SEBI orders banks to remit Rs 59.41 lakh from Add Life Pharma accounts

The Enforcement Action

The Securities and Exchange Board of India (SEBI) has directed every bank and mutual fund in the country to remit to it money held in the accounts of Add Life Pharma Ltd, a Gujarat-registered company, to recover outstanding dues of Rs 59,41,000 (Rupees Fifty Nine Lakh Forty One Thousand). The direction is contained in a General Remittance Order dated 26 October 2026, Remittance Order No. 2784/8511/2025, issued by the Recovery Officer at SEBI's Western Regional Office in Ahmedabad.

The order arises under Recovery Certificate No. 8511 of 2025 dated 7 January 2025, drawn up against Add Life Pharma Ltd (PAN: AAFCA5165L), which the order refers to as the "Defaulter". It follows Attachment Proceeding Nos. 15778 and 15779 of 2026, under which SEBI had earlier attached the company's bank and demat accounts.

The dues trace back to a monetary penalty of Rs 20,00,000 imposed by a SEBI Adjudicating Officer by Order No. PB/AO-39/2010 dated 21 June 2010 in the matter of Add Life Pharma Ltd, according to SEBI's notice of demand. That penalty, SEBI's recovery papers state, remained unpaid, and interest has been accruing on it since.

Add Life Pharma Ltd has not publicly responded to the remittance order. The order is an enforcement step to collect an existing demand; it does not contain new findings against the company.

How the Scheme Worked

The recovery documents published by SEBI describe a debt that went unpaid for more than fourteen years before the regulator moved to collect it. They do not restate the conduct for which the 2010 penalty was imposed, so this report does not characterise that conduct. What the documents do set out, step by step, is how a Rs 20 lakh penalty became a near-Rs 60 lakh recovery.

June 2010 - the penalty. An Adjudicating Officer of SEBI imposed a penalty of Rs 20,00,000 on Add Life Pharma Ltd by Order No. PB/AO-39/2010 dated 21 June 2010. The September 2026 attachment notice cites the same order as "Order/PB/AO-39/2010".

January 2025 - the certificate and demand. On 7 January 2025, SEBI's Recovery Officer drew up Recovery Certificate No. 8511 of 2025 and issued a Notice of Demand. According to the notice, the amount due was Rs 55,21,000, made up of the Rs 20,00,000 penalty, interest of Rs 35,20,000 "from June 2010 to January 2025 @ 1% p.m.", and recovery costs of Rs 1,000. The company was given 15 days to pay.

The notice warned that, failing payment, SEBI could recover the money through attachment and sale of movable and immovable property, attachment of bank accounts, detention in prison, or appointment of a receiver. It also stated that any transfer of property to a spouse, minor child, son's wife or son's minor child on or after 21 June 2010, other than for adequate consideration, would be treated as the company's own property for recovery purposes.

September 2026 - attachment. SEBI records that no amount was paid. On 3 September 2026, the Recovery Officer issued notices attaching the company's bank and post office accounts, and its demat accounts and mutual fund folios. The bank attachment notice states there was "sufficient reason to believe" the company might dispose of funds, and directed that no debit be made from its accounts up to the dues, while allowing credits.

October 2026 - remittance. The 26 October 2026 order converts that freeze into collection. It puts outstanding dues at Rs 59,41,000, up from Rs 55,21,000 in January 2025. The increase of Rs 4,20,000 is consistent with interest continuing to run on the Rs 20 lakh principal at the 1% monthly rate stated in the demand notice. Banks and mutual funds are directed to remit the amount "forthwith" to a designated SEBI recovery account and confirm the payment by email.

The Law Invoked

The certificate itself is issued under section 28A of the Securities and Exchange Board of India Act, 1992, read with section 222 of the Income Tax Act, 1961. Section 28A, inserted by the Securities Laws (Amendment) Act, 2014, lets SEBI's Recovery Officer recover unpaid penalties, disgorgement and refund orders using the machinery the Income Tax Act provides to tax authorities. Section 222 of the Income Tax Act is the provision under which a recovery certificate is drawn up.

