Adjudications and Appeals under SEBI Laws: formula sheet

Key formulas

Who can adjudicate

Officer not below the rank of Division Chief, appointed by the Board (the word is 'may')

Same in section 15-I(1) SEBI Act, section 19H(1) Depositories Act and section 23-I(1) SCRA.

Sections covered by the power

SEBI Act: 15A, 15B, 15C, 15D, 15E, 15EA, 15EB, 15F, 15G, 15H, 15HA, 15HB; Depositories Act: 19A, 19B, 19C, 19D, 19E, 19F, 19FA, 19G; SCRA: 23A, 23B, 23C, 23D, 23E, 23F, 23G, 23H

Do not quote the whole list unless asked. The sections are named individually in each Act, so do not describe them as a continuous range.

Hearing requirement

Inquiry in the prescribed manner + reasonable opportunity of being heard to the person concerned

Without a hearing the penalty order is open to challenge.

Powers during inquiry

Summon and enforce attendance of any person acquainted with the facts; require production of documents useful or relevant to the inquiry

Section 15-I(2), section 19H(2), section 23-I(2).

Penalty factors

(a) disproportionate gain or unfair advantage, if quantifiable; (b) loss to investor or group of investors; (c) repetitive nature of default

Section 15J SEBI Act (penalties under section 15-I, 11 or 11B); section 19-I Depositories Act (section 19 or 19H); section 23J SCRA (section 12A or 23-I). Each binds the Board or SEBI as well as the adjudicating officer. The law says 'due regard', so the officer must record these.

Enhancement of penalty by the Board

Board may enhance if order is erroneous to the extent it is not in the interests of the securities market; hearing is mandatory; not after 3 months from the order or disposal of appeal, whichever is earlier

Section 15-I(3), section 19H(3), section 23-I(3). Section 15-I(3) refers to appeal under section 15T and section 23-I(3) to appeal under section 23L. Section 19H(3), as printed in the supplied text, cites 'section 23A'. Do not treat that as a verified appeal route; in the exam, say only 'disposal of the appeal'.

Punishment for non-payment under SCRA

Section 23M(2): imprisonment not less than one month, up to ten years, or fine up to ₹25 crore, or both

Applies to failure to pay a penalty or comply with a direction or order. Section 23M(1) allows imprisonment up to ten years or fine up to ₹25 crore for contravention where no punishment is provided elsewhere.

Establishment (s. 15K)

Central Government + notification → SAT; notification also specifies matters and places of jurisdiction

Establishment is by notification, not by the SEBI Board or the court.

Composition (s. 15L)

SAT = Presiding Officer + Judicial Members + Technical Members (number fixed by Central Government notification)

The number of members is not fixed in the section. The Central Government determines it.

Bench rule (s. 15L(2))

Bench = 2 or more members, with at least 1 Judicial Member and 1 Technical Member

The Presiding Officer constitutes the Bench. Benches ordinarily sit at Mumbai.

Procedure (s. 15U(1))

Not bound by CPC, 1908; guided by natural justice; regulates its own procedure

Sections 22B (SCRA) and 23B (Depositories Act) are in the same terms.

Civil court powers (s. 15U(2))

Summoning and examining on oath; discovery and production of documents; evidence on affidavits; commissions; reviewing decisions; dismissal for default or ex parte decision; setting aside such orders; other prescribed matters

Powers are those of a civil court trying a suit, limited to these matters.

Judicial proceeding (s. 15U(3))

Every SAT proceeding is a judicial proceeding; SAT is a civil court for section 195 and Chapter XXVI of the CrPC, 1973

The text refers to sections 193, 196 and 228 of the Indian Penal Code.

Business of Benches (s. 15U(4)-(6))

Presiding Officer distributes business, may transfer cases between Benches, and resolves a difference of opinion by hearing the point himself or referring it to other members; majority decides

A two-member Bench that differs must state the points and refer them to the Presiding Officer.

Who may appeal (SEBI Act, s. 15T(1))

Any person aggrieved by (a) a Board order made on or after the 1999 amendment, (b) an adjudicating officer's order, or (c) certain IRDAI or PFRDA orders → appeal to SAT

The appellant must be a person aggrieved. The Board itself is not the appellant against its own order.

