SEBI reverses stand on SAT hearings

The Securities and Exchange Board of India (SEBI) has agreed with the capital market appellate body, the Securities Appellate Tribunal (SAT), to take up matters, for final disposal, in the `temporary' absence of its members. The Tribunal dealing with a batch of appeals by stock brokers stated in the open court that the question of the Presiding Officer disposing of matter finally has to be settled, one way or the other, once and for all, in the temporary absence of its members. The presiding officer, Justice Kumar Rajaratnam, accordingly passed an order directing SEBI to make its stand clear on the question of quorum. The two members of SAT had retired in February and March this year and the appellate body is left with only the Presiding Officer. Justice Rajaratnam, however, said in his order that the process of appointment of members had commenced and therefore prima facie there was only a temporary absence of members. He also expressed his view that the presiding officer had the necessary quorum and jurisdiction to deal with appeals in the temporary absence of members as stipulated in Regulation 16 (1) the Securities Appellate Tribunal (Procedure) Rules, 2000. In the wake of the piquant situation in which SEBI was placed, the Senior Counsel for the market regulator, Depan Merchant, rushed to the court and informed the Tribunal that SEBI had no objection to the presiding officer taking up matters in the temporary absence of its members and requested recall of the order, passed earlier in the day, asking SEBI to state its stand on quorum. Accordingly Justice Rajaratnam recalled his earlier order.