CHANAKYA NATIONAL LAW UNIVERSITY, PATNA

Investment and Securities

Project on:

Securities Appellate Tribunal

SUBMITTED TO:
SUBMITTED BY:

Dr. Ajay Kumar

ROHIT KR.GAURAV

(FACULTY OF INVESTMENT AND SECURITIES)

ROLL NO: 787

FIFTH YEAR

9th SEMESTER

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 ACKNOWLEDGEMENT

Any project completed or done in isolation is

unthinkable. This project, although prepared by me, is a
culmination of efforts of a lot of people.

Firstly, I would like to thank our teacher, Dr. Ajay Kumar

for his valuable suggestions towards the making of this
project.

Further to that, I would also like to express my gratitude

towards my seniors who were a lot of help for the
completion of this project.

The contributions made by my classmates and friends

are, definitely, worth mentioning.

I would like to express my gratitude towards the library

staff for their help also.

Last, but far from the least, I would express my

gratitude towards the Almighty for obvious reasons.

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AIMS AND OBJECTIVES:

1. To present detailed study on Securities Appealate Tribunal and its

powers and procedures.
2. To present detailed study on the topic composition and qualification for
Securities Appellate Tribunal.

RESEARCH METHODOLOGY:

For the purpose of research, the researcher has followed the doctrinal
method of research. The researcher has relied upon various primary and
secondary sources to look for information related to the information about
Securities Appellate Tribunal.

SOURCES OF DATA:

Sources of data include primary as well as secondary sources of data.

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 CONTENTS

1. Introduction
2. Power of Securities Appellate Tribunal
3. Procedures under Securities Appellate Tribunal
4. Composition and Qualification for Securities Appellate Tribunal
5. Conclusion
Bibliography

INTRODUCTION

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The Securities and Exchange Board of India (SEBI) is responsible for
protecting the interests of investors in securities and to promote the
development of, and to regulate the securities market and for all other connected
matters. To protect and be responsive to the needs of three groups of people
(issuer of securities, investors and market intermediaries), SEBI has been
invested with three necessary functions rolled-in to enable it to carry out its
mandate:

Quasi-legislative function = drafts regulations

Quasi-judicial = passes rulings and judgments; prosecute and judge
directly certain violations
Quasi-executive = investigation and enforcement actions.

Since these powers make SEBI a very powerful body, an appeal process has
been created to ensure accountability. For the quasi judicial functions, there is a
Securities Appellate Tribunal1, which is a three-member tribunal. A second
appeal lies directly to the Supreme Court. The first SAT was formed in 1995,
through a notification issued by the Central Government and therefore, is a
statutory body established under the provisions of Section 15K of the Securities
and Exchange Board of India Act, 1992 to: Hear and dispose of appeals against
orders passed by the Securities and Exchange Board of India or by an
adjudicating officer under the Act and, Exercise jurisdiction, powers and
authority conferred on the Tribunal by or under this Act or any other law for the
time being in force. The Tribunal is a three-member body composed of a
Presiding Officer and two other members who are to be nominated via a
notification by the Central Government. The Union Government also reserves
the right to notify as many SATs as is needed. The Securities Appellate

1 Inserted by the SEBI (Amendment) Act 32 of 1999, S.8 (w.e.f.16-12-1999).

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Tribunal has only one bench that sits at Mumbai 2 and has jurisdiction over all of
India.

Sahara-SEBI case

In early February this year, SAT disposed off an appeal by the Sahara group
saying that the matter was already pending before the Supreme Court. Two
Sahara Group firms have been accused of raising money without regulatory
approvals by the SEBI. The appeal related to the case involving two Sahara
group firms raising money without regulatory approvals. The legal battle with
market regulator SEBI is continuing in the Supreme Court over the refund of
over Rs 20,000 crore to investors.

Reliance Industries-SEBI

An insider trading case is being heard by the SAT for the past seven years. The

Spice Telecom IPO case

The Tribunal barred one Dipti Kirit Parekh from accessing the capital market
for two years for cornering shares issued in the initial public offer (IPO) of
Spice Communications back in 2007.3

2 http://taxguru.in/sebi/securities-appellate-tribunal-sat-insight.html

3 http://www.gktoday.in/securities-appellate-tribunal/

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 Power of Securities Appellate Tribunal

Powers of SAT [Sec 15U]

The SAT shall have, for the purpose of discharging their functions under SEBI
Act, 1992, the same powers as are vested in a Civil Court under the CPC, 1908,
while trying a suit, in respect of the following matters, namely:

1. Summoning and enforcing the attendance of any person and examining

him on oath.

