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CS Professional · Drafting, Pleadings and Appearances

Adjudications and Appeals under SEBI Laws for CS Professional

This chapter covers how SEBI-law disputes move from an adjudicating officer's order to the Securities Appellate Tribunal (SAT) and then to the Supreme Court. To solve questions, identify the Act, the forum, the time limit and the grounds, apply them to the facts, and draft the appeal or reply in proper form.

What this chapter covers

This chapter follows one dispute through its whole life. It starts with adjudication, where an adjudicating officer decides whether a person has broken SEBI law and what penalty follows. It then moves to the Securities Appellate Tribunal, which hears appeals against such orders. Finally it reaches the Supreme Court, which hears appeals from SAT only on questions of law.

Three Acts run side by side: the SEBI Act, 1992, the Securities Contracts (Regulation) Act, 1956 and the Depositories Act, 1996. Their SAT provisions are almost identical, but section numbers and time limits differ. For example, SAT's procedure and powers sit in section 15U of the SEBI Act, section 22B of the SCRA and section 23B of the Depositories Act. The appeal to the Supreme Court is section 15Z of the SEBI Act and section 23F of the Depositories Act. An appeal to SAT under the SCRA is governed by section 23L.

This chapter belongs to the Pleadings and Appearances part of Paper 2. It connects directly to drafting: you may be asked to draft an appeal memorandum, a reply to a show cause notice or an application for condonation of delay. Your knowledge of procedure, forum and limitation is what makes the draft correct.

Paper 2 is a written, case-based paper, and this chapter suits that format well. The rules are specific: who hears the matter, within how many days, on what grounds and with what powers. Examiners can build a fact pattern around any of them and ask for provision, analysis and conclusion, or for a draft. Students who know the exact periods and the differences between the three Acts can score cleanly, while those who only know the general idea lose marks on details.

Adjudications and Appeals under SEBI Laws: topics in the order to study them

  1. 1Adjudication under SEBI Act and Depositories ActStart here, because every appeal begins with an order passed in adjudication, so you need to know what is being challenged.
  2. 2Securities Appellate Tribunal: Constitution and PowersNext, learn who the tribunal is, who can be appointed to it and what powers it has, before you study how to approach it.
  3. 3Appeals to the Securities Appellate TribunalWith the forum understood, study who may appeal, within what time, in what form and what SAT may do.
  4. 4Appeals to the Supreme CourtThis is the last rung of the ladder, and it is short, but it depends on knowing what SAT decides first.
  5. 5Appearance Before SEBI and SAT; Application of Other LawsFinish with who may represent a party and which other laws apply, which ties the chapter to drafting and practice.

How to prepare Adjudications and Appeals under SEBI Laws

This chapter rewards a comparison method. The three Acts repeat the same structure, so learn it once and then note the differences.

  1. Draw a flow chart of the dispute: show cause notice, adjudicating officer's order, appeal to SAT, appeal to the Supreme Court. Keep it as your base.
  2. Read the official text of sections 15M, 15U and 15Z of the SEBI Act, sections 22A, 22B and 23L of the SCRA, and sections 23B and 23F of the Depositories Act. Mark the periods and conditions in each.
  3. Make a comparison table in your notes for SAT's procedure and powers across the three Acts. Note that the wording is nearly the same, and learn the section numbers.
  4. Learn the qualification rules for SAT's Presiding Officer, Judicial Member and Technical Member from section 15M, with the number of years each requires.
  5. Practise three short drafts: a memorandum of appeal to SAT, a prayer for condonation of delay and a memorandum of appeal to the Supreme Court. Use a fixed order: facts, grounds, prayer.
  6. Solve two or three case questions in the format provision, analysis, conclusion. Check that every time limit you cite is correct and that you apply it to the dates in the facts.
  7. In the last week, revise only the flow chart, the comparison table and the quick revision list.

Common mistakes in Adjudications and Appeals under SEBI Laws

  • Mixing up the time limits for different appeals, for example using sixty days for an SCRA appeal to SAT.

    Fix: Tie each period to its forum and section: 22A is fifteen days, 23L is forty-five days to SAT, and 15Z or 23F is sixty days to the Supreme Court.

  • Saying an appeal lies to the Supreme Court on facts or on any ground.

    Fix: State that the appeal lies only on a question of law arising out of SAT's order, and use the facts to show what the legal question is.

  • Giving a wrong section number for the same rule in a different Act.

    Fix: Keep a three-column table of section numbers for SAT procedure and for the Supreme Court appeal. If unsure, state the rule without a number rather than guess.

  • Writing that SAT must follow the Code of Civil Procedure.

    Fix: Write both halves: SAT is not bound by the Code but is guided by natural justice, and it has the Code's powers only for the listed matters.

  • Ignoring the dates in a case question and not checking limitation.

    Fix: Count the days from the date the order was received or communicated, compare them with the limit, and then discuss condonation for sufficient cause if the appeal is late.

  • Drafting an appeal without the standard parts or with a vague prayer.

    Fix: Use a fixed format: forum and parties, brief facts, grounds in numbered paragraphs, and a specific prayer for relief, followed by the date and signature.

Last-day revision: Adjudications and Appeals under SEBI Laws

  • 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).

Adjudications and Appeals under SEBI Laws practice questions

Adjudications and Appeals under SEBI Laws in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Adjudications and Appeals under SEBI Laws: frequently asked questions

Is the SAT bound by the Code of Civil Procedure?

No. SAT is not bound by the procedure in the Code of Civil Procedure, 1908. It is guided by the principles of natural justice and can regulate its own procedure. It does have the powers of a civil court for specified matters such as summoning witnesses and receiving evidence on affidavits.

What is the time limit to appeal to the Supreme Court from a SAT order?

Sixty days from the date the SAT order is communicated to the aggrieved person, and only on a question of law arising out of the order. If the Supreme Court is satisfied that the appellant was prevented by sufficient cause from filing within that period, it may allow the appeal to be filed within a further period not exceeding sixty days.

Do I need to memorise section numbers for this chapter?

Learn the main ones: 15U, 15Z and 15M of the SEBI Act, 22A, 22B and 23L of the SCRA, and 23B and 23F of the Depositories Act. Examiners reward correct numbers, but a correct rule with no number still earns marks, so never guess a number.

How should I answer a case question on an appeal?

Name the Act and section that gives the right of appeal, state the forum and time limit, apply them to the dates and facts given, and then conclude clearly. If the case asks you to draft, follow the standard format of facts, grounds and prayer.