Rude old boy observed reportedly (7)
I believe the answer is:
obscene
'rude' is the definition.
(obscene can mean rude or indecent)
'old boy observed reportedly' is the wordplay.
'old boy' becomes 'OB' (abbreviation for a private school 'old boy').
'observed' becomes 'seen' (synonyms).
'reportedly' shows a homophone (sound like).
'seen' is a homophone of 'scene'.
'ob'+'scene'='OBSCENE'
(Other definitions for obscene that I've seen before include "Lewd - offensive" , "Lewd or loathsome" , "offending sensibilities?" , "Morally offensive, disgusting" , "Improper" .)