Delays likely in SAT cases as key post falls vacant in December

Justice Tarun Agarwala, the presiding officer and judicial member of the SAT, is expected to retire in December.
Justice Tarun Agarwala, the presiding officer and judicial member of the SAT, is expected to retire in December.


  • The rules do not permit the tribunal to pass orders without the presence of a judicial member

Cases pending with the Securities Appellate Tribunal (SAT) may face delays as the presiding officer of the tribunal leaves office early next month, said two lawyers privy to the development. Justice Tarun Agarwala, the presiding officer and judicial member of the tribunal, is expected to retire in December due to which the tribunal may not have a judicial member on the bench. Rules do not permit SAT to pass orders without the presence of a judicial member. The vacancy could impact many cases that are pending before the tribunal right now including appeals filed by Reliance Industries, Bombay Dyeing and Kotak AMC.

Currently, the bench is fast-tracking the cases in final stages to ensure that the verdicts are rendered before December, said lawyers cited above.

If an entity needs emergency relief from Sebi, it will have to move high courts where the process typically takes longer than SAT since the latter is a specialized body created to hear security market appeals, legal experts say.

“This is indeed a pressing issue. The absence of a designated judicial successor not only escalates the backlog of cases but also bears consequences for foreign investment," said Sumit Agrawal, founder, Regstreet Law Advisors.

“SAT holds jurisdiction over cases involving entities such as Sebi, stock exchanges, depositories, IRDAI, and PFRDA on a nationwide scale. Therefore, ensuring a swift and clear resolution in this matter is of paramount importance, serving the best interests of investors, policyholders, and pension funds," Agrawal added.

Agarwala’s retirement would mean the bench strength of the tribunal will come down to one judge: Meera Swarup, technical member. The normal bench strength of SAT is three members; however, a vacancy was created when Justice M.T. Joshi vacated his office in February this year. This position is also vacant as of now.

Also, in many cases, the tribunal has already heard arguments and reserved orders.

Such cases may face further delays since they may have to be taken up by a new bench. As a principle of fairness, in cases where arguments have been fully heard but judgment reserved, the new bench hears the arguments again.

“Given the number of cases which are reserved for order and the limited tenure of the honourable presiding officer, it is practically impossible for the bench to pass orders in all the pending matters. Appeals filed by banks and NBFCs, creditors of Karvy Stock Broking Ltd, were reserved for orders in September 2022 and the orders are yet to be passed," said Ravishekhar Pandey, practice head, Securities and Capital Market at MDP & Partners.

“Similarly, Appeals filed by Jio Financial Services and Urban Infrastructure Trust Ltd are cases which are reserved for orders recently. It would be very interesting to see how the bench is going to deal with this herculean task," Pandey said.

The lack of bench strength has remained a key challenge for SAT as the country’s fast-growing stock market has led to a surge in cases coming to the tribunal.

In the Budget for FY17, the central government had proposed the creation of additional benches of SAT to ensure faster resolution of the cases. The tribunal currently has a single bench that is based in Mumbai. However, the proposal is yet to be implemented.

The caseload on SAT has increased significantly over the last two years as market regulator the Securities and Exchange Board of India (Sebi) has stepped up the heat against violators of market rules.

In FY23, a total of 1,192 appeals were filed against Sebi in the SAT, up from 780 in FY22 and 545 in FY21, Sebi annual reports showed. The number of cases pending before SAT has seen an uptick too with 758 appeals pending as of 31 March 2023 against 697 in FY22.

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