Who is a “person aggrieved” is a very important question for Indian securities laws. Every legislation in the field uses the term when providing for a vested statutory right to appeal. For example, under Section 15T of the Securities and Exchange Board of India Act (SEBI Act), any person aggrieved by any order passed by SEBI is empowered to appeal to the Securities Appellate Tribunal (SAT).
In terms of Section 15Z of the SEBI Act, from decis-ions of the SAT, any person aggrieved by a decision of the SAT is entitled to file an appeal on a question of law before the Supreme Court. Similar provisions have been built into the Securities Contracts (Regulation) Act and the Depositories Act. Therefore, who is a “person aggrieved” is an important question.
Last month, the SAT had occasion to consider the question when an association of stock brokers challenged a mass order passed by SEBI suspending registration of stock brokers. SEBI took an objection to the appeal on the ground that the appellant was not a person aggrieved. Upholding the position, the SAT has adopted the test laid down by the Supreme Court in the determination of “locus standi” in determining whether an appellant is a person aggrieved.
Holding that the brokers association did not suffer any legal wrong, and none of its rights have been affected, the SAT noted that its members were free to file appeals if they were aggrieved but the association could not be a person aggrieved.
The term “person aggrieved” is of wide significance. It is only a person aggrieved who can move the SAT. Unless a person is aggrieved, the SAT would have no jurisdiction to hear an appeal filed by him. Such a person would have other civil remedies in law but he would not be able to invoke the special regulatory jurisdiction set out in the statutes forming part of Indian securities laws.
Equally, who is a person aggrieved for challenging a decision of the SAT in the Supreme Court is also an important question. All proceedings before the SAT are in the nature of regulatory litigation and not the routine civil litigation. Therefore, when a person who is not privy to proceedings conducted before the SAT wishes to challenge an order passed by the SAT, the Supreme Court would have to consider whether such a person should be allowed to move an appeal. He would have to satisfy the Supreme Court that he is a person aggrieved.
In the past, the SAT has also not allowed parties claiming to be interested in an issue in controversy to intervene and invoke this jurisdiction, ruling that disputes in the SAT are disputes between SEBI and the affected parties. Every party interested in the decision of SEBI would not have a vested right to participate in these proceedings. Such parties may have an independent civil remedy against the person SEBI has acted against, but they would not have the power to intervene in the SAT proceedings and play a role there.
The regulatory jurisdiction entailed in Indian securities laws is a special mechanism and is not meant to be a panacea of all controversies in Indian securities. It is only a person aggrieved by an order passed by SEBI that can invoke this jurisdiction. Not everyone is capable of invoking this jurisdiction lightly, according to the SAT’s recent reiteration. SEBI would brea-the a bit easy now. The scope for people trying to fight civil disputes through the regulatory jurisdiction administ-ered under the SEBI Act just got narrowed.
(The author is a partner of JSA, Advocates & Solicitors. The views expressed herein are his own.) E-mail: somasekhar@jsalaw.com
