SAT Imposes ₹1 Lakh Costs On MCX For Unsustainable ₹1.49 Crore Penalty Against Ventura Securities

The Securities Appellate Tribunal has directed the Multi Commodity Exchange of India Limited (MCX) to pay ₹1 lakh in costs to Ventura Securities Limited after setting aside a ₹1.49 crore penalty imposed on the company for an alleged violation of client level open position limits.

A coram of Presiding Officer Justice P.S. Dinesh Kumar, Technical Members Meera Swarup and Dr. Dheeraj Bhatnagar also directed MCX to forthwith refund or reverse ₹1.76 crore, including the penalty and applicable Goods and Services Tax, debited from Ventura Securities' account.

Ventura Securities approached the Tribunal challenging an order passed by the Member Committee of the MCX, which imposed a penalty of ₹1.49 crore for violating the client-level open position.

The company contended that the impugned order was signed by S.V. Krishnamohan, who had ceased to be an Independent External Expert on the Committee on March 20, 2026. In response, MCX admitted that his signature on the order was a bona fide error and sought a remand for reconsideration.

Ventura Securities further argued that its client's position in natural gas options had allegedly exceeded the prescribed 2% open position limit, reaching 27%, without MCX issuing any alert. It also contended that, under a SEBI circular dated September 9, 2026, the maximum penalty for the alleged violation was ₹2 lakh.

MCX did not dispute these submissions.

The Tribunal held that the impugned order was unsustainable in law since as on the date of the impugned order, S.V Krishnamohan had ceased to be an Independent External Expert.

It also noted that the SEBI circular capped the maximum penalty at ₹2 lakh, while MCX had already debited ₹1.76 crore, including the penalty and applicable GST, from Ventura Securities' account on October 14, 2026.

“Such act on the part of the respondent exchange, which is a first line regulator cannot be countenanced.” it held

Rejecting MCX's request to remand the matter for reconsideration, the Tribunal held that it was appropriate to allow the appeal with costs.

Accordingly, it set aside the impugned order, directed MCX to refund or reverse the amount debited from Ventura Securities' account forthwith, and ordered it to pay ₹1 lakh in costs to Venture Securities.

For Appellant: Advocates Rushin Kapadia, Sumit Agrawal, Kavish Garach and Saumya Singh Thakur

For Respondent: Advocates Anubhav Ghosh, Vivek Shah and Paras Taneja