Limitation (s. 15T(3); Depositories Act s. 23A(3); SCRA s. 23L(2))

Appeal within 45 days from the date the copy of the order is received

Time runs from receipt of the copy, not from the date of the order. Section 15T(3) names the Board, the adjudicating officer, IRDAI or PFRDA. Section 23A(3) of the Depositories Act, as worded, refers to the copy of the order made by the Board. On the face of that text, the starting point for an appeal against an adjudicating officer's order under that Act is not spelled out. Section 23A(1) still allows that appeal.

Condonation of delay

SAT may entertain a late appeal if satisfied there was sufficient cause

The appellant must show sufficient cause for the delay.

Form and fee

Appeal in such form and with such fee as may be prescribed

Form and fee are set by rules, not fixed in the Act.

Procedure on appeal (s. 15T(4))

Opportunity of being heard to the parties → SAT passes orders confirming, modifying or setting aside the order

Hearing both sides is mandatory.

Copy of SAT order (s. 15T(5))

SAT sends a copy of every order to the Board, the parties and the concerned adjudicating officer

IRDAI or PFRDA also receive a copy where the appeal arose from their order.

Disposal time (s. 15T(6))

Dispose of the appeal finally, as an endeavour, within six months from receipt

This is a direction to endeavour, not a strict bar.

Exchange refusal to list (SCRA s. 22A)

Company may appeal to SAT within 15 days of being furnished reasons for refusal to list

The period differs from the 45-day rule.

Delisting (SCRA s. 21A(2))

Listed company or aggrieved investor may appeal within 15 days of the delisting decision; further period up to one month if sufficient cause

Delisting needs a reasonable opportunity of being heard before the decision.

Old route (SEBI Act s. 20; Depositories Act s. 23)

Appeal to the Central Government, only against Board orders made before the 1999 amendment commenced

Mention only to contrast with SAT.

Right of appeal

SAT order → appeal to Supreme Court (SEBI Act, s. 15Z; Depositories Act, s. 23F)

Available to any person aggrieved by a decision or order of SAT.

Ground of appeal

Only a question of law arising out of the SAT order

Facts are not re-argued. Frame the grounds as legal questions.

Limitation

60 days from the date of communication of the SAT order to the appellant

Time runs from communication, not from the date of the order.

Condonation of delay

Further period ≤ 60 days, if prevented by sufficient cause

Maximum total is 60 + 60 = 120 days. The Supreme Court must be satisfied.

Contrast: SCRA appeal

SAT order under SCRA → High Court, 60 days, question of fact or law (s. 22F)

Same time limit, different court and wider scope.

Who may appear before SAT

In person OR authorised CA / CS / CMA / legal practitioner / officer of appellant

Same rule in SEBI Act s.15V, SCRA s.22C and Depositories Act s.23C.

Professional condition

CA, CS, CMA must hold a certificate of practice under s.6(1) of their own Act

Membership alone is not enough.

Legal practitioner

Advocate, vakil or attorney of any High Court, including a pleader in practice

Definition in the Explanation to each section.

SAT procedure

Not bound by CPC, 1908; guided by natural justice; regulates own procedure

SCRA s.22B(1); Depositories Act s.23B(1).

SAT civil court powers

Summon and examine on oath; discovery; affidavits; commissions; review; dismissal for default or ex parte; setting aside such orders

SCRA s.22B(2); Depositories Act s.23B(2).

Other laws not barred

SEBI Act is in addition to, and not in derogation of, any other law in force

Section 32, SEBI Act.

Settlement

Application to SEBI under s.15JB; no appeal under s.15T against the settlement order

Applies to proceedings under ss.11, 11B, 11D, 12(3) or 15-I, initiated or likely.

