SAT favours extension of retirement age

Awaits PMO clearance for members' appointment There is no saving clause in the statute to enable the members to continue till new appointments are made. Oommen A. Ninan MUMBAI The Securities Appellate Tribunal (SAT) has recommended to the Union Ministry of Finance to extend the retirement age of its members from 62 to 65 on the ground that their tenure at the Tribunal is very short, barely one year. As the three-member Tribunal is now left with only the Presiding Officer and two new members recommended by the C. Rangarajan Committee have not taken over as the necessary clearance from the Prime Minister's Office (PMO) has not yet come through. It is still not known when the new members are likely to be appointed, as the PMO has made some enquiries on the process of selection of members with the Finance Ministry, according to informed sources. The two new members recommended by the committee are R. N. Bharadwaj, Chairman, Life Insurance Corporation of India, and Chandan Bhattacharya, former Managing Director, State Bank of India, who are expected to fill the vacancies of N. L. Lakhanpal, who retired on February 15, and B. Samal, who retired on March 1, after having served the Tribunal for barely a year. This also applies to the capital market regulator, the Securities and Exchange Board of India (SEBI), as the appointments of its full-time members are made after they demit office at the age of 62. Among the present members, G. Anantharaman has just one year to retire, while Madhukar has just nine months left. These two members joined the Board as recently as December 2004. Sitting alone on the bench, the presiding officer of the SAT, Justice Kumar Rajaratnam, has disposed of several cases with the consent of the parties. When contacted, Justice Rajaratnam expressed the view that it is perfectly permissible to take up matters for final disposal in the temporary absence of the members, with the consent of the parties. However, he felt that a delay in the appointment of members would not be conducive for a speedy disposal of cases, as the capital market redressal machinery would experience a vacuum. It is pertinent to point out that there is no saving clause in the statute to enable the members to continue till new appointments are made. Such a saving clause was introduced in 2002 where the single member was allowed to continue in office till the two new members were appointed. However, this calls for an amendment to the SEBI Act. as the age limit is stipulated at 62 for the members (usually retired bureaucrats or former bankers) and 68 for the presiding officer, who is of the rank of a sitting or a retired Supreme Court Judge or a sitting or a retired Chief Justice of a High Court. In the short term, the SAT has succeeded in disposing of more than 300 cases, including many high-profile cases. However, there are around 500 cases now pending before the Tribunal. These include 35 cases involving the stock market scam-tainted Ketan Parekh, the Sterlite issue, Samir Arora and Allianz Capital, the Global Trust Bank issue, and matters concerning fraudulent and unfair trade practices, cases involving the Takeover Code and a batch appeal by brokers dealing with fee continuity.