Sephardic custom allows one to remain seated during Kaddish, but if one was standing at the time when Kaddish began, then he must remain standing.
If an elderly person, or Torah scholar, passed by a person as he was sitting during Kaddish, and he rose in that individual's honor, then he must remain standing (until he completes his response of "Da'amiran Be'alma"). Although he was sitting when Kaddish began, nevertheless, once he stood, he is not then permitted to sit down, just as if he had been standing when Kaddish began.
The exception to this rule is where the person did not fully stand up to honor the Torah scholar, but momentarily lifted his body off his seat. A person who is himself a Torah scholar is not required to stand fully when another Torah scholar passes by, and may merely gesture by lifting himself very briefly from his seat. If this happened during Kaddish, then the Torah scholar does not need to stand for the rest of Kaddish.