The Supreme Court (SC) will decide on 5th October whether the single technical member of Securities Appellate Tribunal (SAT) can pass an interim stay on an important order issued by market regulator Securities and Exchange Board of India (SEBI).
According to media reports, after JP Devdhar demitted office of SAT as its presiding member on 11 July 2018, there is only one member left at the tribunal.
The posts of presiding officer and judicial member have been lying vacant since then and CKG Nair, the (lone) technical member of SAT has been passing orders on a daily basis.
In June this year, SEBI had asked Vishvapradhan Commercial, a thinly capitalised company of the Mahendra Nahata group, to make an open offer for shares of listed broadcaster New Delhi Television Ltd (NDTV). However, on 13th August, Mr Nair, the lone member of SAT bench, stayed the order and gave interim relief to Vishvapradhan Commercial. This stay stopped SEBI from further proceeding with its order passed in June against the company, the report says.
This led Quantum Securities, a minority shareholder in NDTV, to approach the SC. In its petition before the apex court, Quantum Securities contended that on a plain reading of Section 15L of the SEBI Act, 1992, it is crystal clear that SAT shall consist of a presiding officer, a judicial member, and a technical member. "However, in case the presiding officer constitutes benches as prescribed under Sub-section (2) of Section 15L of the act, such benches shall always compose of at least one judicial member but shall always be presided over by judicial member. Thus, it is apparent that SAT shall never be composed of only one technical member to exercise the powers and discharge the functions conferred on it," the petition added.
According to the report, during a hearing last week, a Bench of Justices Rohinton Nariman and Indu Malhotra expressed surprise that when there was a clear provision in the SEBI Act that the tribunal cannot function without a judicial member, how could a bench manned by only a technical member pass the order.
Quantum Securities is represented by senior advocate Shyam Divan, while Abhishek Manu Singhvi is counsel for Vishvapradhan Commercials. Posting the matter for 5th October, the Bench issued notices to the attorney general.