Quick revision

• SAT is not bound by the Code of Civil Procedure, 1908, but is guided by the principles of natural justice and may regulate its own procedure (section 15U(1) SEBI Act; 22B SCRA; 23B Depositories Act).
• SAT has civil court powers for summoning, discovery and production of documents, evidence on affidavits, commissions, reviewing its decisions, and dismissal for default or ex parte decisions.
• Every proceeding before SAT is deemed a judicial proceeding, and SAT is deemed a civil court for section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.
• Presiding Officer of SAT: is, or has been, a Judge of the Supreme Court or a Chief Justice of a High Court, or a Judge of a High Court for at least seven years. The seven-year condition applies to the High Court Judge (section 15M).
• Judicial Member: a Judge of a High Court for at least five years (section 15M).
• Technical Member: is, or has been, a Secretary or Additional Secretary (or equivalent post in the Central or a State Government), or a person of proven ability, integrity and standing with at least fifteen years of special knowledge and professional experience in the financial sector, including securities market, pension funds, commodity derivatives or insurance (section 15M).
• Where SAT benches are constituted, the Presiding Officer distributes business among them and may transfer a case from one bench to another (section 15U(4) and (5)).
• If a two-member bench differs, the point is referred to the Presiding Officer, and the majority view of all members who heard the case prevails (section 15U(6)).
• Appeal to SAT under the SCRA (section 23L): within forty-five days of receiving the order, with a power to condone delay for sufficient cause.
• SAT may confirm, modify or set aside the order, and should try to dispose of an appeal within six months of receipt (section 23L).
• Appeal against a stock exchange's refusal to list securities (section 22A SCRA): within fifteen days of the reasons being furnished.
• Appeal to the Supreme Court: within sixty days of communication of the SAT order, on a question of law arising out of the order. If satisfied that the appellant was prevented by sufficient cause, the Supreme Court may allow the appeal to be filed within a further period not exceeding sixty days (section 15Z; section 23F).

Common mistakes

• Saying the Board must appoint an adjudicating officer. Fix: The sections now say the Board 'may' appoint. Write 'may'.
• Mixing up the three sections of the penalty factors. Fix: Pair them: SEBI Act 15-I and 15J; Depositories Act 19H and 19-I; SCRA 23-I and 23J.
• Saying SEBI establishes the SAT. Fix: Remember that the Central Government establishes the SAT by notification under section 15K.
• Saying a Bench can consist of Judicial Members only. Fix: Every Bench must include at least one Judicial Member and one Technical Member.
• Citing section 20 of the SEBI Act as the present appeal route. Fix: Section 20 now covers only Board orders made before the 1999 amendment, with appeal to the Central Government. For present orders, cite section 15T.
• Counting 45 days from the date of the order. Fix: The text says 45 days from the date a copy of the order is received. Use the date of receipt.
• Saying the appeal lies on questions of fact and law to the Supreme Court. Fix: Link the Supreme Court with question of law only. Link the High Court under SCRA with fact or law.
• Counting sixty days from the date of the SAT order. Fix: Count from the date of communication of the order to the appellant, as the section states.
• Saying any company secretary can appear before SAT. Fix: Write that the CS must hold a certificate of practice under section 6(1) of the Company Secretaries Act, 1980.
• Forgetting that the appellant can appear in person or through its own officer. Fix: Begin the list with 'in person' and end it with 'any of its officers'.

Exam tips

• Write the section number and the Act together, for example 'section 15-I of the SEBI Act, 1992', so the examiner sees the provision first.
• In case questions, apply each of the three penalty factors to the facts by name and do not stop at a general statement.
• For drafting questions on a show cause notice or reply, show the order: facts, provision allegedly breached, hearing request, relief. The Act text does not prescribe a notice format, so state that the notice is issued under the prescribed procedure.
• Mention the Board's enhancement power and its three-month limit as a closing point; many students skip it.
• Link the topic to appeals. Note that the appeal route is covered in the separate appeals topic. In this topic, say only 'disposal of the appeal'. The supplied text cites section 15T for the SEBI Act and section 23L for the SCRA, so use those numbers only for those Acts.
• Quote the section numbers 15K, 15L, 15S and 15U in the right places. Do not guess other numbers.
• Write the Bench rule in full: two or more members, with at least one Judicial and one Technical Member.
• In case questions, check who acted: Central Government for establishment and notification, Presiding Officer for Benches.