SAT hears appeals against orders from Sebi, Insurance Regulatory Development Authority of India, Pension Fund Regulatory and Development Authority as well as stock exchanges and depositories.
The Ministry of Finance (MoF) has appointed justice Mayank Kumar Jain, a former Allahabad High Court judge, as a judicial member of the Securities Appellate Tribunal (SAT). This move comes amid a rise in cases pending with the tribunal, with sources hinting at the formation of a second bench soon.
Currently, the SAT operates with three members, which limits it to a single bench. Sebi’s rules permit formation of multiple benches, each requiring at least one judicial and one technical member. A case has been made for adding another bench for years due to rising number of cases.
“The absence of additional SAT benches has led to a substantial backlog of cases, as the shortage of members makes it difficult to constitute the required benches,” said Sumit Agrawal, partner at Regstreet Law Advisors.
SAT hears appeals against orders from Sebi, Insurance Regulatory Development Authority of India, Pension Fund Regulatory and Development Authority as well as stock exchanges and depositories.
“It seems likely that there will be a new notification for another SAT bench soon, which should resolve the issue of heaps of pending cases with the tribunal,” a source said.
The proposal for a second bench was first announced by former finance minister Arun Jaitley in 2016, but little progress has been made since.
“The persistent delays in establishing additional benches have not only hindered case resolution, but also undermined the efficiency of India’s financial markets,” Agarwal said. Despite pushes from the chief justice of India and finance ministers, the wait for additional benches has stretched over eight years, he said.
Shefali Shankar, senior associate at Joby Mathew & Associates, said: “Right now, one bench is just not sufficient. There is an absolute need for two benches in SAT as lots of cases are pending, with the pace of case disposals also being slow.”
Concerns remain that justice Jain may simply become a replacement for an outgoing member – the tenure of technical member Meera Swarup will end in March, said sources. If her tenure is not renewed, there may not be an additional bench.
Under the tribunal appointment rules, even reappointment of members requires clearance and a notification by the MoF.
“As one member is appointed, the tenure of another often ends, perpetuating a cycle of vacancies. The recent appointment of justice Mayank Kumar Jain as a judicial member offers a glimmer of hope for the establishment of an additional bench,” said Agrawal, a former Sebi official.