Appeal to the Securities Appellate Tribunal (Section 36)

A regulator with power to register, direct, penalise and supersede must itself be subject to independent review. Instead of creating a new tribunal, the PFRDA Act sends appeals against the orders of PFRDA and its adjudicating officers to the Securities Appellate Tribunal (SAT), the specialist tribunal already established under the SEBI Act. Section 36 sets out who may appeal, within what time, and what the Tribunal may do.

1. The Securities Appellate Tribunal

• Establishment: under Section 15K of the SEBI Act, 1992; defined in Section 2(1)(s) of the PFRDA Act by reference to that provision.
• Jurisdiction: hears appeals against orders of SEBI, IRDAI and PFRDA, so it is the common appellate forum for the securities, insurance and pension sectors.
• Composition: a Presiding Officer and judicial and technical members, appointed under the SEBI Act.
• Seat: Mumbai.

2. Who May Appeal and Against What (Section 36(1))

• "Any person aggrieved": not only the person against whom the order is made, but anyone whose legal interests are adversely affected, such as a subscriber or an intermediary affected by an order against another.
• Orders of the Authority: directions (Section 15), interim measures (Section 14(4)), cease and desist orders (Section 18), refusal, suspension or cancellation of registration (Section 27), and supersession under Section 31.
• Orders of an adjudicating officer: penalty proceedings under Sections 28 and 30, including the member's order imposing the penalty.

3. Limitation (Section 36(2))

• Period: forty-five days from the date on which a copy of the order is received by the appellant.
• Condonation: the Tribunal may entertain an appeal after forty-five days if satisfied that there was sufficient cause for not filing it in time.
• Form and fees: as prescribed by rules made by the Central Government under Section 51.

4. Hearing and Decision (Section 36(3) and (4))

• Hearing: the Tribunal must give the parties an opportunity of being heard.
• Powers: it may pass such orders as it thinks fit, confirming, modifying or setting aside the order appealed against. This is a full appeal on facts and law, so the Tribunal may substitute its own view, including on the amount of a penalty.
• Communication: a copy of every order is sent to the Authority, the parties and the adjudicating officer concerned.

5. Speed and Procedure (Section 36(5) and (6))

• Expedition: the appeal must be dealt with as expeditiously as possible, and the Tribunal must endeavour to dispose of it within six months of presentation. The time limit is directory, not mandatory.
• Procedure: the Tribunal deals with appeals in accordance with the procedure prescribed by rules, without prejudice to Sections 15T and 15U of the SEBI Act, which govern appeals to and the procedure and powers of the Tribunal.
• Civil court powers: under Section 15U of the SEBI Act, the Tribunal has powers of a civil court for matters such as summoning witnesses, requiring documents and receiving evidence on affidavit, and is guided by the principles of natural justice rather than the strict rules of civil procedure.

6. Interim Relief and Stay

Filing an appeal does not by itself suspend the order appealed against. The appellant may ask the Tribunal for an interim stay. The Tribunal considers the strength of the appeal, the balance of convenience and the risk to subscribers, and may impose conditions, such as deposit of part of a penalty, when granting a stay.

7. Why the SAT?

• Expertise: the Tribunal has long experience of financial regulation and of reviewing regulators' enforcement orders.
• Economy: no new tribunal had to be created for a sector with comparatively few disputes.
• Consistency: common principles on penalties, natural justice and proportionality can develop across the securities, insurance and pension sectors.
• Concern: a heavy load of securities appeals may delay pension appeals, and the Tribunal's members may have less specialist knowledge of pensions.

8. Related Topics and Provisions

• Bar of civil court jurisdiction and appeal to the Supreme Court (Sections 37 and 38)
• Adjudication of penalties (Section 30)
• Eligibility and registration of intermediaries (Sections 26 and 27)
• Rule-making, regulation-making and delegation (Sections 49 and 51 to 54)