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Section 47: Factors to be taken into account by the Adjudicating Officer

Information Technology Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2000
Section 46 All 90 Sections of Information Technology Act Section 48

Legal Commentary & Landmark Judgments: Section 47

Section 47 establishes the statutory mitigating and aggravating factors that the Adjudicating Officer must take into account when determining the quantum of compensation or penalty under the Act.

  • Disproportionate Gain or Unfair Advantage: Mandates assessment of the quantum of unlawful commercial profit or unfair advantage realized by the defaulter as a result of the contravention.
  • Quantification of Victim's Loss: Requires evaluation of the actual financial, reputational, or operational loss inflicted upon the complainant or affected third parties.
  • Repetitive Nature of Default: Directs the Adjudicating Officer to consider whether the contravention was an isolated administrative oversight or a repeated and systemic default.
Key Landmark Precedents:
  • Hindustan Steel Ltd. v. State of Orissa (1969) 2 SCC 627: Supreme Court established that statutory penalties should not be imposed mechanically; adjudicators must weigh the gravity of conduct, absence of bad faith, and disproportionate impact.
  • SEBI v. Bhavesh Pabari (2019) 5 SCC 90: Supreme Court held that statutory factors governing quantum of penalty are mandatory guidelines that the adjudicator must consider in every penalty determination.
  • Adjudicating Officer, SEBI v. Deepak G. Patel (2018) 14 SCC 566: Supreme Court reiterated that the absence of unfair gain or minimal investor loss operates as a valid legal ground to impose the minimum permissible penalty.
Courtroom Practice & Strategic Litigation Guidance:

When defending against Section 43 or 44 claims, structure your defense around the three Section 47 criteria by demonstrating zero commercial profit, prompt remediation of the victim's loss, and an unblemished prior regulatory record to reduce penalties to the minimum.

Section 46 All 90 Sections of Information Technology Act Section 48