POWER AND

FUNCTION OF
SECURITIES
APPELATE
TRIBUNAL
SANDEEP CHAWDA
BALLB 4TH YEAR
ACKNOWLEDGEMENT

I would like to express profound gratitude to prof. Qazi Usman , for his invaluable
support, encouragement, supervision and useful suggestions throughout this research work. His
moral support and continuous guidance enabled me to complete my work successfully. His
intellectual thrust and blessings motivated me to work rigorously on this study. In fact this study
could not have seen the light of the day if his contribution had not been available.

1
 CONTENTS

SECURITIES APPELLATE TRIBUNAL

- ESTABLISHMENT
- COMPOSITION
- QUALIFICATION FOR APPOINTMENT
- PROCEDURE FOR FILING APPEALS
APPEAL TO SECURITIES APPELLATE
POWERS TO SECURITIES APPELLATE TRIBUNAL
DELISTING SECURITIES
APPEAL TO SUPREME COURT
POWERS AND FUNCTIONS OF REGISTRAR
CONCLUSION
BIBLIOGRAPHY

2
Securities Appellate Tribunal

Securities Appellate Tribunal 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 to exercise jurisdiction, powers and authority conferred on the Tribunal
by or under this Act or any other law for the time being in force. SAT (Securities Appellate
Tribunals) is the appellate authority for capital market decisions taken by the Securities &
Exchange Board of India.

Establishment of Securities Appellate

Tribunals.-
(1) The Central Government shall, by notification, establish one or more Appellate Tribunals to
be known as the Securities Appellate Tribunal to exercise the jurisdiction, powers and authority
conferred on such Tribunal by or under this Act [or any other law for the time being in force.]
(2) The Central Government shall also specify in the notification referred to in sub-section (1)
the matters and places in relation to which the Securities Appellate Tribunal may exercise
jurisdiction.

3
Composition of Securities Appellate Tribunal.
A Securities Appellate Tribunal shall consist of a Presiding Officer and two other Members, to
be appointed, by notification, by the Central Government:1
Provided that the Securities Appellate Tribunal, consisting of one person only, established before
the commencement of the Securities and Exchange Board of India (Amendment) Act, 2002, shall
continue to exercise the jurisdiction, powers and authority conferred on it by or under this Act or
any other law for the time being in force till two other Members are appointed under this section.

Qualification for appointment as Presiding Officer or Member of the Securities Appellate

Tribunal.
(1) A person shall not be qualified for appointment as the Presiding Officer of a Securities
Appellate Tribunal unless he is a sitting or retired Judge of the Supreme Court or a sitting or
retired Chief Justice of a High Court:
Provided that the Presiding Officer of the Securities Appellate Tribunal shall be appointed by the
Central Government in consultation with the Chief Justice of India or his nominee.2
(2) A person shall not be qualified for appointment as Member of a Securities Appellate Tribunal
unless he is a person of ability, integrity and standing who has shown capacity in dealing with
problems relating to securities market and has qualification and experience of corporate law,
securities laws, finance, economics or accountancy:
Provided that a member of the Board or any person holding a post oat senior management level
equivalent to Executive Director in the Board shall not be appointed as Presiding Officer or
Member of a Securities Appellate Tribunal during his service or tenure as such with the Board or
within two years from the date on which he ceases to hold office as such in the Board.

Tenure of office of Presiding Officer and other Members of Securities Appellate Tribunal.

1 Given under Section 15 L of Securities Exchange Board of India Act 1992.

2 Given under Section 15 M Securities Exchange Board of India Act 1992.

4
The Presiding Officer and every other Member of a Securities Appellate Tribunal shall hold
office for a terms of five years from the date on which he enters upon his office and shall be
eligible for re-appointment:
Provided that no person shall hold office as the Presiding Officer of the Securities Appellate
Tribunal after he has attained the age of sixty-eight years:
Provided further that no person shall hold office as Member of the Securities Appellate Tribunal
after he has attained the age of sixty-two years.3

Salary and allowances and other terms and conditions of service of Presiding Officers
Section 15 O provides that salary and allowances payable to and the other terms and conditions
of service including pension, gratuity and other retirement benefits of the Presiding Officer and
other Members of a Securities Appellate Tribunal shall be such as may be prescribed. 4
However neither the salary and allowances nor the other terms and conditions of service of the
[Presiding Officer and other Members of a Securities Appellate Tribunal] shall be varied to their
disadvantage after appointment.5

Filling up of Vacancies

If, for reason other than temporary absence, any vacancy occurs in the6 office of the Presiding
Officer or any other Member of a Securities Appellate Tribunal, then the Central Government
shall appoint another person to fill the vacancy and the proceedings may be continued before
the Securities Appellate Tribunal from the stage at which the vacancy is filled.

