The liability of legal representative in case of penalty

Solution

The liability of a legal representative for a penalty under the SEBI Act is  to the same extent as the deceased, but only if the penalty was imposed before the death of the deceased person .  According to the Securities Appellate Tribunal (SAT), proceedings for imposing a penalty cannot be initiated or continued against the legal representatives of a deceased person if the person died during the pendency of the adjudication proceedings.  However, once a penalty has been imposed during the lifetime of the deceased, Section 28B of the SEBI Act allows for its recovery from the legal representative, limited to the value of the assets or estate inherited by them from the deceased. The legal representative is not personally liable beyond the value of the inherited estate.  The legal representative is only liable to pay where: 

• The penalty was imposed before the death of the deceased person.
• The liability is limited to the extent of the assets of the deceased that came into the legal representative's possession.