Appeal to Securities Appellate Tribunal

By | August 11, 2019
Securities Appellate Tribunal

The orders passed by SEBI are appealed against the forum called Securities Appellate Tribunal – SAT. The review done by SAT by virtue of its appellate jurisdiction is plenary in nature. This is so because it becomes similar to a trial court and is empowered to take the law into consideration, to consider all the relevant materials and to make the decision on those facts that were the basis of the decision against which the appeal.


Appeals arising out of the decisions of Board between the span of 1992 and 1999 were preferred before the Appellate Authority set by the Central Board as per sec 20. The decisions passed by SAT were appealable before the High Court under sec 15Z. The orders that were passed by the whole time board of SEBI were also appealed before SAT by virtue of the amendment to sec 20. This amendment was done by passing the Securities Laws (Second Amendment) Act, 1999.

On the other hand, sec 15Z got amended by virtue of SEBI (Amendment) Act, 2002 that was the basis to appeal before the Apex Court of India. The amendment brought in 2002 led to the creation of a single forum before which the appeal against the orders of SEBI and the Adjudication Officer lied. Such a forum is known as Securities Appellate Tribunal.

An appeal is nothing but the continuation of the original adjudication as was observed in Hasmat Rai v Raghunath Prasad.[1] The appeal can be made on the basis of two grounds as per sub-section (1) of sec 15T of the SEBI Act, 1992. First, the appeal must be made against an order passed by the adjudicating officer or the Board of SEBI. Second, an appeal should be made by the person who is aggrieved from such a decision. The appeal is maintainable only if these above-mentioned conditions get fulfilled.


A decision that gets implemented in the form of a command is understood to be an order at the grass-root level. The distinction between an order and advice or a request lies on the nature of consequences that arises out on their non- compliance.[2]

The division bench of Bombay High Court came out with a restricted interpretation of sec 15Z by observing that there lies no appeal against an order. However, to appeal against an order, it should be formally adjudicated and be capable to affect the rights of an individual. Further, if an order cannot be appealed against merely on the grounds of violation of procedural law. It was interpreted on the same lines that there can be no appeal against an interlocutory order passed under Sec 15T. this is so because an interlocutory order is the one that cannot affect the rights of any individual.[3]

Securities Appellate Tribunal provided a different view with respect to the above-mentioned observation of Bombay High Court. It was held that there should be a liberal interpretation of the provision with respect to appeal under sec 15T and thus, every order passed by SEBI should be appealable without any kind of limitation.[4] Further, it was also observed by Securities Appellate Tribunal that the word ‘order’ as per this provision has a very wide scope that includes every decision or order that the Board takes. But it is necessary that such an order should adversely affect the rights of an individual.[5]


When the specific internal appellate process gets exhausted, SEBI passed orders that impose a penalty as per the provisions of SEBI (Employee Service) Regulations, 2001 can be appealed before the Securities Appellate Tribunal. This opportunity of appeal is provided because such orders are quasi-judicial in nature.

The SEBI (Employees Service) Regulations, 2001 lays down a mechanism for intra-SEBI appeals against the orders that were passed by virtue of Regulation 79 or suspension under Regulation 86.[6] It is important to avail the remedy provided under these regulations before appealing against the order. Bombay High Court had refused to entertain a writ petition on the basis of this ground.[7]

Apart from the above observations, the jurisdiction of Securities Appellate Tribunal can be invoked in the matters relating to services and arising out of the SEBI (Employees Service) Regulations, 2001. However, there is no instance reported yet indicating SAT has either entertained or refused to entertain any appeal in such matters.


