Presiding Officer/Judicial members can decide on appeal filed before SAT even if technical member is not available

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  • Last Updated on 27 September, 2021

Securities and Exchange Board of India Act Composition of Securities Appellate Tribunal

Case Details: Axis Bank Ltd. v. National Stock Exchange of India Ltd. - [2021] 130 265 (SAT - Mumbai)

Judiciary and Counsel Details

    • Justice Tarun Agarwala, Presiding Officer and M.T. Joshi, Judicial Member
    • Gaurav Joshi, Sr. Adv., Neville LashkariChaitanya D. MehtaMs. Sonali AggarwalMs. Drishti Gudhaka, Advs., Rafique Dada, Sr. Adv., Anubhav Ghosh and Ravishekhar Pandey, Advs. for the Appearing Parties.

Facts of the Case

Appellant-Axis Bank has filed an appeal with the Tribunal, in which the appellant sought to overturn the communication/order made by respondent-National Stock Exchange.

As a result, SEBI has raised the point that, under Section 15L(2), a Bench with two or more Judicial or Technical Members must be established by the Presiding Officer of the Tribunal, with at least one Judicial Member and one Technical Member.

There was no Technical Member on the Tribunal’s Bench at the time. As a result, the Bench was not precisely formed in accordance with the rules of the SEBI Act. As a result, the Tribunal was unable to consider appeals until the Central Government nominated a Technical Member.

SAT Held

The Security Appellate Tribunal, on the other hand, conducts judicial responsibilities and must be staffed by judicial members. Furthermore, the Presiding Officer must be a Judicial Member under the SEBI Act, and the Technical Member is an aid to the Bench when the Bench requires technical knowledge on a matter.

Thus, it cannot be argued that if a Technical Member is unavailable, the Bench of two Judicial Members will be unable to operate. The Tribunal’s current functioning, which consists of a Presiding Officer and a Judicial Member, is not impaired by the absence of a Technical Member, and the Bench, which consists of the Presiding Officer and Judicial Member, can proceed to hear and consider the appeals, etc., submitted before the SAT. SEBI’s objection has been dismissed.

In addition, the fourth post of Technical Member was created in this case by a notice dated May 16, 2019. Despite the fact that this position has been for two years, the Central Government has taken no action to fill it.

Furthermore, the government was aware that the lone Technical Member was set to retire on March 31, 2021. No measures have been taken to fill the position as of yet, despite the fact that such steps should have been done at least a few months prior to the Technical Member’s retirement. As a result, the Central Government is urged to fill the vacancies as soon as possible.

Case Review

    • S.S. Manoharan v. Dy. Registrar W.P. No 31409 of 2014 (para 42)
    • Subhash G. Narvekar v. State of Goa 6 Ban CR 361 (para 35)
    • Madras High Court v. Rama Kudumban 1952 (65) LW 1063 (para 41) Distinguished.

List of Cases Referred to

    • Oliver Ashworth (Holdings) Ltd. v. Ballard (Kent) Ltd. [1999] 2 All ER 791 (CA) (para 10)
    • Tanna Modi v. CIT [2007] 161 Taxman 329/292 ITR 209 (SC) (para 10)
    • Bengal Immunity Co. Ltd. v. State of Bihar AIR 1955 SC 661 (para 11)
    • South India Corpn. (P.) Ltd. v. Secretary, Board of Revenue AIR 1964 SC 207 (para 22)
    • Union of India v. Sanjay Kumar Jain [2004] 6 SCC 708 (para 29)
    • Anita Kushwaha v. Pushap Sudan [2016] 8 SCC 509 (para 32)
    • Gulzari Lal Agarwal v. Accounts Officer [1996] 10 SCC 590 (para 34)
    • Subhash G. Narvekar v. State of Goa [2005] 6 Ban CR 361 (para 35)
    • Mylan Laboratories Ltd. v. Union of India [Writ Petition No. 5571 of 2009, dated 8-7-2019] (para 36)
    • International Association for Protection of Intellectual Property (India Group) v. Union of India 2021 SCC Online SC 89 (para 37)
    • Talluri Srinivas v. Union of India [2018] 91 175/254 Taxman 261 (Delhi)
    • Gokaraju Rangaraju Etc. v. State of A.P. [1981] 3 SCC 132 (para 39)
    • Sandeep Jain v. Union of India [Writ Petition No. 5847 of 2017, dated 26-11-2012] (para 40)
    • Kama Unni v. Rama Kudumban 1952 (65) LW 1063 (para 41)
    • S. Manoharan v. Dy. Registrar, Central Administrative Tribunal [Writ Petition No. 31409 of 2014, dated 26-2-2015] (para 42)
    • Roger Mathew v. South Indian Bank Ltd. [2000] 6 SCC 1 (para 43)
    • Union of India v. R. Gandhi President, Madras Bar Association [2010] 100 SCL 142/5 28 (SC) (para 44)
    • L. Chandra Kumar v. Union of India 1997 1023 (SC) (para 48).

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