The Securities Appellate Tribunal ("SAT"), arguably among India's best quasi-judicial appellate tribunals is the subject of debate and discussion in recent weeks. A writ petition filed in the Delhi High Court seeking directions to get the government to appoint the Presiding Officer is getting a bit of media coverage.
The SAT is a specially empowered tribunal that is an exclusive appellate body to hear any appeal from any person aggreived by any order passed by the Securities and Exchange Board of India ("SEBI"). The Presiding Officer of the SAT can only be a retired or sitting judge of the Supreme Court or a Chief Justice of a High Court. He can only be appointed in consultation with the Chief Justice of India. Appeals from decisions of the SAT, as a matter of statutory right, can only be made to the Supreme Court, and that too only on questions of law. Of course, writ petitions could still be filed asserting constitutional rights, but that is a very narrow compass and not really relevant for purposes of this column.
The last presiding officer of the SAT retired in November last year. The government has not been able to persuant any sitting or retired judge of the Supreme Court or Chief Justice of a High Court to assume office. Meanwhile, one of the two current members has been designated as the Officiating Presiding Officer. The SAT has continued to function - appeals are filed, cases are heard, orders made, appeals from SAT have been filed in the Supreme Court and been dealt with. In short, life has gone on and it has been business as usual.
A writ petition to fill a vacancy in one of India's best tribunals would bring pressure on the government to act. However, if the controversy extends to whether the interim functioning of the tribunal is at all legitimate, one has to tread carefully. Section 15R of the SEBI Act indeed provides that no act or proceeding before the SAT shall be called into question in any manner merely on ground of defect in the constitution of the SAT.
This time, the government seems to be facing a genuine problem. It is fully seized of the need to appoint the Presiding Officer and has gone around the country searching for a retired high court Chief Justice or Supreme Court judge to take up the job. No one is said to be willing to relocate to Mumbai and its sad quality of life. The SAT is not a general post-retirement haven. One would have to work hard. The stakes are high. Reviewing decisions of SEBI is not a part-time job.
The SAT is functioning well today thanks to the experience and competence of the two incumbents. However, one of them would retire in a few months. A few years ago, when the SAT had been reduced to a one-man tribunal and had come to a standstill. This author too had initiated a public interest litigation then - when the SAT was languishing with just the Presiding Officer, the chairman of Air India got changed twice, but the government did not manage to appoint a Member (with the catchment area for a candidate being much more expansive).
One of the measures being considered in government is to amend the SEBI Act to appoint any high court judge as the Presiding Officer. This should not be resorted to lightly and should be a measure of last resort. Appeals from the SAT used to be to the High Courts but that was changed to make SAT's decisions appealable only in the Supreme Court with the change in the SAT to a three-member tribunal and with the Presiding Officer having to be at least a Supreme Court judge or a Chief Justice of a High Court.
In any event, even if the rank is changed to a High Court judge, appeals from SAT should not be changed to the High Courts and should be retained as it now is. In fact, when the SAT was still a single-member tribunal before the three-member bench got appointed, appeals during the intermediate period were possible only to the Supreme Court.
Another change to be considered is the retirement age. Currently, no person may act as a member of the SAT beyond the age of 62 years - rather low for a judicial position. The Presiding Officer has to retire at the age of 68 years. If tweaking the retirement age can improve the catchment size, that should be pursued rather than changing the rank of the bench.
The terms of service too ought to be reviewed. Today, when any retired public servant gets such a job, his pension is deducted from the pay. So, if a retired government servant joins the SAT as a member, his salary entitlement of Rs. 80,000 would not be fully paid to him - the pension due to him for services already rendered all his working life would be off-set for the work being done today. This is a blatantly unfair and inequitable rule of the government - at least for important and sensitive positions such as quasi-judicial appointments, such a rule should be relaxed.
As an institution, the performance of the SAT has been remarkable. It has interpreted its scope of its authority in wide terms. Yet, it has not been bogged down by backlog. Most decisions are made within months. The SAT's decisions have had adequate reasoning to enable the Supreme Court to decide one way or the other. There has never been any adverse observation against the SAT's functioning, judicial or administrative, despite best efforts of counsel for aggreived parties -- both SEBI (it has even been imposed with costs) and actionees (when the lose badly at the SAT).
(The author is a partner of JSA, Advocates & Solicitors. The views expressed herein are his own) Email: somasekhar@jsalaw.com