3 Given under section 15 N Securities Exchange Board of India Act 1992.

4 Substituted for “Presiding Officer of a Securities Appellate Tribunal” by the SEBI (Amendment) Act 2002, w.e.f.
29-10-2002

5 Substituted for “Presiding Officer”, by the SEBI (Amendment) Act 2002, w.e.f. 29-10-2002

6 Substituted for “said Presiding Officer”, by the SEBI (Amendment) Act 2002, w.e.f. 29-10-2002.

5
Resignation and Removal
Section 15Q (1) provides that the 7Presiding Officer or any other Member of a Securities
Appellate Tribunal may, by notice in writing addressed to the Central Government, resign his
office: 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.
Section 15Q (2) provides that the Presiding Officer shall not be removed from his office except
by an order by the Central Government on the ground of proved misbehavior or incapacity
after an 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.
Section 15Q (3) The Central Government may, by rules, regulate the procedure for the
investigation of misbehavior or incapacity of the Presiding Officer or any other Member.8

Procedure for filing appeals

(1) A memorandum of appeal shall be presented in the form annexed to these rules by the
Appellant either in person to the Registrar of the Appellate Tribunal within whose jurisdiction
his case falls or shall be sent by registered post addressed to such Registrar.

(2) Where the appellant is company a memorandum of appeal may be preferred, -

(a) By one or more legal practitioners authorized by such company; or

7 Substituted for “Presiding Officer”, by the SEBI (Amendment) Act 2002, w.e.f. 29-10-2002.

8 www.sebi.gov.in/commreport/clause49.htm

6
(b) By any of the officers of such company to act as Presenting Officers and every person so
authorized may present the appeal before the Appellate Tribunal.

(3) Where the appellant is other than a company he may prefer an appeal in person or by his
agent or by a duly authorized legal practitioner.

(4) An appeal sent by post under sub-rule (1) shall be deemed to have been presented to the
Registrar on the day on which it is received in the office of the Registrar.

(5) The appeal under sub-rule (1) shall be presented in four sets in a Paper Book along with an
empty file size envelope bearing full address of the respondent and where the number of
respondents are more than one, then sufficient number of extra paper books together with empty
file size envelope bearing full addresses of each respondent shall be furnished by the appellant.
Presentation and scrutiny of memorandum of appeal 9

6. (1) The Registrar shall endorse on every appeal the date on which it is presented under that
rule and shall sign endorsement.
(2) If, on scrutiny, the appeal is found to be in order, it shall be duly registered and given a serial
number.
(3) If an appeal on scrutiny is found to be defective and the defect noticed is formal in nature, the
Registrar may allow the appellant to rectify the same in his presence and if the said defect is not
formal in nature, the Registrar, may allow the appellant such time to rectify the defect as he may
deem fit.
(4) If the concerned appellant fails to rectify the defect within the time allowed in sub-rule (3),
the Registrar may by order and for reasons to be recorded in writing, decline to register such
memorandum of appeal.
(5) An appeal against the order of the Registrar under sub-rule (4) shall be made within fifteen
days of making of such order to the Presiding Officer concerned in his chamber, whose decision
thereon shall be final.

9 www.icsi.edu/WebModules/LinksOfWeeks/CS_NOV2013.pdf

7
Place of filing memorandum of appeal

7. The memorandum of appeal shall be filed by the appellant with the Registrar of the Appellate
Tribunal having jurisdiction in the matter.

Deposit of amount of penalty

9. Where an appeal is preferred by a person under section 15T of the Act, such appeal shall not
be entertained by the Appellate Tribunal unless such person has deposited with the Appellate
Tribunal the amount of penalty imposed by the Adjudicating Officers.
Provided that the Appellate Tribunal may, for reasons to be recorded in writing, waive or reduce
the amount to be deposited with the Appellate Tribunal.
Contents of memorandum of appeal 10

10. (1) Every memorandum of appeal filed under rule 5 shall set forth concisely under distinct
heads, the grounds of such appeal without any argument or narrative, and such grounds shall be
numbered consecutively and shall be typed in double line space on one side of the paper.
(2) It shall not be necessary to present separate memorandum of appeal to seek interim order or
direction if in the memorandum of appeal, the same is prayed for.
Documents to accompany memorandum of appeal

11. (1) Every memorandum of appeal shall be triplicate and shall be accompanied with two
copies (at least one of which shall be certified copy) of the order of Division Chief under Chapter
VI A of the Act against which the appeal is filed.
(2) Where the parties to the appeal are being represented by an agent, documents authorizing him
to act as such agent shall also be appended to the appeals.
Provided that where an appeal is filed by a local practitioner, it shall be accompanied by a duly
executed Vakalatnama.

