SCORES ATR filing default attracts residuary penalty, with quantum fixed by statutory adjudication factors and mitigating circumstances

Failure to file an ATR on the SCORES platform within the stipulated time is treated as non-compliance with SEBI's investor grievance redressal directions and as a failure to furnish required information. The note states that such contravention falls within the residuary penalty provision invoked in the proceedings. In fixing quantum, the adjudicating officer must consider the statutory factors of disproportionate gain, investor loss, repetitive default, and mitigating circumstances such as delayed compliance and any prior penalty for related non-redressal. A deterrent but moderate monetary penalty was therefore considered appropriate.

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Issues: (i) whether the noticee complied with the SEBI circular governing filing of ATR on the SCORES platform; (ii) whether failure to file ATR attracted penalty under the SEBI Act; and (iii) what quantum of penalty was warranted having regard to the statutory factors for adjudication.

Issue (i): whether the noticee complied with the SEBI circular governing filing of ATR on the SCORES platform.

Analysis: The record showed that the noticee did not file ATR within the stipulated time and did not respond to the show cause notice or appear for hearing despite service and affixture. The adjudicating officer treated the default as established on the available material and also noted that the noticee later obtained SCORES authentication and began redressing grievances, but only after delay.

Conclusion: The noticee did not comply with the circular and the default was proved.

Issue (ii): whether failure to file ATR attracted penalty under the SEBI Act.

Analysis: Non-filing of ATR was treated as failure to furnish information to SEBI and as non-compliance with the regulatory directions issued for investor grievance redressal. The adjudicating officer held that such contravention fell within the residuary penalty provision invoked in the proceedings.

Conclusion: Penalty under Section 15HB was attracted.

Issue (iii): what quantum of penalty was warranted having regard to the statutory factors for adjudication.

Analysis: The adjudicating officer considered the statutory factors relating to disproportionate gain, investor loss, and repetitive nature of default, along with mitigating circumstances such as belated compliance and the fact that a separate penalty had already been imposed for non-redressal of the same complaints. The loss to investors was not capable of direct quantification, and a deterrent but moderate penalty was considered appropriate.

Conclusion: A penalty of Rs. 50,000 was imposed.

Final Conclusion: The noticee was found in breach of the SCORES-related filing obligation, held liable to penalty, and subjected to a monetary sanction fixed after considering the statutory adjudication factors and the surrounding circumstances.

Ratio Decidendi: Failure to file ATR on the SCORES platform in compliance with SEBI's investor grievance directions constitutes a contravention attracting penalty under the residuary penalty provision, and the quantum must be fixed by applying the statutory adjudication factors and relevant mitigating circumstances.

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