, Sundays, and holidays falling after the due date under the specified TAT should not have been excluded while calculating delays. Further, the assumption that the transaction ID is generated on the day following SCF upload should not justify an additional day of exclusion in determining delays in remittance of funds to the trustee bank.
19.36 Member (Investigation and Surveillance), further recalculated the delays by analysing Annexure 5.1 and Annexure 5.2 of the AO’s Inquiry Report dated 12.01.2023 and provides the list of ‘actual delay in SCF upload’, and ‘actual delay in funds transfer to the trustee bank’ in Exhibit 1A(i) and Exhibit 1A(ii) respectively for the ‘New Subscribers’, and Exhibit 2A(i) and Exhibit 2A(ii) respectively for the ‘Existing Subscribers’. Accordingly, Noticees were also called upon to take notice of the fact that despite the AO’s findings (reports dated 12.01.2023 and subsequent supplementary reports) that delays in SCF upload and fund remittance were minimal, the then Member (Investigation and Surveillance) held the methodology incorrect and observed significant delays impacting 439 transactions in SCF upload and 1203 transactions in fund transfer with delays of up to 6 to 7 days in respect of new subscribers and in 65 transactions in SCF upload and 1865 transactions in transfer of funds with delays up to 45 days in respect of existing subscribers.
19.37 Based on these observations, delays were identified for new subscribers in 439 SCF upload transactions (1 to 6 days) and 1,203 fund transfer transactions (1 to 7 days). For existing subscribers, delays were found in 65 SCF upload transactions (1 to 45 days) and 1,865 fund transfer transactions (1 to 45 days). No notional loss amount was specified.
19.38 It is observed that Noticees themselves, in their written submissions dated 23.03.2026, have accepted the computation contained in the said Inquiry Report dated 12.01.2023. Further, Noticees have submitted before the undersigned that the revised computation erroneously disregards intervening public holidays and weekends while calculating the TAT in some transactions, thereby inflating both the number of delayed transactions and the period of delay and in several instances, the due dates for SCF upload (T+4) and fund transfer (T+5) have incorrectly been treated as falling on the same date, resulting in an artificial increase in the alleged defaults. These concerns of the Noticees have been considered in the PO’s calculation in her submission dated 15.04.2026.
19.39 It is observed that the PO in her submission dated 15.04.2026 has addressed the discrepancies in the methodology adopted for computation of delay, as highlighted by the Member (Investigation and Surveillance). Specifically, weekends and holidays have not been excluded while computing the period of delay. Further, no additional day has been allowed for generation of the Transaction ID following the upload of the SCF, as the T+5 timeline for fund transfer already incorporates an additional day subsequent to the SCF upload. However, it is observed that even PO’s final calculation does not consider 30 days relaxation provided by the Authority to Aggregators during the period between 2010 to 2015, for contributions collected up to 31st March even though it has been submitted by the PO that Authority has, during the said period provided the relaxation of 30 days for SCF upload and fund Transfer for the contribution received till 31st March considering the grass root level issues and reconciliation of the same. It is to be noted that the Noticee has submitted to consider the same.
19.40 In view of the above, it is observed that for both new and existing subscribers, the final figure of delay (in SCF upload (72) and Fund Transfer (250)) arrived at by PO is reduced in case of SCF upload and only marginally increased in case of Fund transfer, from the figures arrived at by the AO (in SCF upload (73) and Fund Transfer (192)) but is significantly reduced from the figures arrived at by the Member (Investigation and Surveillance) (in SCF upload (504) and fund Transfer (3068)). No figure towards notional loss or compensation was quantified at any of these stages.
19.41 Further, it is observed from the Annexure 2 of the PO’s submission that, in respect of existing subscribers, the delays are significant, ranging from 11 to 45 days. More particularly, in 13 transactions, a delay of 45 days has been observed, which cannot be regarded as insignificant. Further, as these transactions pertain to the month of February, the relaxation of 30 days, if otherwise available, cannot be invoked in their defence. More so when these are recurring transactions involving existing subscribers, where the time taken for PRAN generation does not constrain Noticees to timely upload the SCF and remit the funds to the Trustee Bank. The Noticees have failed to provide any plausible justification for such delays.
19.42 Till this stage, the delay in disputed transactions have undergone various calculations at various hands (AO, Member (Investigation and Surveillance) and finally PO), all resulting in different conclusions.
19.43 It is clear from PO’s submission that at the relevant time under consideration, the timelines to be followed were neither explicitly articulated nor were strictly construed thereby resulting in differences in application. It is evident that besides omission of internal applicable circulars pertaining to timelines, the reference date ‘T’ and relaxations issued from time to time, all affecting calculation of delay. there was lack of uniformity in interpretation of guidelines pertaining to the methodology to be adopted for calculation of delay in the extant case, particularly regarding inclusion/exclusion of weekends and public holidays. However, with time, practise has evolved and there is much supervisory clarity now in this regard wherein for purpose of compensation, non-working days only shall be considered and benefit of weekends and holidays shall not be given for computation of delay. On the contrary, for computation of due date, the TAT shall exclude the weekends and public holidays. With regard to the observations dated11.09.2023 made by the then Member (Investigation and Surveillance) who has suggested that benefit of exclusion of subsequent weekend (Saturday and Sunday) should not be given in the calculation of delay, there is considerable merit in such observation. Where a delay has occasioned on the part of the Noticee in upload of SCF or in remittance of contributions, then benefit of subsequent weekend on the plea that banks and CRA remain closed on such days should not ideally be accepted. The Noticees ought not to be allowed to take advantage of their own lapses and the benefit of weekends. When during the weekdays they could have rectified their shortcomings and adhere to the timelines. PO has correctly retained weekends and public holidays in delay transactions.