10 http://www.nyse.com/Frameset.html?displayPage=/listed/1022540125610.html

8
(3) Where a company is being represented by any of its Officers to act as Presenting Officer
before the Appellate Tribunal, the document authorizing him to act as Presenting Officer shall be
appended to the memorandum of appeal. 11

Plural remedies

12. A memorandum of appeal shall not seek relief or reliefs based on more than a single cause of
action in one single memorandum of appeal unless the reliefs prayed for are consequential to one
another. Endorsing copy of appeal to the Board

13. A copy of the memorandum of appeal and paper book shall be served on the Board, as soon
as they are filed, by the Registrar by registered post.
Filing of reply to the appeal and other documents by the respondent or the Board

14. (1) The respondent or the Board may file four complete sets containing the reply to the
appeal along with documents in a paper book form12 with the registry within one month of the
service of the notice on him of the filing of the memorandum of appeal.
(2) The respondent or the Board shall also endorse one copy of the reply to the appeal along with
documents as mentioned in sub-rule (1) to the appellant.
(3) The Appellate Tribunal may, in its discretion on application by the respondent or the Board,
allow the filing of reply referred to in sub-rule (1), after the expiry of the period referred to
therein.
Date and place of hearing to be notified
15. The Appellate Tribunal shall notify the parties the date and place of hearing of the appeal in
such a manner as the Presiding Officer may by general or special order direct.

11 www.oecd.org/dataoecd/3/10/43056196.pdf

12 http://www.sebi.gov.in/acts/act18f1.html

9
Appeal to the Securities Appellate Tribunal. –
Section 15(T) provides13 an opportunity to a person aggrieved,-
(a) by an order of the Board made, on and after the commencement of the Securities Laws
(Second Amendment) Act, 1999, under this Act, or the rules or regulations made thereunder; or
(b) By an order made by an adjudicating officer under this Act, may prefer an appeal to a
Securities Appellate Tribunal having jurisdiction in the matter.

15(T) (2) No appeal shall lie to the Securities Appellate Tribunal from an order made__
(a) By the Board on and after the commencement of the Securities Laws (Second Amendment)
Act, 1999;
(b) By an adjudicating officer, with the consent of the parties.

(3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the
date on which [a copy of the order made by the Board or the adjudicating officer, as the case may
be,] is received by him and it shall be in such form and be accompanied by such fee as may be
prescribed 14:
Provided that the Securities Appellate Tribunal may entertain an appeal after the expiry of the
said period of forty-five days if it is satisfied that there was sufficient cause for not filing it
within that period.

13 Substituted for Sub-sec (1) & (2) by the SEBI (Amendment) Act 1999, w.e.f. 16-12-1999. Prior to their
substitution, Sub-sections (1) & (2) were read as under: “(1) Save as provided in sub-section (2), any person
aggrieved by any order made by any Adjudicating Officer under this Act, may prefer an appeal to a Securities
Appellate Tribunal having jurisdiction in the matter. (2) No appeal shall lie to the Securities Appellate Tribunal from
an order made by an Adjudicating Officer with the consent of the parties.”

14 Substituted for “a copy of the order made by the adjudicating officer” by SEBI (Amendment) Act 1999, w.e.f. 16-
12-1999

10
(4) On receipt of an appeal under sub-section (1), the Securities Appellate Tribunal may, after
giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it
thinks fit, confirming, modifying or setting aside the order appealed against. 15

(5) The Securities Appellate Tribunal shall send a copy of every order made by it to the [Board,
the parties] to the appeal and to the concerned Adjudicating Officer.