The notice of demand is issued under Rule 2 of the Second Schedule to the Income Tax Act, and states that recovery will proceed under sections 220 to 227, 228A, 229 and 232 of the Income Tax Act and the Second Schedule. Together these provisions govern interest on unpaid demands, modes of recovery and the recovery officer's powers. The notice also cites Rule 16 of the Second Schedule, under which the defaulter may not mortgage, charge or lease property after service of the notice without the Recovery Officer's permission, and any such dealing is void.

The remittance order is issued under sections 28A and 28B of the SEBI Act, as amended by the Securities Laws (Amendment) Act, 2014, read with the relevant sections of the Income Tax Act and Income Tax Rules. The recovery papers do not cite the provisions under which the original 2010 penalty was imposed.

What Happens Next

Banks and mutual funds holding accounts of Add Life Pharma Ltd must now transfer funds to SEBI up to the outstanding Rs 59,41,000 and report the transaction. Institutions with no account of the company need not respond, the order states. If the attached balances fall short, the notice of demand sets out further routes, including attachment and sale of movable and immovable property, detention in prison, or the appointment of a receiver.

Once the full amount, with further interest and costs, is collected, the Recovery Officer can issue a completion order closing the certificate. SEBI published exactly such a completion order on the same date, 26 October 2026, in an unrelated matter, after the defaulter there paid in full.

The underlying 2010 penalty order was open to appeal before the Securities Appellate Tribunal when it was passed. The recovery papers do not record any appeal or stay, and they describe the penalty as due. Any dispute over the recovery itself would be for the appropriate forum to decide.

What It Means

For investors, the case is a reminder that SEBI penalties do not lapse with time. A fine imposed in 2010 has now nearly tripled because interest at 1% per month kept running for more than sixteen years, and the regulator has used its post-2014 recovery powers to reach the company's bank accounts, demat holdings and mutual fund folios. The same powers allow it to treat certain transfers to close relatives as the defaulter's own property.

There is also a practical signal for shareholders. A listed or formerly listed company with an unpaid SEBI penalty on record is a governance flag worth checking before you invest. SEBI publishes recovery certificates, attachment notices and adjudication orders under the Enforcement section of sebi.gov.in, searchable by company name, and stock exchanges carry company disclosures. A quick search can show whether a company has ignored a regulator's demand.

Investors who hold shares of a company under recovery are not themselves liable for its dues; attachment applies to the defaulter's own accounts and assets. But a company whose bank accounts are frozen and drained may face operational strain, so holders should follow the company's disclosures closely.

FAQ

What exactly did SEBI order on 26 October 2026?

SEBI's Recovery Officer at its Western Regional Office directed all banks and mutual funds in India to remit to SEBI, from any account of Add Life Pharma Ltd held with them, the outstanding dues of Rs 59,41,000 under Recovery Certificate No. 8511 of 2025. The remittance order follows attachment proceedings Nos. 15778 and 15779 of 2026, and institutions holding no account of the company need not respond.

Is this a new finding of wrongdoing against the company?

No. The remittance order is a collection step, not a fresh finding. It enforces a monetary penalty of Rs 20,00,000 that an Adjudicating Officer imposed by an order dated 21 June 2010, together with interest that SEBI's recovery papers compute at 1% per month. The recovery documents do not restate the findings of the 2010 order.

Why has the amount grown from Rs 20 lakh to Rs 59.41 lakh?

According to SEBI's notice of demand, interest from June 2010 to January 2025 at 1% per month came to Rs 35,20,000, and a recovery cost of Rs 1,000 was added, giving Rs 55,21,000. The October 2026 order puts outstanding dues at Rs 59,41,000, reflecting further interest since January 2025.

Can the company challenge the recovery?

The underlying 2010 penalty order was the decision open to appeal before the Securities Appellate Tribunal at the time. The recovery papers do not record any appeal or stay. Add Life Pharma Ltd has not publicly responded to the remittance order, and any challenge to the recovery itself would be a matter for the appropriate forum.

How can I check whether a listed company faces SEBI action?

SEBI publishes recovery certificates, attachment notices and adjudication orders under the Enforcement section of sebi.gov.in, searchable by company name. Stock exchange websites also carry corporate disclosures. Checking both before investing helps reveal unpaid regulatory penalties that may point to wider governance concerns.

This report is based on the official SEBI General Remittance Order dated 26 October 2026, read with SEBI's Notice of Demand dated 7 January 2025 and Notice of Attachment of Bank/Post Office Account in Recovery Certificate No. 8511 of 2025.