Supreme Court Allows Avadhut Sathe Trading Academy To Withdraw ₹2.25 Crore Monthly For Operational Expenses In SEBI Case

A bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe, after hearing the parties, observed:

“We are not inclined to interfere with the decision of the Securities Appellate Tribunal decision dated 22^nd January 2026. The petitioner will be entitled to withdraw Rs. 2.25 crores to meet its monthly expenditure. We make it clear that we have not varied with the directions of the tribunal and the respondents will be entitled to enforce them.”

At the outset, Justice P.S. Narasimha while referring to the SAT order, said, “What was imposed on you was Rs. 547 crores and then of which Rs. 166 crores is already in the treasury and the fixed assets were taken into account. You were asked to pay Rs. 100 crores more, which makes it to Rs. 366 crores, which is far less than Rs. 546 crores.”

Answering the court's query, Senior Advocate Shyam Divan, appearing for Avadhut Sathe Trading Academty, argued that an ex parte interim order directing deposit of Rs. 546 crore was passed without prior notice, calling it a “grossest kind of abuse which SEBI can engage”.

He submitted that Rs. 166 crore was already with the treasury and Rs. 100 crores in assets had been accounted for, yet further payment was directed. Divan said that the order simultaneously issued a show cause notice while imposing coercive directions to pay Rs. 547 crores, without granting the petitioner an opportunity to be heard, while making peremptory directions.

Justice Narasimha however interjecting, said, “We agree with you. But then before the SAT, you ventilated all that.”

Divan however stressed that the SEBI's order was issued without giving the petitioner an opportunity to be heard, as the same order simultaneously issued a show-cause notice and imposed coercive directions. He submitted that the petitioner runs educational courses on investments and trading, for which fees are charged and sought protection from the coercive recovery.

Additional Solicitor General N. Venkatrama appeared for the Securities and Exchange Board of India. 

Background

Avadhut Dinkar Sathe established Avadhut Sathe Trading Academy Pvt Ltd in 2008 as a training platform to impart financial knowledge in investment and trading. In August 2025, the Securities and Exchange Board of India conducted search and seizure operations at the academy and alleged that it had been providing unregistered investment advisory and research analyst services under the guise of training programmes, collecting about ₹601 crore from more than 3.37 lakh investors, of which about Rs 546 crore was attributed to alleged unregistered activities between 2020 and 2025.

SEBI issued an ex parte interim order and show cause notice on December 4, 2025 directing the academy to cease such activities and deposit Rs. 546.16 crore allegedly earned from unregistered services. The academy challenged the order before the Securities Appellate Tribunal.

On December 19, 2025, the tribunal granted limited ad-interim relief allowing withdrawal of Rs. 2.25 crore for that month's expenses. On January 22, 2026, the tribunal partly allowed the appeal and reduced SEBI's deposit direction to Rs. 100 crores.

When the academy later sought permission to withdraw Rs. 2.25 crore monthly, the tribunal rejected the request on February 16, 2026, holding that the interim order had merged with the final order.

The Supreme Court, however, refused to interfere with SAT's order while permitting the academy to withdraw Rs. 2.25 crore per month towards operational expenses.