Composition of The Securities Appellate Tribunal through the years

The article provides a comprehensive account of the composition of the Securities Appellate Tribunal through the years.
SAT mumbai
SAT mumbai

The Securities Appellate Tribunal (SAT/Tribunal) is a statutory and autonomous body established under Section 15K of the Securities and Exchange Board of India Act, 1992 (SEBI Act), with the process and procedure of the tribunal being administered per the SAT (Procedure) Rules, 2000 (Rules). It adjudicates upon appeals against orders passed by the Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDA) and Pension Fund Regulatory and Development Authority (PFRDA) . Following the retirement of the current Presiding Officer at the end of 2023, the SAT bench is currently composed solely of one Technical Member.

Legislative Background

The history of SAT’s composition has been an interesting one. As per 15L of the SEBI Act, 1992, the SAT was first envisioned with one person appointed by the Central Government, designated as a presiding officer. The provision read as “A Securities Appellate Tribunal shall consist of one person only (hereinafter referred to as the Presiding Officer of the Securities Appellate Tribunal) to be appointed, by notification, by the Central Government.”

Section 15L of the SEBI Act was then amended in the year 2002, envisaging a three member bench comprising a presiding officer and two other members as may be notified by the Central Government. However, this amendment only mentioned ‘members’, without specifying distinctions such as technical and judicial members.

The concept of a technical member and a judicial member was introduced through an amendment in April 2017 vide the Finance Act no. 7 of 2017 and the section as it stands today, has the following features:-

- A bench may be constituted by the Presiding Officer with two or more Judicial or Technical members as he may deem fit. Every bench constituted shall include at least one Judicial Member and one Technical Member.

- The benches of the Securities Appellate Tribunal shall ordinarily sit at Mumbai and such other places as may be notified by the Central Government in consultation with the Presiding Officer.

This was followed by a notification dated May 16, 2019, by the Ministry of Finance, notifying the strength of the Tribunal to be one presiding officer, one judicial member, and two technical members. It also recognised the ability of the presiding officer to constitute benches.


The Chapter VIB specifically deals with the establishment, jurisdiction, authority, and procedure of SAT, wherein Section 15P of the SEBI Act prescribes “filling up of vacancies” and states that, “If, for reason other than temporary absence, any vacancy occurs in the office of the Presiding Officer or any other Member of a Securities Appellate Tribunal, then the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Securities Appellate Tribunal from the stage at which the vacancy is filled.”

Section 15PA of the SEBI Act goes on to state that, “in the event of the occurrence of any vacancy in the office of the Presiding Officer of the Securities Appellate Tribunal by reason of his death, resignation or otherwise, the senior-most Judicial Member of the Securities Appellate Tribunal shall act as the Presiding Officer until the date on which a new Presiding Officer is appointed in accordance with the provisions of this Act.”

Furthermore, Rule 5(2) of the Rules states that “In the temporary absence of the Presiding Officer, Government may authorize one of the two members to preside over the sitting of the Tribunal either at a place where its office is situated or such other place falling within its jurisdiction as it may deem fit by the Appellate Tribunal.”

2012 onwards

Given that the coram of the SAT in 2012 provided only for appointment of a presiding officer and two members, there have been situations where the composition of SAT was challenged in the absence of a presiding officer.

In the matter of Manmeet Kaur vs Union of India, a writ petition was filed in public interest, where it was contended by the petitioner that the functioning of  SAT without the presiding officer and an order passed on December 05, 2011 was untenable. It was also contended by the petitioner that cases before the SAT involve intricate questions of law which cannot be adjudicated without a person having wide adjudicatory experience and that such absence of the presiding officer cannot be treated as temporary.

While the Delhi High Court did ask the Attorney Solicitor General to inform the Court on the steps taken for selection of presiding officer and to expedite the said process, the Court abstained from commenting on the validity of the orders passed and directed the Government to ensure that an amendment to the SEBI Act is made and the presiding officer is appointed after hearing the submissions made by the Attorney Solicitor General.

Even in the matter of Sandeep Jain vs Union of India, a petition was filed before the Bombay High Court where the petitioner prayed for the appointment of the presiding officer as well as direction to prohibit the members of SAT from functioning as officiating presiding officer of the SAT. After examining the issues, the Bombay High Court observed that authorisation given was in accordance with Rule 5(2) of the Rules and, therefore, did not see any impediment to the appeal which was filed by the petitioner on being heard by the members of the SAT.

A presiding officer was subsequently appointed in mid-2013.

