The adjudication order dated 31 August 2026 follows a remand by the securities appellate tribunal (SAT) which had set aside the earlier 2018 order against the three individuals on grounds relating to service of the show-cause notice (SCN), hearing notices and the adjudication order.
The latest order is significant because it addresses non-compliance with SEBI's directions, rather than reopening the entire question of whether Citrus Check Inns was operating an unregistered collective investment scheme (CIS). SEBI has held that the three directors failed to demonstrate that they had taken adequate steps to ensure that collections from investors stopped after the regulator's prohibitory orders.
Investors Continued Paying Even after the SEBI Ban
SEBI had issued an interim order against CCIL and its directors on 3 June 2015, directing them not to collect any fresh money from customers or investors, launch new schemes or raise funds through other group entities. The directions also prohibited them from disposing of or alienating assets acquired through money raised by Citrus. These directions were subsequently confirmed through a further order dated 24 August 2015.
However, complaints received by SEBI showed that investors continued to make instalment payments to CCIL after the June 2015 order.
Two investors, Sunita Bharmu Patil and Chintamani H Kale, submitted payment receipts showing continued instalment payments. According to the receipts reproduced in SEBI's order, Ms Patil made five payments of ₹5,000 each between August 2015 and February 2016, while Mr Kale made four payments totalling ₹25,000 during August 2015 and January 2016. Thus, receipts totalling ₹50,000 were available on record.
The directors argued that these were not deliberate collections. They said CCIL had a large decentralised network of collection agents operating across 51 branches in Maharashtra, and that some payments may have been made via existing auto-debit instructions. They also argued that it was practically impossible to immediately communicate SEBI's directions to every agent and customer.
SEBI, however, rejected the explanation.
The adjudicating officer (AO) of SEBI, Medha Sonparote, noted that the June 2015 order and the August 2015 confirmatory order gave the company sufficient time to comply. Yet the directors failed to produce documents or communications showing that they had actively instructed their collection agents to stop accepting money.
"Though the material available on record does not suggest any instructions issued by CCIL or its noticees, directing agents to collect funds," SEBI said, the directors had failed to demonstrate the steps taken to stop collections after the orders.
SEBI also held that the relationship between CCIL and its collection agents could not be used as a defence. Since the agents were acting in a principal-agent relationship with the company, the company and its responsible directors could not simply disown their actions.
Non-executive Director Defence Rejected
The three directors also argued that Prakash Utekar and Venkatraman Natarajan were non-executive directors and were not involved in the day-to-day affairs of CCIL.
SEBI rejected this contention after examining records and the company's constitutional documents from the Union ministry of corporate affairs (MCA).
The regulator noted that the three directors were described as ‘director (promoter)’ in MCA records, had shareholding in CCIL and had signed its memorandum and articles of association. The articles also identified them as the first directors of the company and authorised the directors to raise and secure funds.
Further, Mr Utekar and Mr Natarajan had signed the company's financial statements. According to SEBI, this indicated awareness of the company's fund-mobilisation activities. The AO, therefore, concluded that merely describing them as non-executive directors in Form 32 was insufficient to absolve them of responsibility.
SEBI consequently held that Mr Utekar and Mr Natarajan were responsible for the conduct of the company's business and liable for the violation.
Only ₹50,000 Proven, but Potential Investor Harm Much Larger
Interestingly, SEBI acknowledged that the material before it did not quantify any disproportionate gain made by the directors or the actual loss caused to investors as a result of the specific violation being adjudicated.
Nevertheless, the regulator observed that CCIL had continued collecting periodic instalments from existing investors despite the prohibitory orders. Given the company's extensive network of collection agents, SEBI said the continued collections could have caused widespread, unquantifiable financial harm to a large pool of small investors.
SEBI also noted that the three individuals had served as directors of Royal Twinkle Star Club Ltd, another entity that had operated an unregistered collective investment scheme and against which regulatory directions had been issued.
Under Section 15HB, a person failing to comply with provisions of the SEBI Act, regulations or directions issued by SEBI can face a penalty ranging from ₹1 lakh to ₹1 crore where no separate penalty is prescribed.
After considering the circumstances, SEBI imposed a ₹25 lakh penalty jointly and severally on Mr Goenka, Mr Utekar and Mr Natarajan.
Moneylife had flagged Citrus nearly 12 years ago
The latest SEBI action also brings back into focus Moneylife's long-standing reporting on Citrus Check Inns and its connection with Royal Twinkle Star Club.
In March 2014, Moneylife had reported that Citrus Check Inns was the ‘new avatar’ of Royal Twinkle Star Club, alleging that holiday memberships were being marketed to investors as investment plans promising attractive returns. The report highlighted how investors were making monthly payments, believing they were investing in a recurring deposit-like product.
More significantly, Moneylife subsequently reported in March 2014 that it had alerted SEBI about Royal Twinkle's activities and its transition into Citrus Check Inns. SEBI then barred Royal Twinkle and its directors from collecting money from investors. Moneylife had also pointed out that Citrus was continuing similar fund-mobilisation activities.
The issue remained under regulatory and judicial scrutiny for years. In October 2025, Moneylife reported that SEBI had barred Citrus Check Inns and four directors from the securities market until ₹3,036 crore was refunded to investors, following a long-running legal battle involving SEBI, SAT and the Supreme Court.
More recently, Moneylife reported in July 2026 that SEBI had imposed a ₹1.10 crore penalty on four former directors of Citrus Check Inns in a separate adjudication proceeding relating to the operation of unregistered CIS schemes and mobilisation of investor funds.
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