APPEAL BEFORE SECURITIES APPELLATE TRIBUNAL

[Mr. M. GOVINDARAJAN]

Tribunal

Section 15K of Securities and Exchange Board of India Act, 1992 (‘Act’ for short) provides that the Central Government shall, by notification, establish a Tribunal to be known as the Securities Appellate Tribunal (‘SAT’ for short) 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.  The SAT has only one Bench situated at Mumbai.

Appeal to SAT

Section 15T of the Act provides that any person aggrieved-

• 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 there under; or
•  by an order made by an adjudicating officer under this Act;
• by an order of the Insurance Regulatory and Development Authority or the Pension Fund Regulatory and Development Authority,

may prefer an appeal to a Securities Appellate Tribunal having jurisdiction in the matter.

Consequent to Government Notification No.DL-33004/99 dated 27th May, 2014, SAT hears and disposes of appeals against orders passed by the Pension Fund Regulatory and Development Authority (PFRDA) under the PFRDA Act, 2013. Further, in terms of Government Notification No. DL-(N)/04/0007/2003-15 dated 23rd March, 2015, SAT hears and disposes of appeals against orders passed by the Insurance Regulatory Development Authority of India (IRDAI) under the Insurance Act, 1938, the General Insurance Business (Nationalization) Act, 1972 and the Insurance Regulatory and Development Authority Act, 1999 and the Rules and Regulations framed there under.

Procedure

The procedure involved in filing of appeal before SAT and its disposal is discussed in the following paras:

Limitation

•  Every appeal 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 Authority; or
• the Insurance Regulatory and Development Authority; or 
• the Pension Fund Regulatory and Development Authority

against which the appeal is filed, is received by the appellant.

•  The 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.

Filing of appeal

• A memorandum of appeal shall be presented in the Form by any aggrieved person in the registry of the Appellate Tribunal within whose jurisdiction his case falls or shall be sent by registered post addressed to the Registrar.
• A memorandum of appeal sent by post shall be deemed to have been presented in the registry on the day it was received in the registry.
• The proceedings of the Appellate Tribunal shall be conducted in English or Hindi.
• No appeal, application, representation, document or other matters contained in any language other than English or Hindi, shall be accepted by Appellate Tribunal, unless the same is accompanied by a true copy of translation thereof in English or Hindi.
•  Every appeal, application, reply, representation or any document filed before the Appellate Tribunal shall be typewritten, cyclostyled or printed neatly and legibly on one side of the good quality paper of foolscap size in double space and separate sheets shall be stitched together and every page shall be consecutively numbered and filed 
• The appeal shall be presented in five sets in a paper book along with an empty file size envelope bearing the full address of the respondent and in case the 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.
• The appeal shall be accompanied with copies of the order, at least one of which shall be a certified copy, against which the appeal is filed.
• Where a party is represented by an authorized representative, a copy of the authorization to act as the authorized representative and the written consent thereto by such authorized representative shall be appended to the appeal.
• A memorandum of appeal shall not seek relief or reliefs therein against more than one order unless the reliefs prayed for are consequential.
• Every memorandum of appeal filed shall set forth concisely under distinct heads, the grounds of such appeal without any argument or narrative, and such ground shall be numbered consecutively.
• 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.

Fee

• Every memorandum of appeal shall be accompanied with a fee that  may be remitted in the form of crossed demand draft drawn on any nationalized bank in favor of ‘the Registrar, Securities Appellate Tribunal’ payable at the station where the registry is located.
• The fee payable for appeal is-

• Amount of penalty imposed on is less than ₹ 10,000/- fee is ₹ 500/-
• Amount of penalty imposed on is more than ₹ 10,000/- but less than ₹ 1,00,000/-fee is ₹ 1,200/-;
• ₹ 1,00,000/- or more – fee is ₹ 1200 plus ₹ 500 for every additional one lakh of penalty or fraction thereof, subject to a maximum of ₹ 1,50,000

• Amount of fee payable in respect of any other appeal against an order of the Board under the Act shall be ₹ 5,000/- only.

Admission of appeal

•  If, on scrutiny, the appeal is found to be in order, it shall be duly registered and given a serial number.
•  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. If the appeal has been sent by post and found to be defective, the Registrar may communicate the defects to the appellant and allow the appellant such time to rectify the defect as he may deem fit.
•  If the appellant fails to rectify the defect within the time allowed the Registrar may by order and for reasons to be recorded in writing, decline to register such memorandum of appeal and communicate the order to the appellant within seven days thereof.
•  An appeal against the order of the Registrar shall be made within 15 days of receiving of such order to the Presiding Officer or in his temporary absence, to the Member authorized, whose decision thereon shall be final.

