Securities Appellate Tribunal
Also written SAT · Securities Appellate Tribunal (SAT)
The statutory tribunal established under the SEBI Act that hears appeals from orders of SEBI and of its adjudicating officers, which must be filed within 45 days of receipt of the order.
In plain language
SEBI investigates, SEBI adjudicates and SEBI passes the order. Left there, the regulator would be prosecutor and judge in the same matter. The Securities Appellate Tribunal is the answer to that objection: a separate forum, established under the SEBI Act, that hears the appeal of any person aggrieved by a SEBI order.
Section 15K(1) of the SEBI Act, 1992 empowers the Central Government to establish SAT to exercise the jurisdiction, powers and authority conferred by the Act or by any other law in force.
How it works
Who sits on it. A presiding officer and two other members, appointed by the Central Government. The qualification for appointment is that the person should be a sitting or retired judge of the Supreme Court, or a retired Chief Justice of a High Court — the bench is judicial, not regulatory.
What may be appealed. Two things:
- an order of SEBI made on or after the commencement of the Securities Laws (Second Amendment) Act, 1999, under the SEBI Act, 1992 or the rules and regulations under it; or
- an order made by an adjudicating officer under the Act.
The gate. An appeal lies only if the aggrieved person had not granted his consent to the order being appealed. Settle with SEBI by consent and the appellate door closes on that order.
The clock. The appeal must be filed within a period of 45 days from the date on which a copy of the order is received — received, not passed, and not posted.
How it runs. Under Section 15U(1), SAT is not bound by the procedure laid down by the Code of Civil Procedure, 1908, but is guided by the principles of natural justice, and subject to the Act and rules it has the power to regulate its own procedure. That combination is deliberate: quick and flexible on form, strict on the right to be heard.
A worked example
An adjudicating officer finds that a merchant banker allowed a SEBI observation on a draft prospectus to recur in a later issue. No separate penalty is provided for that failure, so the residual penalty provision applies — not less than Rs 1,00,000, up to Rs 1,00,00,000 — and the officer imposes Rs 35,00,000.
The order is passed on 8 August and the merchant banker receives its copy on 12 August.
Appeal window = 45 days from 12 August
19 days remaining in August + 26 days of September
Last date = 26 September
Two details decide whether the appeal is even competent:
- The clock runs from 12 August, the date of receipt, not 8 August, the date of the order. Anchoring to the wrong date costs four of the forty-five days.
- Had the merchant banker settled the proceeding by consent, no appeal would lie at all, whatever the amount. A Rs 35 lakh consent order is final in a way a Rs 35 lakh adjudication order is not — which is the real commercial question when the firm chooses between them.
If the appeal succeeds, the penalty goes; if it is filed on 27 September, the Rs 35 lakh stands because of one day.
Why NISM asks about it
Chapter 2 (Introduction to the Merchant Banking), in the section on the regulatory framework, carries SAT under "Role of Appellate Authority". The examinable facts are short and countable: 45 days, from the date of receipt of a copy of the order, a bench of three (presiding officer plus two members), drawn from the Supreme Court or a retired High Court Chief Justice, not bound by the CPC 1908 but guided by natural justice, and no appeal where consent was given.
A very common question form is the numerical one — "an appeal to SAT must be filed within ____ days" — and the distractors are 30, 60 and 90.
Common exam traps
- 45 days, from receipt. Not 30, not 60, and not from the date the order was passed.
- A consent order cannot be appealed. The bar is on the person who granted consent to the order, not on the subject matter.
- SAT hears appeals from SEBI and from adjudicating officers — it is not a first forum. An investor grievance goes to SCORES, not to SAT.
- Not bound by the CPC does not mean not bound by fairness. Section 15U(1) replaces civil procedure with the principles of natural justice, and SAT regulates its own procedure within that.
- Three members, judicially qualified. The presiding officer is a sitting or retired Supreme Court judge or a retired Chief Justice of a High Court — not a SEBI official.
