"Precious Right To First Appeal": Supreme Court Condones 1059-Day Delay In Khelo MCX Challenge To SEBI Order

The Supreme Court recently restored Khelo MCX Research Services' appeal against SEBI's order directing it to refund money collected while acting as an unregistered investment adviser, condoning a 1059-day delay in approaching the Securities Appellate Tribunal while observing that a first appeal is a “precious right.”

"In view of the above, we are inclined to condone the delay in filing the appeal. This will, however, be subject to the appellant paying cost quantified at Rs. 5,00,000/- (Rupees Five Lakhs) which shall be deposited in the “SEBI Investor Protection and Education Fund” within three weeks from today.,” the Court said.

A Bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe set aside the Securities Appellate Tribunal's September 16, 2025 order, which had refused to condone the delay and consequently dismissed the appeal.

The court noted the appellant's explanation that he faced financial difficulties during the Covid-19 pandemic, had obligations relating to his sister's marriage, had to attend to his father's medical treatment, and allegedly did not receive the SEBI order because it was sent to his old residential address.

“Apart from the possible explanation as indicated hereinabove as Securities Appellate Tribunal provides an appeal on facts, it is important that the appellant must have one appellate forum to contest the case against him on facts. First appeal is a precious right,” the Court said.

The Bench clarified that it had not examined the merits of the SEBI order and that SAT would decide the appeal independently.

“We make it clear that we have neither considered nor examined the merits of the matter, it is for the Securities Appellate Tribunal to consider and dispose of the case on its own merits,” the Court said.

The dispute arose from SEBI's November 30, 2021 order against Khelo MCX Research Services, which issued directions including the refund of money collected after finding that the entity had acted as an unregistered investment adviser.

Before the SAT, the appellant claimed he learned of the SEBI order only in June 2024 after receiving a call from the Crime Branch, Indore regarding a complaint lodged by one of his clients concerning investment advice. He then approached counsel and obtained a copy of the order from SEBI's website.

SAT rejected the explanation, noting that the appellant had participated in the original SEBI proceedings and finding inconsistencies in his claim that he had been ousted from his parental home and was unaware of the order.

“Except this self-serving statement, no other material is placed on record to show that he learnt about the impugned order from the Crime Branch. It is wholly impossible that a Crime Branch Office in Madhya Pradesh would know about SEBI's order,” SAT had observed.

Refusing to condone the delay, SAT said the appellant had approached the tribunal with “palpably incorrect and false statements” and that the explanation for the delay was “wholly unsatisfactory.”