Sebi orders pass muster; dismissals at Tribunal rise sharply

Reflecting a record-high success rate for orders passed by Securities and Exchange Board of India (Sebi) in various cases, the number of appeals against these directions have almost doubled at the Securities Appellate Tribunal (SAT) while the count of pleas allowed by SAT halved during the last financial year.

According to the latest details available with regard to cases where Sebi orders have been challenged at SAT, the number of appeals dismissed by the Tribunal rose to 117 in the last financial year (2013-14) from 62 in previous year.

At the same time, the number of appeals allowed by SAT fell sharply to 23 during 2013-14, from 58 in 2012-13.

This is possibly the best-ever ratio for Sebi when it comes to its orders standing ground at SAT, with the number of dismissed appeals being more than five times of the number of appeals allowed by the Tribunal against the regulator.

The count of dismissed appeals has as such been rising over the years and generally it has been always higher than that of allowed pleas. However, SAT had permitted a higher number of appeals against Sebi orders (72) in 2005-06 as against the number of dismissed pleas (46).

According to Sebi's latest annual report, as many as 182 appeals were filed against Sebi orders during 2013-14. This was lower than 225 appeals filed during the previous financial year.

While 61 appeals were pending as on March 31, 2014, SAT dismissed 117 appeals during the last fiscal, remanded four appeals, allowed 23 and upheld 36 Sebi orders with some modifications. During the year, 12 appeals were withdrawn too.

In the past 10 years, the number of dismissed appeals were highest at 139 in 2006-07, followed by 134 in 2010-11 and 117 in FY14. For all other years, the count stood in double-digits with the lowest being 29 in 2004-05.

In contrast, the count of allowed appeals was lowest at 19 in 2004-05, and the second lowest being 23 in last financial year.

Against the orders of SAT, 19 appeals were filed by Sebi, whereas 22 appeals were filed against the regulator in the Supreme Court during 2013-14. Further, five appeals were disposed where the appeals were filed by Sebi and 27 appeals were disposed where the appeals were filed against Sebi.

Sebi, which is wielding its powers to curb violations in the stock market as well as clamp down on fraudulent investment schemes, benchmarks the success rate of cases to that of the view taken by the Tribunal in case of appeals.

A majority of the Sebi's rulings against various entities get challenged by the parties at SAT, which is a statutory body and has the powers to hear appeals against orders passed by the capital markets watchdog.

Asked about the success rate of its regulatory orders, Sebi Chairman U K Sinha recently told PTI, “For us, the success rate should be counted against what is the view of Appellate Tribunal against our orders. “I am happy to tell you that our success rate in Appellate Tribunal is about 75 per cent. By global standards, it is a very good success rate," he had said.