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2023 (8) TMI 200 - AT - SEBIOrder directing SEBI to appoint another Whole Time Member (WTM) - no WTM at the present moment to hear and decide the matter - Delegation of Statutory and Financial Powers - HELD THAT - As a result of the delegation of powers stipulated in serial no. 19 and 19A, only the WTM under Serial no. 19 can consider the appellants reply and objection for modification / vacation of the ex-parte ad-interim order dated June 12, 2023. It is not known as to when the Central Government will appoint new WTM. The matter is one of urgency since the appellants have been restrained from acting as a directors and / or key managerial personnel of the company and have been further restrained from accessing the securities market and that is why we have framed the timeline to the WTM to pass an order within a stipulated period. We also find that under Clause 3(2) of the Order of 2019, the power and functions delegated to any member or officer of the Board or authority could be exercised by any officer or authority, higher in grade or rank or position. We direct SEBI to appoint another WTM and if no WTM is available, then any authorised officer higher in grade or rank or position to the WTM would hear and decide the matter. This would be in consonance with the Clause 3(2) of the Order of 2019 relating to delegation of powers dated July 31, 2019. The person who is appointed shall pass the order within the stipulated period as per paragraph no. 32 of our order dated July 10, 2023.
Issues involved:
The issues in this case involve the modification and clarification of an order dated July 10, 2023, regarding the appointment of a Whole Time Member (WTM) by the Securities and Exchange Board of India (SEBI) to consider objections in the matter. Judgment Details: Issue 1: Modification of Order for Appointment of WTM The Securities Appellate Tribunal had directed SEBI to appoint another WTM to consider objections, but due to circumstances where the available WTMs were not suitable, SEBI sought modification of the order. The Tribunal noted the delegation of powers under the Securities and Exchange Board of India (Delegation of Statutory and Financial Powers) Order, 2019, which specified that only the WTM could consider objections for modification of the order. Considering the urgency of the matter, the Tribunal modified the direction to allow SEBI to appoint any authorized officer higher in grade or rank to the WTM to hear and decide the matter within the stipulated period. Issue 2: Delegation of Powers under SEBI Order of 2019 The Tribunal referred to the Order of 2019, which delegated regulatory powers to the WTM, Chief General Manager, and Executive Director. It highlighted that the WTM had the authority to issue directions under specific sections of the SEBI Act, especially in cases requiring interim, confirmatory, or revocation orders. The Tribunal emphasized the importance of timely resolution due to the appellants' restrictions and the need for a decision within the specified timeline. Issue 3: Modification of Tribunal's Order In light of the powers delegated under the Order of 2019 and the urgency of the matter, the Tribunal modified its previous direction to allow SEBI to appoint an authorized officer higher in grade or rank to the WTM to address objections and pass further orders. This modification aligned with Clause 3(2) of the Order of 2019, ensuring a fair and unbiased decision-making process. The Tribunal directed SEBI to act promptly and ensure compliance with the revised order. Conclusion: The Tribunal, recognizing the need for a timely resolution and adherence to delegated powers, modified its previous order to facilitate the appointment of an authorized officer to address objections and pass further orders. This decision aimed to ensure a fair and unbiased process in line with the regulatory framework established by SEBI.
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