D, is a senior director of ARN Limited, a listed entity with National Stock Exchange. About 4 months ago, D received a summon (in his personal capacity) from the SEBI regarding his involvement in the insider trading acti

Section 28B (1) of the Securities and Exchange Board of India Act, 1992 prescribed that where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay, if he had not died, in the like manner and to the same extent as the deceased. However, in case of any penalty payable under this Act, a legal representative shall be liable only in case the penalty has been imposed before the death of the deceased person. For the purposes of sub-section (1), - (a) any proceeding for disgorgement, refund or an action for recovery before the Recovery Officer under this Act, except a proceeding for levy of penalty, initiated against the deceased before his death, shall be deemed to have been initiated against the legal representative, and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased and all the provisions of this Act shall apply accordingly; (b) any proceeding for disgorgement, refund or an action for recovery before the Recovery Officer under this Act, except a proceeding for levy of penalty, which could have been initiated against the deceased if he had survived, may be initiated against the legal representative and all the provisions of this Act shall apply accordingly. Every legal representative shall be personally liable for any sum payable by him in his capacity as legal representative if, while his liability for such sum remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. However, the liability of a legal representative under this section shall be limited to the extent to which the estate of the deceased is capable of meeting the liability. For the purposes of this section "legal representative" means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character, the person on whom the estate devolves on the death of the party so suing or sued. In the given case, SEBI has imposed penalty on 14th May and Mr. D has died on 18th May. Therefore, L, being a legal representative of D, is liable to pay the liability, subject to the extent to which the estate of D is capable of meeting the liability of ₹ 50 lakhs.