SAT asks SEBI to file response to Subhash Chandra and Punit Goenka appeal within 48 hours

The Securities Appellate Tribunal (SAT) on Thursday sought the response of the Securities and Exchange Board of India (SEBI) to the appeal filed by Essel Group chairman, Subhash Chandra and Chief Executive Officer (CEO) of Zee Entertainment Enterprises Limited (ZEEL), Punit Goenka against an order barring them from holding directorial or key managerial posts in listed companies..A bench consisting of Justice Tarun Agarwala and presiding officer Meera Swarup asked the SEBI to file its response within 48 hours and posted the case for final hearing on June 19. "Having heard the parties for some time, we are of the opinion that passing an order at this stage will be virtually allowing the appeal. We are also of the opinion that the appeal should be heard finally. SEBI to file reply within 48 hours," the tribunal's order stated. .Chandra and Goenka have challenged an interim order passed by SEBI that barred them from holding directorial or key managerial positions (KMP) in any listed company or its subsidiaries. Their appeal, filed through Economic Law Practice, claimed that the SEBI order involved a violation of the principles of natural justice. In this regard, the appellants highlighted that no show-cause notice was issued to them before the SEBI order was passed..Senior Advocate Janak Dwarkadas, appearing for the appellants, called it a clear case of a "post-decisional hearing situation".He clarified that he was not challenging the competency of the regulatory authority to exercise power in exceptional cases.His emphasis was that the present case did not fit the circumstances requiring the exercise of such exceptional powers which had led to the passing of the SEBI order without hearing the other side. "A post-decisional hearing can be afforded but in situations which cannot wait to preserve the status quo. This case does not fit into the exceptional cases carved out by this court," Dwarkadas contended. .The tribunal noted that the appellants had been granted 21 days' time to respond to the order and asked Dwarkadas to explain why any intervention was required at this stage. This led Dwarkadas to invoke Articles 19(1)(g) (Freedom to trade) and 21 (Right to live with dignity) of the Constitution.He argued that even a minute’s interference with a person’s fundamental right to carry on business or, in this case, to hold a post, would be destructive for the individual.He alleged that the SEBI's order was based on conclusions without any investigation. "There has been no investigation. They have merely jumped to certain conclusions which are unwarranted," Dwarkadas said. He added that this order would have repercussions on a case pending before the National Company Law Tribunal (NCLT) concerning a merger between ZEE and Sony..The tribunal proceeded to ask Senior Advocate Darius Khambata, who appeared for the SEBI, how much time it would take to complete the investigation, which has been going on for the last 4 years. Khambata, in turn, sought time to take instructions on this aspect. The Court then adjourned the matter for final hearing on June 19.