(6) The appeal filed before the Securities Appellate Tribunal under sub-section
(1) Shall be dealt with by it as expeditiously as possible and endeavor shall be made by it to
dispose of the appeal finally within six months from the date of receipt of the appeal.16

Powers of Securities Appellate Tribunal:

Section 15U (1) provides that the Securities Appellate Tribunal shall not be bound by procedure
laid down by CPC, 1908, but shall be guided by the principles of natural justice, and subject to
the provisions of this Act and of any rules, the SAT shall have powers to regulate their own
procedure including the placing at which they shall have their sittings.17
Section 15U(2) provides that the Securities Appellate Tribunal shall have, for the purpose of
discharging their functions under this Act, the same powers as are vested in a civil court under
the Code of
Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters,
namely:—

15 Substituted for “parties”, SEBI (Amendment) Act 1999, w.e.f. 16-12-1999

16 www.oecd.org/dataoecd/3/10/43056196.pdf

17 www.sebi.gov.in/cms/sebi_data/attachdocs/1413803106939.pdf

11
(a) Summoning and enforcing the attendance of any person and examining him on oath;
(b) Requiring the discovery and production of documents;
(c) Receiving evidence on affidavits;
(d) Issuing commissions for the examination of witnesses or documents;
(e) Reviewing its decisions;
(f) Dismissing an application for default or deciding it ex parte;
(g) Setting aside any order of dismissal of any application for default or any order passed by it ex
parte; and
(h) Any other matter which may be prescribed.
Section 15U (3) provides that 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).

Civil court not to have jurisdiction.

No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter
which a Securities Appellate Tribunal is empowered by or under this Act to determine and no
injunction shall be granted by any court or other authority in respect of any action taken or to be
taken in pursuance of any power conferred by or under this Act.

12
Delisting of securities
(1) A recognized stock exchange may delist the securities, after recording the reasons therefore,
from any recognized stock exchange on any of the ground or grounds as may be prescribed under
this Act:
(2) A listed company or an aggrieved investor may file an appeal before the Securities Appellate
Tribunal against the decision of the recognized stock exchange delisting the securities within
fifteen days from the date of the decision of the recognized stock exchange delisting the
securities and the provisions of sections 22B to 22E of this Act, shall apply, as far as may be, to
such appeals:
Provided that the Securities Appellate Tribunal may, if it is satisfied that the company was
prevented by sufficient cause from filing the appeal within the said period, allow it to be filed
within a further period not exceeding one month.18
Right of appeal against refusal of stock exchanges to list securities of public companies.

Where a recognized stock exchange acting in pursuance of any power given to it by its bye-laws,
refuses to list the securities of any public company [or collective investment scheme], the
company[or scheme] shall be entitled to be furnished with reasons for such refusal, and may,—
(a) Within fifteen days from the date on which the reasons for such refusal are furnished to it, or
(b) where the stock exchange has omitted or failed to dispose of, within the time specified in sub-
section (1) of section 73 of the Companies Act, 1956(hereafter in this section referred to as the
“specified time”), the application for permission for the shares or debentures to be dealt with on
the stock exchange, within fifteen days from the date of expiry of the specified time or within
such further period, not exceeding one month, as the Central Government may, on

18
http://www.ifc.org/wps/wcm/connect/6ab71c8048a7e7b3accfef6060ad5911/Focus_ENFCorpGov3.pdf?MOD=AJP
ERES

13
sufficient cause being shown, allow, appeal to the Central Government against such refusal,
omission or failure, as the case may be, and thereupon the Central Government may, after giving
the stock exchange an opportunity of being heard,—
(i) Vary or set aside the decision of the stock exchange, or
(ii) Where the stock exchange has omitted or failed to dispose of the application within the
specified time, grant or refuse the permission, and where the Central Government sets aside the
decision of the recognized stock exchange or grants the permission, the stock exchange shall act
in conformity with the orders of the Central Government.

Appeal to Supreme Court.

Section 15 Z provides that any person aggrieved by any decision or order of the Securities
Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of
communication of the decision or order of the Securities Appellate Tribunal to him on any
question of law arising out of such order:
Provided that the Supreme Court may, if it is satisfied that the appellant was prevented by
sufficient cause from filing the appeal within the said period, allow it to be filed within a further
period not exceeding sixty days.19

19 Substituted for section15Z by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002. Prior to its substitution, it
read as under:- “15Z. Appeal to High Court.- Any person aggrieved by any decision or order of the Securities
Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the
decision or order of the Securities Appellate Tribunal to him on any question of fact or law arising out of such
order: Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from
filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.”