2. Requiring the discovery and production of documents.

3. Receiving evidence on affidavits.

4. Issuing commissions for the examination of witness or documents.

5. Reviewing its decisions.

6. Dismissing an application for default or deciding it ex parte.

7. Setting aside any order of dismissal of any application for default or any
order passed by it ex parte

8. Any other matter which may be prescribed.4

4 http://taxguru.in/sebi/securities-appellate-tribunal-sat-insight.html

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 Procedures under Securities Appellate Tribunal

Appeal to SAT [Sec. 15T]5

Who can make appeal?

Any person aggrieved,
By an order of the SEBI ; or
By an order made by an adjudicating office
may prefer an appeal to SAT.

Exceptions: No appeal shall lie to SAT from an order made with the consent
of the parties.

Time Limit: The appeal to SAT shall be filed within a period of 45 days 6 from
the date of receiving the copy of the order of SEBI or adjudicating officer, as the
case may be. However, SAT may entertain an appeal after the expiry of 45 days,
if it is satisfied that there was sufficient cause for not filing it within that period.

SAT shall send copy of every order made by it to the following person:

5 Substituted by the Act 32 of 1999, S. 9 (w.e.f. 16-12-1999), for Sub-sec (1) & (2).

6 Substituted by the Act 32 of 1999, S. 9 (w.e.f. 16-12-1999), for a copy of the order made by the
adjudicating officer

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 SEBI
Concerned Adjudicating Officer7
Parities to Appeal.

Appeal against the Orders of SAT [Sec 15Z]

Any person aggrieved by any decision or order of SAT may file an appeal to the
Supreme Court. It may be noted that the appeal can be made only on any
Question of Law.

The appeal shall be filed within 60 days from the date of receiving a copy of the
decision or order of SAT. However, the Supreme Court may allow a further
period of 60 days for making an appeal, if it is satisfied that the applicant was
prevented by sufficient cause from filing the appeal within the first 60 days.

15U.Procedure of the Securities Appellate Tribunal. - (1) The Securities

Appellate Tribunal shall not be bound by the procedure laid down by the Code
of Civil Procedure, 1908(5 of 1908), but shall be guided by the principles of
natural justice and, subject to the other provisions of this Act and of any rules,
the Securities Appellate Tribunal shall have powers to regulate their own
procedure including the places at which they shall have their sittings.

(3) Every proceeding before the Securities Appellate Tribunal shall be

deemed to be a judicial proceeding within the meaning of sections 193 and 228,
and for the purposes of section 196 of the Indian Penal Code(45 of 1860), and
the Securities Appellate Tribunal shall be deemed to be a civil court for all the
purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure,
1973(2 of 1974).

7 Substituted by the Act 32 of 1999, S. 9(w.e.f. 16-12-1999), for parties

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15V.Right to legal representation8. - The appellant may either appear in person
or authorise one or more chartered accountants or company secretaries or cost
accountants or legal practitioners or any of its officers to present his or its case
before the Securities Appellate Tribunal.

Explanation:- For the purposes of this section,--

(a) "chartered accountant" means a chartered accountant as defined in

clause(b) of sub-section(1) of section 2 of the Chartered Accountants Act,
1949(38 of 1949) and who has obtained a certificate of practice under sub-
section (1) of section 6 of that Act;

(b) "company secretary" means a company secretary as defined in clause(c) of

sub-section(1) of section 2 of the Company Secretaries Act,1980(56 of 1980)
and who has obtained a certificate of practice under sub-section (1) of section 6
of that Act;

(c) " cost accountant" means a cost accountant as defined in clause(b) of sub-
section(1) of section 2 of the Cost and Works Accountants Act, 1959(23 of
1959) and who has obtained a certificate of practice under sub-section (1) of
section 6 of that Act;

(d) "legal practitioner" means an advocate, vakil or any attorney of any High
Court, and includes a pleader in practice.]

15W.Limitation. -The provisions of the Limitation Act, 1963 (36 of 1963),

shall, as far as may be, apply to an appeal made to a Securities Appellate
Tribunal.
8 Substituted by the Act 32 of 1999, S. 9(w.e.f. 16-12-1999), for S. 15V.

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15ROrders constituting Appellate Tribunal to be final and not to invalidate
its proceedings. -No order of the Central Government appointing any person as
the [67][Presiding Officer or a Member] of a Securities Appellate Tribunal shall
be called in question in any manner, and no act or proceeding before a
Securities Appellate Tribunal shall be called in question in any manner on the
ground merely of any defect in the constitution of a Securities Appellate
Tribunal.

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 Composition and Qualification for Securities Appellate Tribunal

SAT shall consist of the following:9

1. One Presiding officer

2. Two other members

Presiding Officer

The Presiding Officer of SAT shall be appointed by the Central Government in

consultation with the Chief Justice of India or his nominee.