19.44 Further, there is merit in the Member (Investigation and Surveillance) observation that an assumption of ‘transaction ld’ being generated on next day of the SCF upload, does not merit one more day of exclusion in estimation of ‘delay in funds remitted to trustee bank’, as the T+5 timeline for fund transfer already incorporates an additional day subsequent to the SCF upload T+4 timeline.
19.45 However, in the facts and circumstances of this case, even after taking into account the Member (Investigation and Surveillance) observations regarding inclusion of weekends or holidays in computation of delay and not allowing one extra day for transaction id generation, the number of delayed transactions has significantly reduced. Further, if 30 days relaxation that Authority allowed in contribution received till 31st March during the relevant time is considered, this number would further go down. Overall, the trend appears downwards. The reduction in no. of delays only supports the Hon’ble SAT finding that “If these two Circulars are considered the finding relating to the alleged delay in the uploading of the SCF and in the remittance may not happen or may get drastically reduced.” In such a scenario, no penalty can be fastened on the Noticees on this aspect. The disciplines in timelines to be followed by the intermediaries and strict monitoring thereby has evolved over time and a regime of certainty has got ingrained under NPS, as opposed to the much earlier period.
19.46 Based on the findings of the A.0 as contained in his report of 23.04.2018, the charges and the adjudication proceedings had been directed more towards examining the delay in adherence to the specified TAT in 8,646 transactions. Emphasis was not laid on whether the conduct of the Noticee No.1 entailed independent violations of the aggregators’ respective obligations provided under Aggregator Regulations, 2010 and guidelines and for having failed to discharge the responsibilities entrusted to them and to maintain the standard of service expected of them. The AO’s finding indicates that the Noticees permitted an unauthorised person to collect deposits from subscribers over a prolonged period, involving 8,646 transactions between December 2013 and February 2015 which has not been effectively refuted by the Noticees. Dehors the aspect of delay, establishing a relationship with an unauthorised person/entity in itself could be in the realm of violation. Further, the record also indicates that Noticee No. 1 opened multiple collection accounts, allowed unauthorised debit and credit entries in the said collection accounts and rotated such monies from one collection account to another without remitting them to the Trustee Bank. These acts and omissions, even when considered independently of the alleged TAT violations, reflect serious failures of oversight, internal controls, and compliance of aggregator regulations, 2010 and guidelines thereof on the part of the Noticees.
19.47 It is, however, observed that, as is evident from the AO’s Inquiry Report dated 23.04.2018, order dated 02.01.2019 of Whole Time Member (Penalty), AO’s fresh Inquiry Report dated 12.01.2023 made pursuant to order of Hon’ble SAT dated 15.02.2021 and order dated 02.05.2022, and observation dated 11.09.2023 of Member (Investigation and surveillance), the aforesaid acts were not treated as independent regulatory contraventions warranting penalty, but were penalised only because delay in adherence to the specified TAT was found to have occurred owing to the unauthorised relationship of Noticee No.1 with Mr.B.Vijay Reddy. Thus, in view of the absence of determinate and reliable figures regarding the alleged TAT violations, and for the reasons discussed hereinabove including the fact that disciplines in timelines to be followed by the intermediaries and strict monitoring thereby have evolved over time, the penalty insofar as it relates to failure to adhere to the specified TAT may not be attracted.
19.48 Further, as per the AO’s Report dated 23.04.2018, a total penalty of 29,00,590/- was recommended under section 28(4) of the PFRDA Act. The said amount comprised (i) 24,00,590/- towards the alleged notional loss sustained by subscribers, calculated as 21,86,170/- for delays in uploading SCFs in 5,781 transactions and 22,14,420/- for delays in remittance of funds to the Trustee Bank in 5,554 transactions, and (ii) a penalty of 21,00,000/-each on the five Noticees on account of the alleged repetitive nature of the defaults. Since the primary allegation under section 28(4) is the existence of substantial delays which has not been established, the consequential penalty of 25,00,000/- (Z1,00,000/- on each of the five Noticees), imposed on the account of the alleged repetitive nature of the same defaults, cannot be sustained.
20. ORDER
In view of all facts and circumstances of the case, the material placed on record and the submissions made by the Noticees, no penalty is to be imposed on the Noticee. Penalty collected earlier shall be refunded to the Noticee, within 15 days of this order.
DATE: August 21, 2026
PLACE: New Delhi
Mamta Shankar
Whole Time Member (Economics) and
Member authorised to impose Penalty
