In brief. A SEBI order is not the last word. Under Section 15T of the SEBI Act, a person aggrieved by an order of the Board or the Adjudicating Officer may appeal to the Securities Appellate Tribunal, and the Tribunal has, across the modern record, shown a clear willingness to reduce, modify or remand monetary directions that were not adequately reasoned. The single most reliable lever a noticee has on penalty quantum is Section 15J, the provision that disciplines penalty discretion, and the Supreme Court's 2019 ruling in Adjudicating Officer, SEBI v. Bhavesh Pabari settled that the Adjudicating Officer must engage the Section 15J factors and any other relevant circumstance, with discretion preserved.
The chapter at How Does SEBI Decide How Much to Fine You? tells the doctrinal story of Section 15J. This chapter is its operational complement: how that doctrine translates into a winning appellate argument on quantum at the Securities Appellate Tribunal.
Why is SAT the right place to fight quantum?
Because that is what SAT routinely does. Section 15T of the SEBI Act gives any person aggrieved by an order of the Board or the AO a right of appeal to the Securities Appellate Tribunal.1 SAT is not a deferential forum: it tests both the substantive findings and the proportionality of the directions, and the modern record shows it materially modifying or setting aside monetary figures more often than it interferes with the underlying liability finding. The cases that anchor that observation include Satyam (disgorgement remanded and reduced), NSE Co-location (₹625 crore disgorgement set aside, charges later dropped), and Franklin Templeton (₹512 crore refund moderated to ₹250 crore escrow), each covered in the linked landmark chapters.
What is the single strongest argument on penalty quantum?
Non-application of mind to Section 15J. Section 15J of the SEBI Act directs the Adjudicating Officer, in fixing the quantum of penalty, to have due regard to three factors: the amount of disproportionate gain or unfair advantage, the loss caused to investors, and the repetitive nature of the default.2 Adjudicating Officer, SEBI v. Bhavesh Pabari, the Supreme Court's 2019 ruling, held that those factors are illustrative, not exhaustive, and that the AO has discretion to consider other relevant circumstances.3 Read together, the statute and Bhavesh Pabari mean an order that fixes a penalty without visibly engaging the factors is open to direct challenge for non-application of mind. That argument is among the most successful arguments run at SAT.
How do you frame the factor-by-factor attack?
Methodically, on the record. The disciplined appellate brief takes each Section 15J factor in turn and asks two questions of the AO's order: did the AO articulate a finding on the factor, and did that finding bear a rational relationship to the quantum imposed? Where the answer to either question is no, SAT has a basis to remand or reduce. The factors most often attacked include the absence of any quantified disproportionate gain, the absence of any demonstrated investor loss, the first-time and non-repetitive character of the default, and any mitigating circumstance, such as cooperation, voluntary cure or proportionality with similar matters, that the AO failed to weigh under the Bhavesh Pabari "any other relevant circumstance" head.
What about procedural failure at the AO level?
It is often even stronger. The Supreme Court's decision in T. Takano v. SEBI (2022) held that SEBI must disclose to a noticee the relevant material it has relied upon, including the investigation report, subject to narrow redactions; an order built on undisclosed relevant material is exposed on appeal for breach of natural justice.4 Beyond Takano, the standard procedural arguments at SAT include directions travelling beyond the charges in the show-cause notice, denial or curtailment of the personal hearing, and unreasoned conclusions in the operative part of the order. The procedural side of the case is set out separately in What Actually Happens at a SEBI Adjudication Hearing?.
Where does the quantification fight sit?
In a separate layer of the appeal. Where the appellate target is disgorgement rather than penalty, the methodology by which SEBI arrived at the figure is itself the principal weak point: the counterfactual price, the trading window, the attribution of trades and the interest calculation each offer separate angles of attack. The chapter at How Does SEBI Calculate the Disgorgement Number? is the operational guide on that layer. SAT routinely interrogates the inputs and adjusts the figure; the Satyam and NSE Co-location arcs are the canonical examples.
What about the substantive liability finding?
It is harder to dislodge, but not impossible. Where the substantive finding rests on circumstantial inference under the standard set in SEBI v. Kishore R. Ajmera (2016), the appellate argument is that the inference is not sufficiently irresistible on the totality of facts to support the conclusion drawn. That argument requires demonstrating, on the record, that the trading pattern, communications or other circumstantial evidence is reasonably consistent with an explanation other than the one SEBI adopted. Balram Garg v. SEBI (2022) is the worked illustration of an appeal that succeeded on this footing in an insider-trading case, as set out in When Does Trading Become Insider Trading?.
How do you structure a SAT appeal that maximises the chance of penalty reduction?
In four layers, in this order. First, procedural irregularities: failure of natural justice, undisclosed material under Takano, directions beyond the charges, denial of hearing. Second, substantive liability: where the finding rests on circumstantial inference, attack the irresistibility of the inference. Third, Section 15J non-engagement: a factor-by-factor analysis that exposes any non-application of mind on quantum. Fourth, quantification: for disgorgement, the methodology challenge; for penalties, proportionality with comparable matters. Each layer is independently sufficient to move quantum; the appeal that runs all four credibly is the appeal most likely to succeed in some respect, even if not all.
Why does this matter beyond any single appeal?
Because the credibility of the entire enforcement system depends on the appellate testing it survives. SAT's willingness to interfere with monetary quantum is not a failure of the system; it is the part of the system that keeps the upstream regulator disciplined. For the empirical picture of SAT's actual reversal and modification patterns across the record, see What Are Your Actual Odds of Winning at SAT?, and for how that picture sits inside the broader enforcement machinery, see How Does SEBI Actually Enforce the Law?.
Sources & citations
- SEBI Act, 1992, Section 15T (appeal to the Securities Appellate Tribunal) and Section 15Z (appeal to the Supreme Court on a question of law).
- SEBI Act, 1992, Section 15J (factors to be taken into account while adjudging quantum of penalty: disproportionate gain or unfair advantage, loss caused to investors, repetitive nature of the default), read with the Explanation inserted by the Finance Act, 2017.
- Adjudicating Officer, SEBI v. Bhavesh Pabari, Supreme Court of India, judgment dated 28 February 2019, (2019) 5 SCC 90, holding that the Section 15J factors are illustrative and not exhaustive, and that the Adjudicating Officer retains discretion to consider other relevant circumstances.
- T. Takano v. SEBI, Supreme Court of India, judgment dated 18 February 2022, 2022 SCC OnLine SC 210, on the disclosure of relevant material relied upon, including the investigation report, to a noticee.
About this article. Part of Legal Wires' SEBI Enforcement series, an analytical guide to India's securities enforcement record. This is general information and commentary, not legal advice; do not rely on it for any specific matter. Prepared with AI assistance and reviewed by the Legal Wires editorial team. Statutory provisions and judgments are cited above. Last reviewed: 28 May 2026. Spotted an error? Tell us and we will review it.