What Is The Case
● Axis Bank Limited v. National Stock Exchange of India Ltd
● Even if a technical member is not present on the Bench, the Securities Appellate Tribunal (SAT) has ruled that it has the authority to hear and resolve appeals.
● As a result, if the coram is otherwise complete, the functioning of SAT would not be affected by the absence of a technical member.
● Even if a vacancy of a member occurs, whether it is a judicial or technical member, the SAT will proceed and hear the matters if the coram is full, according to a bench consisting of Presiding Officer Justice Tarun Agarwala and judicial member Justice MT Joshi.
● Various parties were represented by senior advocates Rafique Dada, Fredun De Vitre, Pesi Mody, and Gaurav Joshi, as well as advocates Somasekhar Sundaresan and Suraj Chaudhary.
Details
● "We are of the firm belief that the Tribunal's current operation, consisting of a Presiding Officer and a Judicial Member, is not impaired by the absence of a Technical Member and that the Bench consisting of the Presiding Officer and Judicial Member will continue to hear and determine the appeals, etc. filed before the SAT," the Tribunal said.
● The SAT now has two members: the Presiding Officer and a judicial member, following the resignation of a technical member on March 31 this year.
● The Securities and Exchange Board of India questioned whether the SAT could act in the absence of technical representatives (SEBI). The markets regulator argued that the SAT Bench should have at least one technical member, as required by the proviso to Section 15L(2)(b) of the Securities and Exchange Board of India Act, 1992. It was argued that, in view of this clause, the Tribunal could not hear appeals until the Central Government appoints a technical member.
● The SAT stated in its order that the proviso to Section 15L(2)(b) was "creating a mischief" and needed to be read in accordance with other SEBI Act provisions.
Court’s Order
● In light of Section 15-PA, which states that in the event of a vacancy in the office of the Presiding Officer, the senior-most judicial member will serve as the Presiding Officer before a new Presiding Officer is named, the Bench found SEBI's argument to be wrong. As a result, even if the Presiding Officer's role becomes vacant, the tribunal will continue to work.
● In light of Section 15-PA, which states that in the event of a vacancy in the office of the Presiding Officer, the senior-most judicial member will serve as the Presiding Officer before a new Presiding Officer is named, the Bench found SEBI's argument to be wrong. As a result, even if the Presiding Officer's role becomes vacant, the tribunal will continue to work.
● "To put it another way, Section 15R would have the effect of qualifying and treating the word "must" in the proviso to Section 15L to mean "can," i.e., there shall be at least one Judicial Member and one Technical Member in every Bench, where such members are available, and where such members are not available, it would not be a mandatory requirement to be met and by law, the bench would be void."
● The SAT also stated that the SAT must be staffed entirely by judicial members. The presence of a judicial member as the Presiding Officer is required by the SEBI Act.
● "Where the Presiding Officer is operational, he and the other Member/Members shall perform the proceedings," the Bench added. "Where the Presiding Officer's office is vacant, the senior-most Judicial Member shall serve as a Presiding Officer before a new Presiding Officer is named."
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