2018 onwards

By this point in time, the 2017 amendment brought out a distinction in the composition of SAT by providing for appointment of one judicial member and one technical member. In 2018, following the retirement of the then presiding officer, SAT was only presided over by a technical member. An order dated August 13, 2018, was passed by the technical member in an appeal filed by Vishvapradhan Commercial Private Limited granting interim relief. Quantum Securities filed a Civil Appeal before the Hon’ble Supreme Court of India challenging this order dated August 13, 2018, passed by SAT. The Hon’ble Supreme Court vide its order dated September 20, 2018, observed that,

“Unfortunately, a single Technical Member seems to be manning the Securities Appellate Tribunal, Mumbai. Section 15L of the Securities and Exchange Board of India Act, 1992 specifically states, in the proviso to sub-Section 2(b), that every Bench constituted shall include at least one Judicial Member and one Technical Member.”

The Hon’ble Supreme Court did not have the opportunity to comment on the validity of the order dated August 13, 2018, as by the time, the matter was taken up for final hearing, the presiding officer was appointed and the appeal was disposed of by the Hon’ble Supreme Court directing the parties to take up the points of facts and law before the SAT.

During this period, the Technical Member also passed orders in matters of urgency as well as heard and disposed of fresh admission matters without any objections being raise by parties. Some of the orders mentioned by the Technical Member include an order dated October 17, 2018 passed in the matter of Price Waterhouse & Company Bangalore LLP etc. It may also be noted that several appeals challenging the delisting orders passed by the Bombay Stock Exchange were also filed which were heard and disposed of by the Technical Member.

More recently, in the year 2021, following the retirement of the technical member, the  SAT examined the issue of functioning without a technical member, in the matter of Axis Bank Ltd. v. National Stock Exchange of India Limited and Ors. The issue for consideration was whether the presence of a technical member on the bench was mandatory, in light of the proviso to Section 15L(2), which stated that each bench shall consist of atleast one judicial and one technical member. In a detailed order, defy tracing the jurisprudence  until date, the SAT held that where a vacancy of a member occurred, whether it is a judicial member or a technical member, SAT was empowered to hear the matters as long as there was coram.

Recently, following the retirement of the current Presiding Officer in SAT at the end of 2023, a petition was filed by Vivek Kumar Singh against the Union of India and ors.  under Article 32 of the Constitution of India before the Hon’ble Supreme Court where the Supreme Court by its order dated January 02, 2024 dismissed the petition by merely recording that the Union Government has taken steps towards appointment of the presiding officer and as a result, the petition cannot be entertained under Article 32 of the Constitution of India and accordingly disposed of the appeal.

Evolution of precedents at other Tribunals

In Mylan Laboratories Limited v. Union of India and Ors, a petition was filed before the Hon’ble Delhi High Court challenging an order passed by the Deputy Controller of Patents and Designs as the Intellectual Property Appellate Board (IPAB) was not functioning due to absence of a technical member. The IPAB also provides for a bench to be constituted comprising of one Chairman, Vice Chairman, one judicial and one technical member. Applying the principle of doctrine of necessity, the Hon’ble Delhi High Court was of the view that IPAB can proceed to hear the matters and the orders passed would not suffer invalidity on the ground of lack of coram.

In Kwality Restaurant and Ice Cream Co. v. The Commissioner of VAT, Trade and Tax Department, the appeal of the Assessee was heard by a two-member Appellate Tribunal at a time when the Appellate Tribunal comprised of three members. The hearing of the appeal was more or less concluded and it was at the stage of final arguments when the third member of the Appellate Tribunal joined the proceedings. An objection was raised by the Assessee therein for the expansion of the coram of the Appellate Tribunal to include the Member (Technical) who had till then been away on account of leave or absence and had not participated in the hearing. With the Appellate Tribunal negativing the objection, the Assessee filed a writ petition in the Hon’ble Delhi High Court questioning the correctness of the said order of the Appellate Tribunal. This Court took note of the fact that under Regulation 35(3) of the Appellate Tribunal Regulations, there can be a situation where the full Coram of the Appellate Tribunal is not available since one or more members could withdraw on the ground of conflict of interest vis-a-vis the subject matter of the proceedings before the Appellate Tribunal. An excerpt of the Judgement by the Hon’ble Delhi High Court has been highlighted below-

“8. The Petitioner’s grievance is simple enough; it contends that once the Tribunal - which at the relevant time consisted of two functioning members, the third having gone on leave-heard its appeals, substantially and the arguments of the revenue were scheduled, it was not open, midstream, as it were, for a change in composition of that body. Its argument is of prejudice, since the third member joining the proceeding, does not have the benefit of hearing its submissions. The revenue’s argument is that the Tribunal is a composite body of three members; whatever its compulsions in hearing the appeals during the absence of one member, the moment she returned, there is no irregularity in all the three members participating in the hearing, so long as the hearing has not concluded. It also argues that there is no power with the Chairman of the Tribunal to constitute benches, or hear appeals in composition of less than the full membership of that body.”

