Securities Appellate Tribunal (SAT) has been constituted in order to perform the quasi judicial functions. SAT has been established under section 15K of the Securities and Exchange Board of India Act, 1992. It is located in Mumbai.
The Securities and Exchange Board of India has been empowered with protection of the interests of investors. In order to do the same, it has to perform various quasi judicial, quasi legislative and quasi executive functions.
In order to ensure that these wide powers are not misused by SEBI, the provision of the first appeal against the decisions of the same has been given to SAT. After this, the final appeal lies to the SC.
APPOINTMENT AND QUALIFICATION
SAT is a three member tribunal wherein one member is a Presiding Officer. The Presiding officer is appointed by the Central Government with the consult of the CJI. The other two members are appointed by the Central Government.
The qualifications of the Presiding Officer are:
(a) he must be sitting or retired judge of Supreme Court, or
(b) sitting or retired CJ of High Court, or
(c) sitting or retired judge of HC who had completed seven years of service as a judge in HC.
The qualifications of the other two members are:
(a) He must be a person of ability and integrity;
(b) He must be a person who is known to have solved problems related to securities law;
(c) He needs to have qualifications in finance law, corporate law.
TENURE
The tenure of the presiding officer is for five years at a time or till he attains the age of 68 years, whichever is earlier. The tenure of the other two members is for five years at a time or till he attains the age of 62 years, whichever is earlier.
POWERS
Under the SEBI Act, the tribunal has been given the same powers which are vested with a civil code under CPC, 1908 while trying a suit. The same had been given in matters relating to:
(a) to summon and enforce the attendance of any person and examining him on oath;
(b) production of documents and discovery of the same;
(c) issue commissions for examining witnesses and documents;
(d) dismiss an application in case of default or having an ex parte decision;
(e) reviewing of decisions.
APPEAL PROCEDURES
The person who is allowed for appeal are:
(a) the persons who are the people aggrieved by the decision made by the SEBI or
(b) the person aggrieved by any other adjudicating officer under the SEBI Act.
The time for the appeals has also been set out under the Act. Under the same, the person shall file an appeal within 45 days from the time the copy of the order made by SEBI or any other adjudicating authority is received by the person.
If the appeal is not filed within 45 days, then an extension can be given by the SAT if the appropriate reason is given for the cause of such delay.
When SAT receives the appeal, then it will give an opportunity of hearing both the parties. After hearing them, the tribunal will arrive at a decision wherein it can confirm, modify or set aside the appeal made. The tribunal had to arrive at a conclusion within six months from the date of appeal.
FEW DECISIONS PASSED BY TRIBUNAL
-
PRICE WATER HOUSE COOPERS
In this, SEBI had put a ban of two years on PWC from auditing the listed companies from auditing as the firm’s name was linked to the Satyam scam.
The firm filed an appeal to SAT for putting a stay on the order of SEBI but the application for the same was refused by the tribunal. Although, the tribunal said that the firm can continue with the audit assignments until the end of March 2018. The firm cannot sign up with any new clients.
-
SAHARA LIFE INSURANCE
ICICI Prudential was asked by the Insurance Regulatory and Development Authority of India (IRDAI) to take over the Sahara Life Insurance giving the reason that the company is not able to maintain its solvency margin.
Against the same, Sahara approached SAT who had powers to hear the appeal against the orders passed by SEBI, IRDAI etc. Sahara’s contention was that the order of IRDAI is against the rules of natural justice. Also, the contention was that the decision was taken to benefit the third party.
Also, Sahara contended that the company is earning profits and the solvency margin is 8 as opposed to the required margin of 1.5. The SAT had for the time being put a status quo for the decision taken by IRDAI.
SEE ALSO: https://lawyersgyan.com/blog/debenture-trustee-its-position-rights-and-duties/
Visit our Instagram page @lawyergyan at this link.