BEFORE  THE   SECURITIES  APPELLATE   TRIBUNAL 
                                                                 MUMBAI 
                                                      
                                                 
                                                     Date of Decision:04.01.2022 
                                                 
                                             
                                                  Appeal No.765 of 2021 
                                             
                                             
                      Ms. Suhanika Chourey                           
                      Partner Wealth                                
                      Management Research                           
                      Ward No.15, Makan No.11,                      
                      Near Old Janta School,                        
                      Malviyaganj, Itarsi, (M.P.) -461111.         ...Appellant    
                                                                                    
                                        Versus 
                                             
                      Securities and Exchange Board of India        
                      SEBI Bhavan, BKC, Plot No.C4-A,               
                      ‘G’ Block, Bandra Kurla Complex,              
                      Bandra (East), Mumbai – 400 051,              
                      Maharashtra.                                 …Respondent 
                       
                       
                      Mr.  C.S.  Abhishek  Mishra,  Practicing  Company 
                      Secretary for the Appellant. 
                       
                      Mr. Abhishek Khare, Advocate with Mr. Sharvil Kala, 
                      Advocate i/b. Khare Legal for the Respondent. 
                                             
                                             
                      CORAM: Justice Tarun Agarwala, Presiding Officer 
                                     Justice M.T. Joshi, Judicial Member  
                         
                      Per: Justice Tarun Agarwala, Presiding Officer (Oral) 
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              1.      The present appeal has been filed against the order 
               dated  31st  August,  2021  imposing  a  penalty  of  Rs.7 
               lakhs under Section 15HA and Section 15HB of the 
               Securities  and  Exchange  Board  of  India  Act,  1992 
               (hereinafter referred to as ‘SEBI Act’) for violation  of  
               Section 12(1) of the SEBI Act read with Regulation 
               3(1) of SEBI (Investment Advisers) Regulations, 2013 
               (hereinafter referred to as ‘IA Regulations’) and also 
               the provisions of Regulations 3 of SEBI (Prohibition of 
               Fraudulent and Unfair Trade Practices relating to the 
               Securities  Market)  Regulations,  2003)  (hereinafter 
               referred to as ‘PFUTP Regulations’) read with Sections 
               12A of the SEBI Act.  
              2.       The facts leading to the filing of the present appeal 
               is, that a partnership firm was created by the appellant 
               and two others for carrying out investment advisory 
                                        th
               activities.  The business started on 28  January, 2016 
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                         and  in  four  months  they  had  about  100  clients  and 
                                                                                th
                         generated about Rs.16 lakhs.  A complaint dated 29  
                         February, 2016 was lodged against the appellants for 
                         carrying   out   unauthorised    investment    advisory 
                         activities.  This led to an investigation wherein it was 
                         found that the appellants were carrying out investment 
                         advisory   activities   without   getting    themselves 
                         registered under the SEBI Act.  
                      3.      Accordingly,  a  show  cause  notice  was  issued  to 
                         show cause as to why appropriate penalty should not 
                         be imposed upon them.  
                      4.      The appellant submitted a reply admitting that they 
                         had  committed  a  mistake  of  running  a  business  of 
                         investment  advisory  without  obtaining  registration 
                         from  SEBI  due  to  their  non-awareness  and  limited 
                         knowledge of the SEBI laws.  However, upon coming 
                         to  know  that  a  registration  was  required  they 
                         immediately closed their advisory business and closed 
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              their  bank  accounts  and  dissolved  the  partnership 
              agreement.    Further,  the  appellants  refunded  the 
              monies taken from their clients.  It was urged that the 
              business  which  was  started  was  closed  within  four 
              months. 
             5.      The Adjudicating Officer after considering the reply 
              and finding that the business was only carried out for 
              four months and monies were refunded to the clients 
              held that the appellant had violated  Section 12(1) of 
              the  SEBI  Act  read  with  Regulation  3(1)  of  the  IA 
              Regulations,  2013  for  not  obtaining  registration  for 
              carrying  out  advisory  business.    The  AO,  however, 
              also found the appellants guilty of violating Regulation 
              3 of the PFUTP Regulations read with Section 12A of 
              the SEBI Act and, accordingly, imposed a penalty of 
              Rs.7 lakhs. 
             6.       We  have  heard  Mr.  Abhishek  Mishra,  Practicing 
              Company Secretary for the appellant and Mr. Abhishek