SC expunges SAT's adverse comments against Sebi in investor complaint case

Market regulator had taken on SAT, stating that a computer-generated response by Sebi can't be regarded as an order. It also said SAT had exceeded its jurisdiction in making adverse remarks against it

The Supreme Court has expunged adverse comments made by the Securities Appellate Tribunal (SAT) against market regulator Securities and Exchange Board of India (Sebi) in a recent order pertaining to handling of an investors complaint.

“We have no hesitation in stating that the Sebi as a regulator in the instant case has not performed its duties and has kept the complaint pending for more than six years which speaks volumes by itself. The tribunal fails to fathom as to why the complaint could not have been decided unless Sebi officials had a vested interest in not deciding the matter,” SAT had observed in an order dated November 14, 2019.

The market regulator had challenged the order before the SC on the ground that a computer-generated response by Sebi cannot be regarded as an order. Further, it argued that SAT had exceeded its jurisdiction in making the adverse remarks against Sebi.

After hearing the matter, the apex court agreed to expunge the adverse remarks made by SAT.  The court also allowed a period of four months for disposal of the case.

“We are of the opinion that certain observations made in the impugned order were not called for, such as “the computer-generated disposal of a serious complaint speaks volume on the conduct of the respondents” as well as the part of the order relating to “vested interest in not deciding the matter” were not at all called for,” SC said.

“May be there was some remiss on the part of Sebi to act as a regulator, but casting aspersion was not warranted in the facts and circumstances of the case. As such, the adverse observations made in Paragraph No. 20 are hereby diluted,” it further said.