It is noteworthy that a person who is aggrieved by the orders of SEBI is empowered to appeal against an order while no other person can do so. It may also be understood as locus standi to file the appeal before SAT lies only with the person who is aggrieved by an order of SEBI. Further, any person who is aggrieved is entitled to file an appeal no matter whether he was a part of the proceedings going before the Board.[8] However, the third party to lis is not empowered to appeal for getting the penalty imposed by SEBI enhanced with the motive of settling person scores.[9]

It was held by Supreme Court that mere disappointment with the decision does not become the valid ground to file the appeal but it is important for an order to cause a legal grievance by depriving the person of something in a wrongful manner.[10] SAT by virtue of Jasbhai Motibhai Desai v Roshan Kr & Ors[11] laid down the test so that there can be an easy distinction between the busy body of meddling some interlopers, strangers and persons aggrieved. The persons, who tend to interfere with the things that are not of their concern, falls under the category of meddlesome interlopers. Not only this but they also act in the name of Pro Bono Publico even when they have no interest in the general public or their own which has to be protected.[12] 


Subsection 2 of sec 15T of the SEBI Act provides for consent mechanism.

It is an established principle that an individual who has given his consent either in express or implied terms to anything cannot be construed as an ‘aggrieved person’. However, the SAT has iterated this principle in different words. It was held by SAT that an individual who has agreed to something cannot become aggrieved by the same later.[13]

The consent mechanism prescribed under the SEBI Act has been borrowed from the aspects of the settlement model that has been adopted by the Securities Exchange Commission of the United States. Pursuant to which, the model of consent mechanism provided by SEBI is akin to the one provided by SEC.

Though the power to settle the matter with the help of consent mechanism is not provided by the Act in a specific manner, SEBI had mooted a proposal for getting the Act amended so that it also provides the same in an explicit manner under sec 24A to get the mist of the legality of the consent mechanism clarified.[14]


The Act also prescribes a limitation period of 45 days for filing an appeal before SAT by virtue of subsection (3) of the sec 15T. The span of 45 days will be calculated from that day on which the person aggrieved from the order of the adjudicating authority or the Board receives a copy of that order. However, if the person successfully proved that there was a sufficient cause due to which the appeal was delayed, the SAT is empowered to entertain the appeals even when the span of 45 days got expired.[15]

The tribunals/ courts are typically liberal when it comes to entertaining the appeals that are not filed within the prescribed time span. However, this cannot be construed that the Limitation Act has no applicability in such cases. There has to be a presence of sufficient cause showing the reason for the delay in the appeal.[16] The rules of limitation had been designed to keep a check in terms of the parties resorting to dilatory tactics and seeking the remedy available to them promptly.[17]

It is relevant to consider the presentation of appeal in the Registry of the Tribunal for calculating the time span for getting an appeal the filed.[18] It cannot be said that the appeal was filed if it was not filed with the requisite fees. Further, till the time shortfall has been made good, the period for the purposes of limitation will continue.[19]


The orders passed by SEBI are appealed against the forum called SAT. The review done by SAT by virtue of its appellate jurisdiction is plenary in nature. This is so because it becomes similar to a trial court and is empowered to take the law into consideration, to consider all the relevant materials and to make the decision on those facts that were the basis of the decision against which the appeal lies.[20]

It was also observed by SAT that it has been empowered to examine the facts of the case in a fresh manner, to make an evaluation of the evidence and scrutinize the impugned decision with respect to the applicable law. The use of these powers should be made only in those matters where the final decision has been delivered and not in those cases where the full-fledged inquiry is still not complete.[21]

Further, a new ground on the basis of new facts and going beyond the ambit of the impugned order cannot be raised with the help of appeal.[22] The first appellate court has been provided with a wide range of powers for examining the questions based on both law and facts by virtue of sec 96 read with Order 43 Rule 1 of the Civil Procedure Code, 1908.[23]


It is mandated for Securities Appellate Tribunal to serve the copy of the order to every party before it. The order for this purpose can be both interim or final. This mandate has been created by virtue of subsection 5 of section 15T.


Another mandate over Securities Appellate Tribunal is created by virtue of subsection 6 of section 15T. This mandate requires from SAT to deal the matters as expeditiously as possible. Further, the SAT has to take steps for getting the appeal disposed of within the time span of 6 months from the date when the appeal was received.