- The residual penalty band of Rs 1 lakh to Rs 1 crore applies only where the Act, rules or regulations provide no separate penalty for the failure. Where a specific penalty exists, that one governs.
Check yourself
1.Within what period must an appeal be filed with the Securities Appellate Tribunal against an order of SEBI?
- a)45 days from the date the copy of the order is received
- b)30 days from the date of the order
- c)60 days from the date the copy is received
- d)90 days from the date of the order
Show the answer
Answer: (a) 45 days from the date the copy of the order is received
The appeal must be filed within a period of 45 days from the date on which a copy of the order is received.
And there is a precondition: the appeal lies provided the aggrieved person had not granted his consent to the order against which the appeal is being made.
What may be appealed: an order of SEBI made on or after the commencement of the Securities Laws (Second Amendment) Act, 1999, under the SEBI Act 1992, or related rules and regulations OR an order made by an adjudicating officer under the Act.
Option C names the next stage. Section 15Z of the SEBI Act, 1992 states that any person aggrieved by any decision or order of the SAT may file an appeal to the Supreme Court within 60 days from the date of communication of the decision or order of the SAT to him, on any question of law arising out of the order.
45 days to SAT; 60 days to the Supreme Court, and only on a question of law.
SAT's composition: a SAT shall consist of a presiding officer and two other members, to be appointed by the Central Government. The qualification for appointment is that the person should be a sitting or retired judge of the Supreme Court or a retired Chief Justice of a High Court.
Its procedure is flexible but its powers are judicial. The SAT shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice — yet every proceeding before the SAT shall be deemed to be a judicial proceeding and SAT shall be deemed to be a civil court.
Who may appear: the appellant may either appear in person or authorize one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any of its officers.
And civil courts are excluded: no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which SAT... is empowered to decide upon.
2.Which of the following correctly describes the composition of the Securities Appellate Tribunal and the qualification for appointment, as per the workbook?
- a)Three members appointed by SEBI, each of whom must be a chartered accountant or company secretary
- b)A presiding officer and two other members appointed by the Central Government; the person should be a sitting or retired judge of the Supreme Court or a retired Chief Justice of a High Court
- c)A single presiding officer appointed by the Chief Justice of India from among sitting High Court judges
- d)A presiding officer and four members appointed by the Ministry of Corporate Affairs from among retired SEBI whole-time members
Show the answer
Answer: (b) A presiding officer and two other members appointed by the Central Government; the person should be a sitting or retired judge of the Supreme Court or a retired Chief Justice of a High Court
The workbook: "Section 15K (1) of the SEBI Act, 1992, empowers the Central Government to establish Securities Appellate Tribunal (SAT)... A SAT shall consist of a presiding officer and two other members, to be appointed by the Central Government. The qualification for appointment is that the person should be a sitting or retired judge of the Supreme Court or a retired Chief Justice of a High Court."
Why the other options are wrong:
- Appointed by SEBI; CAs or CSs — SEBI cannot appoint the tribunal that hears appeals against its own orders. Chartered accountants and company secretaries appear in the SAT provisions only as persons an appellant may authorise to present his case (Section 15V).
- Single presiding officer appointed by the CJI — wrong size and wrong appointing authority.
- Presiding officer and four members appointed by MCA — wrong number and wrong appointing authority; it is the Central Government under Section 15K(1).
3.Which statement about the Association of Investment Bankers of India (AIBI) is correct?
- a)It is a statutory body set up under the SEBI Act, 1992
- b)It was founded in 2003 as the Indian Merchant Bankers' Forum
- c)It registers merchant bankers on behalf of SEBI
- d)It was founded in 1993 as the Association of Merchant Bankers of India and was granted recognition by SEBI to set up professional standards
Show the answer
Answer: (d) It was founded in 1993 as the Association of Merchant Bankers of India and was granted recognition by SEBI to set up professional standards
The workbook: "The industry body for merchant bankers in India that acts as a self-regulatory organisation is known as the Association of Investment Bankers of India (AIBI). It was founded in 1993 as the Association of Merchant Bankers of India. It was granted recognition by SEBI to set up professional standards, for providing efficient services and to establish standard practices in merchant banking and financial services."
