SAT imposes ₹1 lakh costs on MCX, quashes ₹1.5 crore penalty on Ventura Securities

The Securities Appellate Tribunal (SAT) has imposed ₹1 lakh in costs on the Multi Commodity Exchange of India (MCX) for levying a ₹1.49 crore penalty on Ventura Securities Limited despite the maximum permissible penalty under a Securities and Exchange Board of India (SEBI) circular being ₹2 lakh. [VSL Vs MCX]

The tribunal also set aside the penalty order and directed MCX to immediately refund ₹1.76 crore, inclusive of GST, debited from Ventura's account.

A Bench of Justice PS Dinesh Kumar (Presiding Officer), Meera Swarup (Technical Member) and Dr Dheeraj Bhatnagar (Technical Member) held that such conduct by an exchange functioning as a first-line regulator could not be countenanced.

"Such act on the part of the respondent exchange, which is a first line regulator cannot be countenanced," the SAT said.

The dispute arose from an order dated September 28, 2026, passed by MCX's Member Committee imposing a penalty of ₹1.49 crore on Ventura Securities for allegedly violating client-level open position limits.

According to Ventura, the allegation was that one of its clients had exceeded the permissible 2 percent open position limit in natural gas options, with the position allegedly reaching 27 percent.

Ventura challenged the penalty before SAT, questioning both the legality of the order and the quantum of the penalty imposed.

During the proceedings, Ventura pointed out that SV Krishnamohan, an independent external expert whose signature appeared on the penalty order, had ceased to be a member of the committee on March 20, 2026.

However, the penalty order was issued more than six months later, on September 28.

MCX acknowledged the discrepancy and submitted that the inclusion of Krishnamohan's signature was a bona fide error. It requested that the matter be remitted for reconsideration.

Ventura further argued that MCX had failed to issue any alert concerning the alleged breach of position limits.

It also submitted that even assuming the violation was established, a SEBI circular dated September 9, 2026, prescribed a maximum penalty of ₹2 lakh.

MCX did not dispute these submissions.

The tribunal noted that MCX had already debited ₹1.76 crore, comprising the penalty and applicable GST, from Ventura's account on October 14.

It held that the penalty order was legally unsustainable and directed an immediate refund.

MCX subsequently requested the tribunal to refrain from imposing costs. However, the Bench rejected the request.

Advocates Rushin Kapadia, Sumit Agrawal, Kavish Garach and Saumya Singh Thakur of Regstreet Law Advisors represented Ventura Securities.

Advocates Anubhav Ghosh, Vivek Shah and Paras Taneja of Trilegal appeared for MCX.

[Read Judgment]