SEBI Seeks Amendment To SEBI Act Making Pre-Deposit Mandatory In Order To Challenge Its Orders Before SAT
[ By Bobby Anthony ]The Securities and Exchange Board of India (SEBI) has sought an amendment to the SEBI Act to provide for a mandatory “pre-deposit” of 10% of the penalty amount by any entity which seeks to challenge its orders before the Securities Appellate Tribunal (SAT).According to officials, the Finance Ministry has also agreed with the proposal, which has been approved by...
The Securities and Exchange Board of India (SEBI) has sought an amendment to the SEBI Act to provide for a mandatory “pre-deposit” of 10% of the penalty amount by any entity which seeks to challenge its orders before the Securities Appellate Tribunal (SAT).
According to officials, the Finance Ministry has also agreed with the proposal, which has been approved by the SEBI’s board.
SEBI’s move is aimed at checking frivolous appeals against its orders which are often filed, purely to delay execution of its orders relating to refund, recovery, disgorgement or compounding.
It has been pointed out that similar provisions exist in other legislations like the Central Excise Act, the Income Tax Act, the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act.
However, in specific cases, where the SAT is of the opinion that a pre-deposit would cause hardship to the appellant, the tribunal can dispense with or reduce such a deposit, subject to necessary conditions which can be imposed to safeguard investors’ interests.
As as many as 340 appeals were filed against SEBI orders before the SAT during 2017-18, according to SEBI data.
A total of 306 appeals were dismissed in favour of SEBI, while 17 cases were allowed or ruled against the the capital market regulator, while 223 appeals were pending with the SAT, as on March 31, 2018.
During 2017-18, the SEBI filed 13 appeals before the Supreme Court, while 42 appeals were filed by other parties before the apex court, according to SEBI data.