Mumbai: A member of the Securities Appellate Tribunal (SAT) said on Friday that the appellate authority should revisit its practice of remanding appeals back to the Securities and Exchange Board of India (Sebi) because of the delays it causes in the judicial process.
In the past four years SAT has referred back at least one-fourth of the appeals for re-examination, Jog Singh said.
“This tendency of remand has, therefore, to be revisited by us and appropriate remedial measures should be taken,”said Singh in a dissent note to an order which dealt with Sebi directions in a case of alleged insider trading at Satyam Computer.
In the order dealing with the alleged insider trading by B. Ramalinga Raju and some of his associates in shares of Satyam Computer Services Ltd, the tribunal held that seven out of the eight entities involved were insiders.
The appellate authority also said it stood by its previous order of 12 May that Sebi should re-examine the disgorgement amount it had levied on these entities and pass fresh orders within four months.
While two of three membered SAT bench went by this view, Singh dissented and expressed his unease over the practise of referring matters back to Sebi.
“Indiscriminate remand to the tune of about 25% appeals disposed of by this Tribunal in the last more than four years would set a bad precedent and litigants would lose faith in the institution itself,”said Singh in the order.
He added that the practise of remanding matters back to Sebi is compelling market entities to undergo a vicious circle of retrial before Sebi gain without any fruitful result.
Cases such as self trade matters, collective investment scheme (CIS) matters, insider trading in the shares of Reliance Petroleum Industries Ltd (RPIL), stripping company assets by promoters of Zenith Infotech Ltd, disgorgement order in the matter of Satyam were referred back to Sebi for fresh orders.
Singh said that the habit of referring matters back and the consequence that delays judicial finality by years is ‘disheartening in a country like India which is struggling under a backlog of cases’.
“A court or tribunal should remand a matter in extremely rare cases where the discrepancy before that court or tribunal is such that cannot be remedied by way of deciding an appeal,” said Singh.
“The matters remanded to Sebi have witnessed significant delays and as a result often negatively impact the concerned parties. The restrictive Sebi orders on account of prolonged non disposal often result in significant financial losses to appellants and hence remand should be exercised with caution,” said Tejesh Chitlangi, partner at law firm IC Legal.