Securities Appellate Tribunal will get new bench in Delhi

This bench will deal with firms based out of the northern states

After a prolonged wait, a new Securities Appellate Tribunal (SAT) bench may finally be up and running this year. The idea of a new bench was proposed by finance minister Arun Jaitley during the Union Budget of 2016 to help expedite cases pertaining to the securities market. 

According to sources, the bench will be based out of Delhi and deal with matters pertaining to companies based out of the northern states like Punjab, Haryana and Delhi. Even companies from Kolkata are likely to come under its jurisdiction.  

The new bench will constitute of a judicial member and technical member, but may not include a presiding officer. Secretaries and assistants will also be recruited. 

At present, the SAT has one bench in Mumbai, with one presiding officer Justice JP Devadhar and two other members. 

Apart from the Securities and Exchange Board of India (Sebi), the SAT has begun hearing appeals against orders issued by the Insurance Regulatory and Development Authority of India (IRDAI) and the Pension Fund Regulatory and Development Authority (PFRDA), beginning 2015. As a result, the number of cases that will come to the SAT are likely to increase in the coming months. The Delhi bench will, therefore, lighten the burden on the existing bench. 

“Litigants from north India will no longer have to travel all the way to Mumbai. On an average, today, the tribunal takes about a year to dispose off cases; a new bench will hopefully help to expedite disposals,” said RS Loona, partner at Dhaval Vussonji Alliance and former executive director at Sebi. He added that a second bench should suffice for the time being and setting up of new benches could be considered at a later date either in the South or East.

SAT is a statutory body established under the provisions of Section 15K of the Sebi Act, 1992 to hear and dispose of appeals against orders passed by the Sebi.

The number of appeals filed in the SAT against Sebi orders as well as the pendency of cases has been rising every year. According to the Sebi data, 591 appeals were filed against Sebi orders in the SAT in 2015-16, up from 520 appeals in 2014-15 and 182 in 2013-14. Similarly, pendency rates have risen from 86 in 2012-13 to 423 in 2015-16.

Loona believes that the main challenge before the SAT will be to widen its expertise in dealing with cases pertaining to sectors such as insurance. J N Gupta, former executive director at Sebi, believes that it will crucial for both the benches to maintain a kind of uniformity in the judgements that they pronounce.

Orders passed by the regulator can be appealed before the SAT as per the Sebi Act, while the latter’s orders can be challenged before the Supreme Court. 

Sebi’s success rate in the SAT stood at 90 per cent for 2014-15. 

In 2016, the government had proposed to amend the Sebi Act, 1992 to set up new benches of the SAT.