How often have SAT orders gone against Sebi? Numbers tell half the story

Instances in the past, of a delay in appointments ahead of the retirement of existing members at SAT have had an impact on the number of appeals it has allowed against the market regulator

The stock market regulator recently sought to move the Supreme Court against a tribunal order.

“...we had directed the Adjudicating Officer...to file an affidavit and...(in spite)... of the direction no such affidavit has been filed. This itself amounts to contempt,” said the Securities Appellate Tribunal (SAT) order dated December 23. The tribunal was deciding on an appeal against the Securities and Exchange Board of India (Sebi).

The regulator sought time to seek an order of the apex court, which the tribunal allowed.

“...we adjourn the proceedings and give an opportunity to the appellant to produce an order of the Supreme Court within four weeks from today as desired by them. List on January 27, 2022 on which date the AO will be present before this Tribunal,” it said.

An analysis of recent years’ data shows that there has actually been a drop in the number of appeals it has allowed against the regulator. The actual number dropped from 78 in 2019-20 to 69 in 2020-21. This trend also holds true if one considers the ratio of appeals dismissed to the ones allowed. There were 2.8 appeals dismissed for every allowed appeal in 2019-20. This rose to 3.4 in 2020-21. More appeals were dismissed in previous years.

This often depends on the nature of the appeals and the kind of orders issued. The ratio was even higher in 2017-18 when around 18 appeals were dismissed for every one which went against Sebi.

The tribunal has been struggling with the lack of a full bench. Sebi had previously objected to the tribunal passing orders sans a technical member. Lawyers had suggested then that it could continue to do so. The tribunal also ruled that SAT should not be defunct because of the absence of a technical member.

The number of appeals at SAT have been going up over the years. There were 1,175 appeals filed in 2019-20 and 2020-21 shows an analysis of data from Sebi annual reports. The tribunal has dealt with 922 despite the intervening period including difficulties associated with the Covid-19 pandemic.

This is not the first time that SAT had to contend with a delay in appointments ahead of the retirement of existing members. Similar instances have been reported in 2018 and 2015. Appeals had also been affected according to news reports of the time.

The number of appeals pending against Sebi was 223 at the end of 2017-18. This has risen to 632 as of 2020-21.