The person to be appointed as the Presiding Officer must;

Be a sitting or retired Judge of the Supreme Court ; or

Be a sitting or retired Chief Justice of a High Court ; or
Be a sitting or retired Judge of a High Court, who has completed atleast 7
years of service.

The person so appointed shall hold office, earlier of the two

for a period of 5 years ; or

up to the age of 68 years

Members

The two members of SAT shall be appointed by the Central Government.

9 Substituted by the SEBI (Amendment)Act, 2002, S.20 (w.e.f. 29-10-2002), for Sections 15L and
15M.

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The person to be appointed must;

A person of ability, integrity and standing who has shown capacity in

dealing with problems relating to securities market.
Have qualification and experience of Corporate Law, Securities Law,
Finance, Economics or Accountancy.

Person shall hold office, earlier of the two,10

For a period of 5 years ; or

Upto age of 62 years.

Resignation And Removal.

(1) The Presiding Officer or any other Member of a Securities Appellate

Tribunal] may, by notice in writing under his hand addressed to the
Central Government, resign his office:11

Provided that [the Presiding Officer or any other Member] shall, unless he is
permitted by the Central Government to relinquish his office sooner,
continue to hold office, until the expiry of three months from the date of
receipt of such notice or until a person duly appointed as his successor enters
upon his office or until the expiry of his term of office, whichever is the
earliest.12

(2) The13 [Presiding Officer or any other Member] of a Securities Appellate

Tribunal shall not be removed from his office except by an order by the

10 Substituted by the SEBI (Amendment)Act, 2002, S.21 (w.e.f. 29-10-2002), for Sections 15N.

11 Substituted by the SEBI (Amendment)Act, 2002, S.24(a) (i) (w.e.f. 29-10-2002), for Presiding
Officer of a Securities Appellate Tribunal.

12 Substituted by the SEBI (Amendment)Act, 2002, S.24 (a) (ii) (w.e.f. 29-10-2002), for the said
Presiding Officer.

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 Central Government on the ground of proved misbehaviour or incapacity
after inquiry made by a Judge of the Supreme Court, in which
the [Presiding Officer or any other Member] concerned has been
informed of the charges against him and given a reasonable opportunity
of being heard in respect of these charges.
(3) The Central Government may, by rules, regulate the procedure for the
investigation of misbehavior or incapacity of the 14 [the Presiding Officer
or any other Member].

13 Substituted by the SEBI (Amendment)Act, 2002, S.24 (b) (w.e.f. 29-10-2002), for Presiding
Officer.

14 Substituted by the SEBI (Amendment)Act, 2002, S.24 (c) (w.e.f. 29-10-2002), for the said
Presiding Officer.

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 CONCLUSION

The Securities Appellate Tribunal is a statutory body established under the

provisions of Section 15(K) of the Securities and Exchange Board of India Act,
1992 to hear and dispose of appeals against orders passed by the Securities and
Exchange Board of India or by an adjudicating officer under the Act and to
exercise jurisdiction, powers and authority conferred on the Tribunal.

Section 15K of SEBI Act, 1992 empowers the Central Government to set up one
or more Tribunals, for the purpose making appeals against the orders of SEBI
and its adjudicating officers. These tribunals will be known as Securities
Appellate Tribunal (SAT). In exercise of the power conferred, the Central
Government has set up one Tribunal at Mumbai.

The Securities Appellate Tribunal is not be bound by the procedure laid down
by the Code of Civil Procedure, 1908, but is be guided by the principles of
natural justice and, subject to the other provisions of Depositories Act, 1996.
The Securities Appellate Tribunal has powers to regulate its own procedure
including the places at which it shall have its sittings. Every proceeding before
the Securities Appellate Tribunal is deemed to be a judicial proceeding and the
tribunal has all the powers of a Civil Court.

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 BIBLIOGRAPHY

Books

Academic Foundations Bulletin on Banking & Finance, Sona Kapila, Volume- 31

The Indian Mutual Fund Industry: A Comparative Analysis of Public v Private Sector
Performance, G.V. Satya Shekhar, Palgrave Macmilan Publications, 2014
Investment Analysis & Portfolio Management, M. Ranganatham & R. Madhumathi,
Dorling Kindersley (India) Pvt. Ltd., 2006
Finance Management: Principles & Practice, Sudhindra Bhat, Excel Books Pvt Ltd,
2nd Ed.
Corporate Law, Hemant Goel, Universal Law Publishing Co. Pvt. Ltd., 2010
Due Diligence & Corporate Governance, Dr. Linda S Spedding, LexisNexis
Publications Pvt Ltd.

Websites

www.taxguru.in
www.gktoday.in

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