Reply

• A copy of the memorandum of appeal and paper book shall be served by the Registrar on the respondent as soon as they are registered in the registry, by hand delivery, or by Registered Post or Speed Post.
• The respondent may file five complete sets containing the reply to the appeal along with documents in a paper book form with the registry within one month of the service of the notice on him of the filing of the memorandum of appeal.
• Every reply, application or written representation filed before the Appellate Tribunal shall be verified in the manner provided for, in the Form.
• The Appellate Tribunal may, in its discretion, on application by the respondent allow the filing of reply after the expiry of the period referred to therein.
• A copy of every application, reply, document or written material filed by the respondent before the Appellate Tribunal shall be forthwith served on the appellant, by the respondent.

Hearing

• The Appellate Tribunal shall hold its sitting either at a place where its office is situated or at such other place falling within its jurisdiction, as it may deem fit by the Appellate Tribunal.
• The Appellate Tribunal shall notify the parties of the date of hearing of the appeal in such manner as the Presiding Officer may by general or special order direct.
• On the day fixed or on any other day to which the hearing may be adjourned, the appellant shall be heard in support of the appeal. The SAT shall, then, if necessary, hear the Board or its authorized representative against the appeal, and in such case the appellant shall be entitled to reply. During the course of the hearing of appeal the written arguments could be supplemented by time-bound oral arguments.

Order

• The SAT 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.
• The appeal filed before the SAT 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.
• Every order of the Appellate Tribunal shall be signed and dated by the Presiding Officer and the two other members. The Presiding Officer will have powers to pass interim orders or injunction, subject to reasons to be recorded in writing, which it considers necessary in the interest of justice.
• Orders shall be pronounced in the sitting of the Appellate Tribunal by the Presiding Officer or in case of the temporary absence of the Presiding Officer, by the Member authorized under sub-rule (2) of rule 5.
• The SAT shall send a copy of every order made by it to the Board, or the Insurance Regulatory and Development Authority or the Pension Fund Regulatory and Development Authority, as the case may be the parties to the appeal and to the concerned Adjudicating Officer.

Publication of the order

• The orders of the Appellate Tribunal, as are deemed fit for publication in any authoritative report or the press may be released for such publication on such terms and conditions as the Presiding Officer may lay down.

Ex-parte order

•  In case the appellant does not appear in person or through an authorized representative when the appeal is called for hearing, the SAT may dispose of the appeal on the merits.
•  Where an appeal has been disposed of as provided above and the appellant appears afterwards and satisfies the SAT that there was sufficient cause for his non-appearance, when the appeal was called for hearing, the SAT shall make an order setting aside the ex parte order and restore the appeal.
• The Appellate Tribunal may make, such orders or give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice.

Reference

If a Bench of the SAT consisting of two members differ in opinion on any point, they shall state the point or points on which they differ, and make a reference to the Presiding Officer of the SAT who shall either hear the point or points himself or refer the case for hearing only on such point or points by one or more of the other members of the SAT and such point or points shall be decided according to the opinion of the majority of the members of the SAT who have heard the case, including those who first heard it.

Powers of SAT

The SAT shall not be bound by the procedure laid down by the Code of Civil Procedure, 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 SAT shall have powers to regulate their own procedure including the places at which they shall have their sittings.  It shall have, for the purposes of discharging their functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the following matters-

• summoning and enforcing the attendance of any person and examining him on oath;
• requiring the discovery and production of documents;
•  receiving evidence on affidavits;
• issuing commissions for the examination of witnesses or documents;
• reviewing its decisions;
• dismissing an application for default or deciding it ex parte ;
• setting aside any order of dismissal of any application for default or any order passed by it ex parte ;
• any other matter which may be prescribed.

Representation

The appellant may either appear in person or authorize 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 SAT.

Every authorized representative, other than a relative or regular employee of the party shall appear before the Appellate Tribunal in his professional dress if any, and if there is no such dress, a male, in a suit or buttoned-up coat over a pant or national dress that is a long buttoned-up coat on dhoti or churidar pyjama, and a female, in a coat over white or any other sober colored saree or in any other sober dress.

Civil Courts have no jurisdiction

No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which or a SAT constituted under this Act 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.

Appeal

Any person aggrieved by any decision or order of the SAT 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.   The Supreme Court may, if it is satisfied that the applicant 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.