Law in the town itself should have been upheld by the officials and the local magistrate court. However, due to the rampant corruption, laws of the town are manipulated to fit the needs of the rich and the powerful. It is not uncommon to see the sons of wealthy family walking away scot-free despite committing serious crimes neither is it uncommon for the officials to simply execute innocent people just to release their anger.
In the sect, the sect leader is the alpha and the omega. However, they rarely mete out punishments, they simply come up with a set of laws and pass down orders and expect them to be carried out. Only on the occasions where serious offences have been committed would the sect leader step in. Usually, the 5 division leaders are the one in charge of maintaining law and order.
Offenders would either be expelled or killed, depending on the severity of their crimes.
Betrayers will be killed.
Undercover agents from opposition sects will be killed.
Members caught stealing valuables will be flogged and whipped in public. If they were to do it again, they would be expelled.