Opinion: The functioning of the Securities Appellate Tribunal needs urgent change!

The Securities Appellate Tribunal (SAT) is a statutory body established under the provisions of Section 15K of the Securities and Exchange Board of India Act, 1992. Its primary functions are to hear and dispose of appeals against orders passed by the Securities and Exchange Board of India (SEBI) or by an adjudicating officer under the Act; and to exercise jurisdiction, powers and authority conferred on the Tribunal by or under this Act or any other law for the time being in force.


Since 2015, the Securities Appellate Tribunal (SAT) also decides on the appeals against orders issued by the Insurance Regulatory and Development Authority of India (IRDAI) and the Pension Fund Regulatory and Development Authority (PFRDA). Every passing year we notice how the SAT is slowly being molded to represent a tribunal that is more holistic in its scope and can decide on a broader spectrum of financial matters. However this trend has made it difficult for the SAT’s single bench of 3 judges to timely adjudicate on all the matter brought before it.


Experts say that the workload before the SAT is doubling every two to three years as India continues to establish itself as a global economic powerhouse. Between 2013 and 2016 we saw a hike in the number of annual appeals against SEBI orders go from 182 to 591. The biggest area of concern was that with the rise in appeals there was simultaneously a rise in the pendency rate of the appeals. In 2013, the SAT had 86 appeals pending before it. This number shot up to 423 in 2016. In 2017, we saw an attitude of speedy disposal of cases by the SAT which brought the number of pending cases to 223 in the 2017-2018 period. Though this reduced number of pending cases gave rise to optimism initially, the very next year the number of pending cases jumped by around 70%. With 379 cases pending before the SAT in 2019, it is glaringly obvious that more concrete rules for hastening the disposal rate of appeals is required.





In 2013, the Financial Sector Legislative Reforms Commission (FSLRC) had debated on topics along these lines extensively. The committee made an innovative suggestion to establish a unified “Financial Redressal Agency” (FRA).. The task-force that was set up to decide on how to start this unified FRA, submitted its report in June 2016. It suggested first setting up a shell FRA and then progressively scaling it up into a statutory body. The transition plan stated how in the first few months, the FRA should learn to handle cases against insurance, and then in another year or so start handling capital markets related issues as well. Even Though this was touted by experts as the need of the hour, no tangible steps were taken to implement the same.


In 2019, the central government approved the creation of a “technical member” in the Securities Appellate Tribunal (SAT) to expedite disposal of the appeal cases. The official statement itemized that this decision would facilitate the creation of an additional bench of the SAT. However, yet again there was no immediate implementation due to lack of initiative.


It is high time that a more elaborate plan itemizing either the creation of new SAT benches in Mumbai itself, or a pan Indian structure of regional benches of SAT is implemented. Over the years, many lawyers and financial experts have suggested a grouping of geographical areas to create different financial zones with their own SAT.

I personally believe, that delivering on the creation of a new SAT bench in Delhi, to handle matters pertaining to northern and eastern states, as suggested by the late Arun Jaitley during his presentation of the 2016 Union Budget, is the need of the hour. Such a step can immensely unburden the load on the Mumbai SAT bench and also act as a great prototype before eventually creating more SAT benches across the country.

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