Karvy case: Appellate tribunal reserves order on Axis Bank's plea

Lender had overdraft facility of Rs 100 crore to brokerage

The Securities and Appellate Tribunal (SAT) has reserved its order on Axis Bank’s plea in the Karvy Stock Broking case. The tribunal will issue its directions on December 17. 

The lender had sought the SAT’s intervention following National Securities Depository’s (NSDL) move to freeze the shares pledged by Karvy. The brokerage had pledged shares to the lender against an overdraft facility of Rs 100 crore. 

In its November 22 interim order, the Securities and Exchange Board of India (Sebi) had restrained the transfer of securities from Karvy’s account with immediate effect, except to beneficial owners or clients who had cleared all payments pertaining to the securities. 

Axis Bank submitted that Karvy owed Rs 80 crore to the bank. 

However, as a result of the freeze, the bank was not able to invoke the pledge. The bank also added Sebi, Central Depository Services, and the NSE as parties to the case. In earlier pleas, even though the tribunal had heard arguments made by the lenders, it had decided against giving immediate relief. The SAT had directed Sebi to give the final order in the matter. 

The Bench had also rapped appellants for approaching the tribunal on December 2, even though the Sebi order was passed on November 22. It also observed that “a lot of water has flowed under the bridge” during this time.