Its primary objective: "to ensure that its members render services to all constituents within an agreed framework of ethical principles and practices." It is also "the industry's sole representative to all statutory authorities, and in particular, to SEBI."
Why the other options are wrong:
- Statutory body under the SEBI Act — AIBI is an industry body recognised by SEBI, not a statutory body created by the Act.
- Founded in 2003 under another name — wrong year and wrong name; it was 1993, as the Association of Merchant Bankers of India.
- Registers merchant bankers — registration is granted by SEBI under the SEBI (Merchant Bankers) Regulations, 1992; AIBI sets standards and represents the industry.
Where this is taught
- Series IX · Chapter 2: Introduction to the Merchant Bankingintroduced here
- Series III-A · Chapter 2: Regulatory Framework - General Viewintroduced here
- Series VI · Chapter 1: Introduction to the Indian Capital Marketintroduced here
- Series VII · Chapter 2: Market Participants in the Securities Marketintroduced here
- Series X-A · Chapter 20: Grievance Redress Mechanismintroduced here
Related terms
- InsiderAnyone who is a connected person, or who simply possesses or has access to unpublished price sensitive information — possession alone is enough, with no relationship to the company required.
- SCORESSEBI's centralised web-based system for processing investor complaints, on which the company or intermediary must upload an Action Taken Report and the investor can watch the status online.
- Compliance OfficerThe separately appointed officer of a merchant banker, listed company or intermediary who monitors compliance with securities law, handles investor grievances, and reports non-compliance to SEBI independently.
- Merchant bankerA SEBI-registered body corporate engaged in the business of issue management — arranging the selling, buying or subscribing of securities, or acting as manager, consultant or adviser in relation to an issue.
- FSDCThe Financial Stability and Development Council, set up in 2010 to replace the informal High Level Coordination Committee on Financial Markets, coordinating regulation among SEBI, RBI, DEA and MCA.
- InformantAn individual who voluntarily files a Voluntary Information Disclosure Form with SEBI about an alleged insider trading violation — protected from retaliation, and an informant whether or not any reward follows.
- Capital marketThe market in which companies and governments raise long-term funds — for periods longer than a year — through shares and bonds, together with the secondary market where those securities later trade.
- Ministry of Corporate AffairsThe Government of India ministry that administers the Companies Act and the Competition Act, supervises ICAI, ICSI and the Institute of Cost Accountants, and has the ROCs and the SFIO under it.
- National Company Law TribunalThe quasi-judicial authority constituted under section 408 of the Companies Act, 2013 from 1 June 2016 to decide civil corporate disputes under the Companies Act and the Insolvency and Bankruptcy Code.
- Dual reporting lineThe compliance officer's two reporting duties — to the board of the entity that appointed him, and, for any non-compliance of the SEBI Act or regulations, immediately and independently to SEBI.
- Designated authorityA SEBI officer not below the rank of Division Chief (or a bench of three) appointed under the Intermediaries Regulations to enquire into an intermediary's default and recommend action.
- Attachment of propertyA legal order preventing a person from dealing with property or bank accounts — up to 90 days by SEBI under Section 11(4) of the SEBI Act, up to 180 days under Section 5 of the PMLA, and a recovery mode under the SCRA.
- Minimum public shareholdingThe minimum share of a listed company that must be held by the public — 25% under Rule 19A of the SCRR, a continuous listing requirement rather than a condition met only at listing.
- Composition of offencesClosing a criminal case under the Depositories Act by agreement instead of a trial — available for any offence except one punishable with imprisonment only, or with imprisonment and also fine.