Review Before Tribunal Barred After Withdrawing Supreme Court Appeal Without Liberty: SAT Mumbai

The Securities Appellate Tribunal (SAT) at Mumbai on 22 July held that it cannot entertain review applications against its order after a party invokes the Supreme Court's appellate jurisdiction by filing statutory appeals under the Securities and Exchange Board of India (SEBI) Act and later withdraws those appeals without obtaining express liberty to seek review.

A Bench comprising Presiding Officer Justice P.S. Dinesh Kumar with Technical Members Meera Swarup and Dr. Dheeraj Bhatnagar was considering review applications filed by CAT Technologies Limited and its directors against SAT's order dated 18 October 2021, which upheld penalties imposed by the Securities and Exchange Board of India's (SEBI) Adjudicating Officer for securities law violations. It observed:

“It was rightly urged by Mr. Rai that once the statutory appeals were entertained by the Apex Court and interim order was also passed, the disposal of such appeals would necessarily mean that the order of this Tribunal has merged with the order passed by the Hon'ble Supreme Court of India, save and except where leave is granted to withdraw with liberty to approach this Tribunal. This is purely a question of law and in our considered opinion, the order passed by this Tribunal has merged with the Apex Court's order dated 25.11.2024.”

The applicants had challenged SAT's 2021 order before the Supreme Court by filing statutory appeals under the SEBI Act. During the pendency of the appeals, the Supreme Court allowed withdrawal of the appeals after the applicants stated that they intended to make a representation. However, the Supreme Court clarified that it had not expressed any opinion on whether such representation could be considered.

Subsequently, the applicants approached SAT with review applications, arguing that the Tribunal's earlier order was non-speaking, that the penalties imposed were disproportionate, and that the period during which the matter remained before the Supreme Court should be excluded while calculating the limitation period.

SEBI opposed the review applications, contending that they were not maintainable as SAT's order had merged with the Supreme Court's order. It argued that the Supreme Court had not granted liberty to the applicants to seek review before SAT after permitting withdrawal of the appeals.

Rejecting the claim that its earlier order was non-speaking, SAT held that it had provided detailed reasons while dismissing the appeals. It noted that it had considered factors including the applicants' non-cooperation during the investigation, failure to provide key information, misleading corporate announcements, non-disclosure of pledge and loan agreements, and their alleged involvement in fraudulent arrangements affecting Indian investors.

Further it observed that the applicants had consciously invoked the Supreme Court's appellate jurisdiction by filing statutory appeals and had also obtained interim relief during the pendency of those proceedings.

Holding that the applicants withdrew the statutory appeals without obtaining express liberty to approach SAT for review, the Tribunal held that its order had merged with the Supreme Court's order and that it lacked jurisdiction to entertain the review applications.

Accordingly, SAT dismissed all five review applications filed by CAT Technologies Limited and its directors.

For Applicants: Senior Advocate Ramakant Reddy and Advocates Ashta Chaudhary

For Respondent: Advocates Sumit Rai, Shreema Doshi and Mohit Turakhia