Administrative law and fintech adjudication
📘 Understanding Administrative Law in Fintech Adjudication
Administrative law governs how government agencies and regulators operate, especially how they exercise decision-making authority (adjudication, rule-making, enforcement). In the fintech sector — which includes digital banking, cryptocurrencies, online lending platforms, payment gateways, robo-advisors, and more — regulatory authorities like SEBI, RBI, the Registrar of Companies (RoC), or SAT often adjudicate disputes, impose penalties, or issue directions.
Fintech adjudication typically involves:
Violation of financial regulations
Failure to meet compliance norms (KYC, AML, etc.)
Consumer complaints
Algorithmic discrimination
Delayed disclosures under company law
The adjudication must comply with principles of natural justice, proportionality, reasonableness, and rule of law.
⚖️ Detailed Case Law on Administrative Law & Fintech Adjudication
1. SEBI v. Ram Kishori Gupta & Anr. (2025)
Court: Supreme Court of India
Theme: Res judicata in fintech-related regulatory adjudication
📝 Facts:
SEBI issued a show-cause notice in 2005 against a company for misleading investors through advertisements promising false buybacks and bonuses.
A final adjudication order was passed by SEBI in 2014, which became final.
In 2018, SEBI reinitiated proceedings and issued fresh directions, including disgorgement (return of unlawful gains).
The defendant challenged the second round of proceedings.
⚖️ Issues:
Can SEBI issue multiple final orders on the same cause of action?
Does the doctrine of res judicata apply to quasi-judicial bodies?
🧑⚖️ Holding:
The Supreme Court held that res judicata applies to SEBI proceedings.
Once a final order is passed and not appealed, SEBI cannot initiate fresh adjudication on the same cause.
Even if SEBI wishes to seek disgorgement, it must be part of the original proceedings.
📌 Significance:
Establishes that administrative finality is binding.
Repeated adjudication violates procedural fairness.
Ensures legal certainty and efficiency in fintech enforcement.
2. Edelweiss Securities Ltd. – SEBI Adjudication Order (2017)
Authority: SEBI Adjudicating Officer
Theme: Disclosure violations and natural justice in fintech securities operations
📝 Facts:
SEBI found Edelweiss engaged in trades during a period when share prices of certain companies were manipulated.
A show-cause notice was issued, alleging failure to comply with regulatory due diligence.
⚖️ Issues:
Was the adjudication conducted with adherence to natural justice?
Were the documents forming the basis of charges shared with the accused?
Were the penalties proportionate?
🧑⚖️ Holding:
SEBI held Edelweiss liable, but it was noted that all material evidence must be disclosed before imposing penalties.
Penalty was reduced, acknowledging partial cooperation and lack of malice.
📌 Significance:
Transparency in adjudication is essential.
Regulators must provide detailed reasons and disclosure of evidence to accused fintech firms.
3. Inquest Fintech Pvt. Ltd. v. Maya Gupta (Liquidator), Rain Automotive (2023)
Court: NCLT & NCLAT
Theme: Adjudication of fintech asset transactions during liquidation under IBC
📝 Facts:
Inquest Fintech was involved in transactions with a company under liquidation.
The liquidator alleged these were preferential/fraudulent transactions under Sections 45, 49, 66 of the Insolvency and Bankruptcy Code (IBC).
The adjudication sought to void these transactions.
⚖️ Issues:
Were these transactions done in bad faith or with intent to defraud creditors?
Could the adjudicating authority (NCLT) treat fintech assets as “not readily realisable”?
🧑⚖️ Holding:
NCLT held that the fintech firm failed to prove the transactions were arms-length and transparent.
The transactions were voided, and assets were returned to the liquidation estate.
📌 Significance:
Emphasises that fintech transactions are subject to forensic audit and judicial scrutiny during insolvency.
Liquidators can use administrative tools to reverse questionable digital transactions.
4. Mynd Fintech Pvt. Ltd. – RoC Adjudication under Companies Act, 2013 (2023)
Authority: Registrar of Companies
Theme: Non-filing of beneficial ownership disclosure under Section 89
📝 Facts:
Mynd Fintech delayed filing statutory forms MGT-4, MGT-5, and MGT-6, related to beneficial ownership.
There was a delay of 975 days in compliance.
The RoC initiated adjudication proceedings.
⚖️ Issues:
Was the delay justifiable?
Should penalty be waived due to lack of financial loss to stakeholders?
🧑⚖️ Holding:
The RoC imposed penalties under Section 89(5) of the Companies Act, 2013.
Held that compliance obligations are mandatory, and unintentional delay is not an excuse.
📌 Significance:
Administrative bodies are empowered to penalize procedural lapses, even without substantive harm.
Fintech companies must comply with disclosure timelines or face adjudication.
5. SEBI v. Brijlaxmi Leasing & Finance Ltd. (2025)
Court: Supreme Court of India
Theme: Interest liability from date of order, even if not mentioned
📝 Facts:
SEBI passed a penalty order under Section 15HA but didn’t mention interest in the original order.
After the compliance period lapsed, SEBI issued a recovery notice with interest.
The company argued that since interest wasn’t mentioned, it’s not liable.
⚖️ Issues:
Does SEBI have statutory authority to levy interest automatically?
Can interest be levied retrospectively?
🧑⚖️ Holding:
The Court upheld SEBI’s action.
Held that interest is statutory once the penalty is imposed and not paid within time.
Interest accrues automatically even if not expressly written in the order.
📌 Significance:
Demonstrates implicit statutory powers of regulators in fintech adjudication.
Reinforces that regulated entities must not ignore orders, even if ambiguous on interest.
6. Revolut de-banking case – Uzbekov v. Revolut (UK High Court, 2023)
Court: High Court, UK
Theme: Unfair closure of fintech banking services (public law vs private law)
📝 Facts:
Revolut closed the account of Mr. Uzbekov without detailed explanation.
He filed a lawsuit seeking declaratory relief that the closure was unjust.
⚖️ Issues:
Can a fintech company close a customer’s account without adequate explanation?
Does public law (administrative fairness) apply to private digital banks?
🧑⚖️ Holding:
The Court dismissed the case.
Held that private fintechs are not strictly bound by public law unless performing a public function.
Declaratory relief was refused because no ongoing relationship remained.
📌 Significance:
Raises questions on due process in algorithmic decisions.
Challenges traditional distinctions between public and private sector accountability in fintech.
7. Surabhi Mundhara v. SEBI (SAT Decision)
Court: Securities Appellate Tribunal (India)
Theme: Non-disclosure of documents and breach of natural justice
📝 Facts:
SEBI imposed a penalty for insider trading.
However, key documents relied upon were not shared with the accused.
⚖️ Issues:
Does failure to share documents invalidate adjudication?
What is the scope of natural justice in regulatory proceedings?
🧑⚖️ Holding:
SAT set aside SEBI’s order.
Held that failure to provide relied-upon documents violates the principles of a fair hearing.
📌 Significance:
Emphasises that regulators must fully disclose evidence.
Without due process, even substantively correct orders may be quashed.
🎯 Conclusion
Fintech adjudication lies at the intersection of technological innovation and regulatory compliance. Administrative law principles such as:
Natural justice (audi alteram partem)
Doctrine of res judicata
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