14
Right of appeal to Securities Appellate Tribunal against refusal of stock exchange to list
securities of public companies
(1) Where a recognized stock exchange, acting in pursuance of any power given to it by its bye-
laws, refuses to list the securities of any company, the company shall be entitled to be furnished
with reasons for such refusal, and may,—
(a) Within fifteen days from the date on which the reasons for such refusal are furnished to it, or
(b) Where the stock exchange has omitted or failed to dispose of, within the time
specified in sub-section (1A) of section 73 of the Companies Act, 1956 (1 of 1956), (hereafter in
this section referred to as the “specified time”), the application for permission for the shares or
debentures to be dealt with on the stock exchange, within fifteen days from the date of expiry of
the specified time or within such further period, not exceeding one month, as the Securities
Appellate Tribunal may,
on sufficient cause being shown, allow, appeal to the Securities Appellate Tribunal having
jurisdiction in the matter against such refusal, omission or failure, as the case may be, and
thereupon the Securities Appellate Tribunal may, after giving the stock exchange, an opportunity
of being heard,—
(i) Vary or set aside the decision of the stock exchange; or
(ii) Where the stock exchange has omitted or failed to dispose of the application within the
specified time, grant or refuse the permission, and where the Securities Appellate Tribunal sets
aside the decision of the recognized stock exchange or grants the permission, the stock exchange
shall act in conformity with the orders of the Securities Appellate Tribunal.
(2) Every appeal under sub-section (1) shall be in such form and be accompanied by such fee as
may be prescribed.
(3) The Securities Appellate Tribunal shall send a copy of every order made by it to the Board
and parties to the appeal.
(4) The appeal filed before the Securities Appellate Tribunal under sub-section (1) shall be dealt
with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal
finally within six months from the date of receipt of the appeal.

15
Powers and functions of the Registrar
(1) The Registrar shall have the custody of the records of the Appellate Tribunal and shall
exercise such other functions as are assigned to him under these rules or by the Presiding Officer
by a separate order in writing. 20
(2) The official seal shall be kept in the custody of the Registrar.
(3) Subject to any general or special direction by the Presiding Officer, the seal of the Appellate
Tribunal shall not be affixed to any order, summons or other process have under the authority in
writing from the Registrar. 21
(4) The seal of the Appellate Tribunal shall not be affixed to any certified copy issued by the
Appellate Tribunal save under the authority in writing of the Registrar.

Additional powers and duties of Registrar

In addition to the powers conferred elsewhere in these rules, the Registrar shall have the
following powers and duties subject to any general or special orders of the Presiding Officer
namely:-
(1) to receive all appeals and other documents;
(2) to decide all question arising out of the scrutiny of the appeals before they are registered;
(3) to require any appeal presented to the Appellate Tribunal to be amended in accordance with
the rules;
(4) subject to the directions of the Presiding Officer to fix date of hearing of the appeals or other
proceedings and issue notices thereof;
(5) direct any formal amendment of records;

20 Substituted for section15Z by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002. Prior to its substitution, it
read as under:- “15Z. Appeal to High Court.- Any person aggrieved by any decision or order of the Securities
Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the
decision or order of the Securities Appellate Tribunal to him on any question of fact or law arising out of such
order: Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from
filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.”

21 Substituted by the Depositories (Appeal to Securities Appellate Tribunal) (Amendment) Rules, 2005 w.e.f.
31.1.2005. Prior to its substitution, sub-rule (4) read as under: “Subject to any general or special direction by the
Presiding Officer, the official seal of the Appellate Tribunal shall not be affixed to any order, summons or other
process save under the authority in writing from the Registrar.”

16
(6) to order grant of copies of documents to parties to proceedings;
(7) to grant leave to inspect the record of Appellate Tribunal;
(8) dispose of all matters relating to the service of notices or other processes, application for the
issue of fresh notice or for extending the time for or ordering a particular method of service on a
respondent including a substituted service by publication of the notice by way of advertisements
in the newspapers;
(9) to requisition records from the custody of any court or other authority.

CONCLUSION
SAT body may get more powers
The Securities Appellate Tribunal (SAT) will be the umbrella financial markets appellate
tribunal and suitably renamed.
The government is considering a common appellate authority for insurance and all instruments
traded on the stock or commodity exchanges. This comes after the formation of the Financial
Stability Development Council, a statutory body to coordinate the functioning of financial
market regulators.

17
Bibliography

http://www.sebi.gov.in/acts/act15ac.html

http://www.moneycontrol.com/news-topic/securities-appellate-tribunal/

http://www.sebi.gov.in/acts/act18f1.html

http://sat.gov.in/ENGLISH/PDF/E0000_RT12.PDF

http://www.rawlaco.in/detail/5793.aspx

http://www.sebi.gov.in/acts/depositories.pdf

http://www.sebi.gov.in/cms/sebi_data/attachdocs/1379572440984.pdf

18