{"id":120031,"date":"2017-04-07T12:34:07","date_gmt":"2017-04-07T07:04:07","guid":{"rendered":"http:\/\/www.scconline.com\/blog\/?p=120031"},"modified":"2021-04-06T12:13:19","modified_gmt":"2021-04-06T06:43:19","slug":"sebi-circulars-cannot-be-challenged-in-sat-rules-supreme-court-of-india","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2017\/04\/07\/sebi-circulars-cannot-be-challenged-in-sat-rules-supreme-court-of-india\/","title":{"rendered":"SEBI Circulars cannot be challenged in SAT: Rules Supreme Court of India"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Supreme Court:<\/strong> The Court has ruled that administrative circulars issued by the Securities and Exchange Board of India (SEBI) cannot be challenged before the Securities and Appellate Tribunal (SAT).<\/p>\n<p style=\"text-align: justify;\">The Supreme Court\u00a0passed this judgment when it was hearing an appeal filed by SEBI against a SAT order in a case relating to National Securities Depository Ltd. (NSDL).<\/p>\n<p style=\"text-align: justify;\"><strong>Background<\/strong><\/p>\n<p style=\"text-align: justify;\">NDSL and SEBI were at odds over an administrative circular captioned \u2018review of dematerialization charges\u2019 issued in 2005, debarring the depository from levying fees\/charges on rendering service to the investors who hold Demat accounts with the depository. \u00a0The grievance of the appellant (NDSL) was that it is a company and the law permits it to make profits and distribute the dividend to its shareholders. SEBI, without any justification, interfered with its functioning, NSDL had argued.<\/p>\n<p style=\"text-align: justify;\">SAT in September 2006 had ruled that the term \u201corder\u201d in SEBI Act is extremely wide, and can be applied in all three types of orders\u2014 administrative orders, legislative orders, and quasi-judicial orders. Thus, it ruled in favour of NSDL.<\/p>\n<p style=\"text-align: justify;\"><strong>Verdict<\/strong><\/p>\n<p style=\"text-align: justify;\">SEBI challenged SAT\u2019s verdict in the Supreme Court and secured a reversal. The Supreme Court, in the order passed on March 7, said that only \u201cquasi-judicial\u201d orders and decisions are a \u201csubject of SAT\u201d.<\/p>\n<p style=\"text-align: justify;\">&#8220;Administrative orders such as circulars issued under the SEBI Act are obviously outside the appellate jurisdiction of the tribunal,\u201d said the SC order.<\/p>\n<p style=\"text-align: justify;\"><strong>Conclusion<\/strong><\/p>\n<p style=\"text-align: justify;\">The clarification and restriction to the scope of SAT will clearly bring down the number of cases before the Tribunal. One cannot approach SAT cause the same will now have jurisdiction only over orders passed by SEBI in a quasi-judicial capacity. [National Securities\u00a0Depository\u00a0Ltd. v.\u00a0SEBI, <a href=\"http:\/\/www.scconline.com\/LoginForNewsLink\/x9346H5m\">2017 SCC OnLine SC 256<\/a>, decided on 07.03.2017]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Mr. Audip Ghosh, Senior Associate Partner at ROYZZ &#038; CO. He can be contacted at audip[at]royzz[dot]com. <\/p>\n","protected":false},"author":121,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[42503,1191],"tags":[15451,2554,15101,15441,2563],"class_list":["post-120031","post","type-post","status-publish","format-standard","hentry","category-legal-analysis","category-op-ed","tag-administrative-circulars","tag-Jurisdiction","tag-royzz-co","tag-sat","tag-SEBI"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>SEBI Circulars cannot be challenged in SAT: Rules Supreme Court of India | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2017\/04\/07\/sebi-circulars-cannot-be-challenged-in-sat-rules-supreme-court-of-india\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SEBI Circulars cannot be challenged in SAT: Rules Supreme Court of India\" \/>\n<meta property=\"og:description\" content=\"By Mr. Audip Ghosh, Senior Associate Partner at ROYZZ &amp; CO. 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