Also, In the case of Talluri Srinivas v. Union of India, Ministry of Corporate Affairs, a petition was filed before the Hon’ble Delhi High Court challenging the order passed by the Appellate Authority. The petitioner contended that was being heard by four members on recusal of one of the appointed members and that the Chartered Accountants Act, 1949 provides that the Appellate Authority must consist of five members. The Hon’ble Delhi High Court, following Kwality Restaurant (supra) held as follows -

“19 ... The CA Act does prescribe that the Appellate Authority will be a body constitute of five persons, but does not prescribe and does not fix a minimum quorum. The statute is silent on the procedure to be followed and adopted when one or more members cannot participate. In absence of a provision and stipulation to the contrary, quorum in such cases is in order and complete when majority of the members are present and participate. Therefore, if one of the members of the Appellate Authority for valid and good reason has recused and does not want to participate, hearing in the appeal can proceed and would not suffer invalidity on the ground of lack of quorum.

20. In the present case no vacancy has arisen which can be filled up as the said fifth member has neither resigned nor has been removed. There is no provision in the enactment to fill up "vacancy" by recusal in a particular case by any other mode. Temporary absence or recusal of a member in a particular appeal, would not make the Appellate Tribunal dysfunctional till a new member is appointed, which as recorded above as per the CA Act is impermissible ....

33. The rationale behind the Rule is that the litigation cannot be a non sequitur. In other words, there cannot be a litigation system in which it is impossible to litigate a given case. It is on the aforesaid principle that we have examined the statutory provisions of the CA Act and the effect of recusal of one member of the five-members of the Appellate Authority and held that recusal will not stall hearing and decision of the Appeal. Contention of lack of quorum on account of recusal of one member of the five member Appellate Authority for the aforesaid reasons fails and is rejected.”

Further, in the case of Bharat Bijlee Limited v. Commissioner of Trade and Taxes, the Hon’ble Delhi High Court adjudicated on the question of whether a single member of the Appellate Tribunal, Value Added Tax (AT) can legitimately function as the AT in terms of the provisions of the Delhi Value Added Tax Act, 2004 (DVAT Act). The Hon’ble Delhi High Court, following Kwality Restaurant (supra), directed the hearing to be conducted by two members instead of three members of Appellate Tribunal under DVAT Act and held as follows-

“22. As far as the present case is concerned, the Court finds that it is only on account of the vacancies created by the removal of the two of the three members comprising the AT, that the remaining single Member (Judicial) had to function as AT with effect from 1st August 2013. Since he was the only member, there was no question of constituting benches by issuing a notification under Section 73 (9) of the DVAT Act. Also in terms of Section 73(1) of the DVAT Act, since one or more members could function as an AT, there was no illegality attached to the single Member functioning as an AT. This is also in consonance with the legislative intent behind Section 73 (4) of the DVAT Act which contemplates continuity of the proceedings before the AT notwithstanding the vacancies created in its membership.

29. The Court is of the view that on a collective reading of Section 73(1), (4) and (9) of the Act together with the AT Regulations, the position that emerges is that as long as there is only one remaining member of the AT by virtue of the others being either removed or the vacancies not being filled up, such member can, subject to being otherwise qualified, validly function as an AT.

32. The result of the above discussion is that the Court negatives the plea of the Assessees and holds that the single Member (Judicial) could validly function as the AT between 1 st August 2013 and 20th July 2014. Further, even assuming that during the aforementioned period he lacked jurisdiction, the de facto doctrine would apply and the decisions taken by him during the said period shall not be invalidated.”

Like in 2012 and 2018, it remains to be seen if 2024 also raises new questions of law on the Tribunal’s remit. That said, the doctrine of necessity and timely resolution of grievances must play an important role in the approach taken by all stakeholders.

Shruti Rajan is a Partner and Vivek Shah is an Associate at Trilegal.

Shivansh Soni assisted on the article.

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