Market regulator SEBI has approached the Supreme Court (SC) against aggressive comments made by the Securities and Appellate Tribunal (SAT) on SEBI’s workings. The SAT had termed SEBI actions in a matter involving 10-year delay in sending show cause notice as ‘judicial dishonesty.’ Later, SAT held SEBI in ‘contempt of court’ as the regulatory official failed to file a sworn affidavit as ordered by SAT.

SEBI has told SC that SAT’s unwarranted adverse remarks will impede its ability to work fearlessly and independently. Usually SEBI pleades with SAT to remove adverse remarks where they are made. But this time it has moved to SC, implying that the mutual understanding on certain aspects between judges at the appellate tribunal and officials of SEBI was on a decline.

“It is respectfully submitted that the making of adverse remarks/observation especially in the absence of any pleading and or finding of any malafide or dishonesty will not only affect the independent and fearless dispensation of justice in order to protect the interest of investors but was also wholly unsustainable in law,” said SEBI in its plea to SC.


SAT has been irked by SEBI’s casual approach to its order. SAT had asked SEBI’s adjudicating officer (AO) to appear before it in person and SEBI’s failure to follow this was termed as ‘contempt of court.’

Earlier this month SAT had pulled up SEBI for what it termed as ‘judicial dishonesty’ and asked the AO to file a sworn affidavit for a 12-year delay in sending the show cause notice (SCN) to a trader for alleged insider trading and share price manipulation. SEBI failed to file the affidavit, which did not go well with the SAT presiding officer Tarun Agarwala and judicial member MT Joshi. Both the judges have asked the SEBI AO to be personally present before them.

“By our order dated December 16, 2021 we had directed the AO to file an affidavit and inspite of the direction no such affidavit has been filed. This itself amounts to contempt the proceedings of this Tribunal,” SAT said in its recent order.

SAT said a request was made by SEBI counsel for an adjournment as they sought to file an appeal before the Supreme Court against the tribunal’s order dated December 16, wherein it had stayed the effect and operations of the SEBI order.

SAT has allowed SEBI four weeks time to get an order from SC and if it fails then the AO will have to appear before the tribunal on January 27, 2022. SEBI had issued the SCN to one Yatin Pandaya 12 years after the alleged violations or manipulative trading between 2008 and 2009 in the share price of Sterling International Enterprises.

Pandya cited several SAT judgements before SEBI to argue that the regulator had delayed its actions so much that it was difficult for him to remember the incidents and circumstances of over a decade ago.