Lawyers expect easier appellate-stage settlements, lower settlement premiums and simpler calculations could reduce litigation and speed up resolution.
The regulator has suggested a simpler calculation, clearer treatment of defaults and lower additional charges for refiling withdrawn applications
The Securities and Exchange Board of India’s (SEBI’s) proposed overhaul of its settlement framework could give parties a wider route to resolve enforcement cases that have already reached the Securities Appellate Tribunal (SAT) or the Supreme Court, potentially resolving the long-pending backlog of cases at the appellate and helping the regulator secure earlier resolution of long-pending disputes.
Pending appeals
The proposed overhaul comes as SEBI has 1,066 appeals pending before SAT and 539 cases before the Supreme Court, while 620 recovery matters involving recovery certificates are sub-judice before various courts and tribunals.
“Settlement should be encouraged at every stage of the enforcement lifecycle. In fact, the possibility of settlement can sometimes become stronger during an appeal because the issues have crystallised, the evidence has been tested and both sides have a much clearer assessment of litigation risk,” said Sumit Agrawal, managing partner and former SEBI officer at Regstreet Advisors.
“There is little public interest in forcing SEBI and an appellant to continue litigating simply because an arbitrary procedural window expired years earlier,” he said.
Ankit Rajgarhia, Partner, Bahuguna Law Associates said, “This is particularly relevant in cases where an earlier settlement attempt was unsuccessful, but circumstances have changed during the proceedings.”
Further, this could help SEBI secure earlier resolutions and recover dues in matters that are otherwise tied up in appeals, Rajgarhia said. SEBI’s annual report shows ₹84,962.7 crore across 310 recovery cases is tied up in court-appointed committees, parallel proceedings, court stays or liquidation.
The proposed fast-track process for cases up to ₹10 lakh and removal of the additional 20 per cent charge for multiple proceedings are also expected to speed up case resolution and reduce delays.
Alay Razvi, managing partner, Accord Juris, however, said that the pipeline will not automatically start shrinking. “Settlement will require consent, regulatory approval and consideration of investor interests. Cases involving fraud, manipulation, systemic harm, unresolved questions of law or the need for a public precedent may remain unsuitable.”
The regulator has suggested a simpler calculation, clearer treatment of defaults and lower additional charges for refiling withdrawn applications. “The main problem was that settlement amounts were often too high due to rigid multipliers, counting the same default multiple times, and adding excessive surcharges,” said Diviay Chadha, Partner, Singhania & Co.
These could also help speed up the 499 pending applications pending on SEBI settlement mechanism at the end of FY26. SEBI received 439 applications during the year, of which, it disposed of 170 and rejected 199. SEBI collected ₹109.8 crore in settlement charges and ₹11.3 crore in disgorgement during FY26.