[1] (1981) 3 SCC 103

[2] Eider E-Commerce v. SEBI, Appeal No 20/ 2000, SAT Order dated 12.01.2001

[3] Harinarayan G Bajaj v. Securities Appellate Tribunal & Anr, [2003] 42 SCL 548

[4] NSDL v SEBI, Appeal No. 207/ 2005, SAT Order 29.09.2006

[5] Bharat Jayantilal Patel v.  SEBI, Appeal No. 126/ 2010, SAT Order dated 15.09.2010. In this case, when the enquiry officer was presented with the question of whether the appellant is empowered to cross-examine the person whose statements are sought to be relied upon, he answered the question in negative. It was also observed by SAT in relation to this issue that the same is final qua the enquiry and the same is an order amenable to appeal

[6] Regulation 88 of SEBI (Employees Service) Regulations, 2001

[7] Girreddi Suryanarayana Reddy v. SEBI, MANU/ MH/ 0547/ 2009. See also, S Vidyashankar v Union of India & Ors, MANU/ TN/ 3426/ 2006 where the order discharging an employee from his service under SEBI Service Regulations, 1988 during the period of probation was neither found to be punitive nor stigmatic by the Madras High Court

[8] Videocon International v. SEBI, Appeal Nos. 23 – 26/ 2002. Order dated 20.06.2002

[9] Suresh Kabra v. SEBI, Appeal No. 119/ 2004, SAT Order dated 22.11.2005

[10] Adi Pherozshah Gandhi v. H M Servai, AIR 1971 SC 385

[11] AIR 1976 SC 578

[12] Northern Projects Ltd. v. The Adjudicating Officer, SEBI, Appeal No 55/ 2011, SAT Order dated 29.08.2011

[13] Sukumar Chand Jain v. SEBI, Appeal No 25/ 2008, SAT Order dated 10.04.2008. See also, Rusoday Securities Ltd v National Stock Exchange India Ltd & Ors, [2009] 90 SCL 154 (SAT)

[14] Para 2.6.6 of agenda note for item no 13, in respect of 124th Meeting of SEBI Board dated 18.06.2009

[15] M/s Capetown Mercantile Company (P) Ltd v SEBI, Misc. Appeal No. 50/ 2011 in Appeal No 106/ 2011, SAT Order dated 21.07.2011

[16] Zodiac Com Solutions (P) Ltd v SEBI, Misc Appeal No 24/ 2006 in Appeal No 105/ 2006, SAT Order dated 25.08.2006

[17] Munjal Investments v SEBI, Appeal No. 16/ 2000, SAT Order dated 06.10.2000. See also, Ridah Farms Pvt Ltd v SEBI, Application No 16/ 2002 in Appeal No 26/ 2002, SAT Order dated 11.06.2002; M/s R C Gupta & Co Pvt Ltd v SEBI, Misc Appl No 36/ 2006 in Appeal No 133/ 2006, SAT Order dated 10.11.2006

[18] R K Agarwal v SEBI,. Appeal No 1/ 2001. SAT Order dated 30.04.2001

[19] M/s R C Gupta & Co Pvt Ltd v. SEBI, Misc Appl No 36/ 2006 in Appeal No 133/ 2006, SAT Order dated 10.11.2006

[20] Rhodia S A v. SEBI, Appeal no 36/ 2001, SAT Order dated 07.11.2001

[21] Shankar Sharma v. SEBI, Appeal No 29/ 2001, SAT Order dated 25.06.2001

[22] LKP Securities v. SEBI, [2003] 41 SCL 1

[23] Chaco & Anr v. Mahadevan, (2007) 7 SCC 363. See also, Roop Singh v Ram Singh, (2000) 3 SCC 708; Nune Prasad v Nune Ramakrishan, (2008) 8 SCC 258

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Akriti Gupta
Author: Akriti Gupta

Akriti Gupta is a fourth-year learner of BBA LLB programme in Symbiosis Law School, NOIDA. She has done moots and has various publications in her name. Mooting and research papers have helped her a lot to enhance her researching and drafting abilities.

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