Project Topic:-

The Securities & Exchange Board Of India... vs Sterlite Industries (India) Ltd
Submitted by:Name

Harsh Gupta

Class

BBA+LLB (Hons.)

Subject

Corporate Law

Enrollment no.

1410103026

Admission no.

14GSOL103014

Semester

5th

Submitted To:Prof. Nizam Khan

TABLE OF CONTENT

SERIAL NUMBER
01
02
03
04
05
06

TITTLE
TABLE OF CONTENT
CERTIFICATE
ACKNOWLEDGEMENT
INDEX OF AUTHORITY
DECLARATION
CHAPTER-1

Introduction(SEBI)
CHAPTER-2

Securities Appellate Court

07

08

CHAPTER-3

The SEBI vs Sterlite Industries

(India) Ltd

09
10

CONCLUSION
BIBLIOGRAPHY

CERTIFICATE

The work undertaken by Mr. Nizam Khan is genuine to the best of my knowledge. The references used by
the student has been duly cited and acknowledged to my understanding.

Name & Signature

Harsh Gupta

ACKNOWLEDGEMENT
I am using this opportunity to express my gratitude to everyone who supported me throughout this
Corporate Law. I am thankful for their aspiring guidance, invaluably constructive criticism and friendly
advice during the project work. I am sincerely grateful to them for sharing their truthful and illuminating
views on a number of issues related to the project.
I express my warm thanks to my family members for providing me the financial supports for completing
this assignment.
I would also like to thank my faculty in charge prof. Nizam Khan for giving her expert advice and support
throughout this research work, who provided me with the facilities being required and conductive conditions
for my project.

Harsh Gupta

INDEX OF AUTHORITY
STATUTES
Indian Companies Act 2013
Indian Companies Act 1956
SEBI Act, 1992.
BOOKS

A Comparative Study of Companies Act 2013 with Rules and Companies Act 1956 , Taxmann
A Textbook of Company Law (Corporate Law), P.P.S.Gogna, 9th edition, 2013
Sanjeev Agarwal ,Guide to Indian Capital Market, Bharat Law house

CASES

Garikapati Veeraya v. N. Subbiah Choudhary, 1957 AIR 540, 1957 SCR 488
Hoosein Kasam Dada (India] Ltd. v. State of Madhya Pradesh,1953 AIR 221, 1953 SCR 987

DECLARATION

I Harsh Gupta hereby declare that this project report entitled The Securities & Exchange Board Of
India... vs Sterlite Industries (India) Ltd submitted by me, under the guidance of Mr. Nizam Khan
faculty of School of Law Galgotias University is my own and has not been submitted to any other
University or Institute or published earlier.
Place: Galgotias University
Date: 16/10/2016

CHAPTER 1
INTRODUCTION (SEBI)
The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India. It
was established in the year 1992 and given statutory powers on 12 April 1992 through the SEBI Act, 1992.
It was established by The Government of India on 12 April 1992 and given statutory powers in 1992 with
SEBI Act 1992 being passed by the Indian Parliament. SEBI has its headquarters at the business district of
Bandra Kurla Complex in Mumbai, and has Northern, Eastern, Southern and Western Regional Offices in
New Delhi, Kolkata, Chennai and Ahmedabad respectively. It has opened local offices at Jaipur and
Bangalore and is planning to open offices at Guwahati, Bhubaneshwar, Patna, Kochi and Chandigarh in
Financial Year 2013 - 2014. The Preamble of the Securities and Exchange Board of India describes the basic
functions of the Securities and Exchange Board of India as "...to protect the interests of investors in
securities and to promote the development of, and to regulate the securities market and for matters
connected there with or incidental there to".1
SEBI has to be responsive to the needs of three groups, which constitute the market:

the issuers of securities

the investors

the market intermediaries.

SEBI has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive. It drafts
regulations in its legislative capacity, it conducts investigation and enforcement action in its executive
function and it passes rulings and orders in its judicial capacity. Though this makes it very powerful, there is
an appeal process to create accountability. There is a Securities Appellate Tribunal which is a three-member
tribunal and is headed by Mr. Justice J P Devadhar, a former judge of the Bombay High Court. [6] A second
appeal lies directly to the Supreme Court. SEBI has taken a very proactive role in streamlining disclosure
requirements to international standards.2
1 http://www.the-laws.com/Encyclopedia/Browse/Case?CaseId=313002862100
2 http://www.yourarticlelibrary.com/education/sebi-the-purpose-objective-and-functions-ofsebi/8762/
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Chapter 2
SECURITY APPELLATE COURT
Section 15K of SEBI Act, 1992 empowers the Central Government to set up one or more Tribunals, for the
purpose making appeals against the orders of SEBI and its adjudicating officers. These tribunals will be
known as Securities Appellate Tribunal (SAT). In exercise of the power conferred, the Central Government
has set up one Tribunal at Mumbai. Composition of SAT.SAT shall consist of the following:

One Presiding officer

Two other members.

The Presiding Officer of SAT shall be appointed by the Central Government in consultation with the Chief
Justice of India or his nominee. The person to be appointed as the Presiding Officer must;

Be a sitting or retired Judge of the Supreme Court ;

Be a sitting or retired Chief Justice of a High Court ;
Be a sitting or retired Judge of a High Court, who has completed atleast 7 years of service.

The person so appointed shall hold office, earlier of the two:

for a period of 5 years ;

up to the age of 68 years.

The two members of SAT shall be appointed by the Central Government:The person to be appointed must;

A person of ability, integrity and standing who has shown capacity in dealing with problems relating

to securities market.
Have qualification and experience of Corporate Law, Securities Law, Finance, Economics or
Accountancy.

Person shall hold office, earlier of the two:

For a period of 5 years

Upto age of 62 years.

Appeal to SAT [Sec. 15T]

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Any person aggrieved, by an order of the SEB or by an order made by an adjudicating office may prefer an
appeal to SAT.
Exceptions: No appeal shall lie to SAT from an order made with the consent of the parties.
Time Limit: The appeal to SAT shall be filed within a period of 45 days from the date of receiving the
copy of the order of SEBI or adjudicating officer, as the case may be.
However, SAT may entertain an appeal after the expiry of 45 days, if it is satisfied that there was sufficient
cause for not filing it within that period. SAT shall send copy of every order made by it to the following
person: SEBI Concerned Adjudicating Officer Parities to Appeal. Appeal against the Orders of SAT [Sec
15Z] any person aggrieved by any decision or order of SAT may file an appeal to the Supreme Court. It may
be noted that the appeal can be made only on any Question of Law. The appeal shall be filed within 60 days
from the date of receiving a copy of the decision or order of SAT. However, the Supreme Court may allow a
further period of 60 days for making an appeal, if it is satisfied that the applicant was prevented by sufficient
cause from filing the appeal within the first 60 days. Powers of SAT [Sec 15U] The SAT shall have, for the
purpose of discharging their functions under SEBI Act, 1992, the same powers as are vested in a Civil Court
under the CPC, 1908, while trying a suit, in respect of the following matters, namely: Summoning and
enforcing the attendance of any person and examining him on oath. Requiring the discovery and production
of documents. Receiving evidence on affidavits. Issuing commissions for the examination of witness or
documents. Reviewing its decisions. Dismissing an application for default or deciding it ex parte. Setting
aside any order of dismissal of any application for default or any order passed by it ex parte any other matter
which may be prescribed.3

3 http://taxguru.in/sebi/securities-appellate-tribunal-sat-insight.html
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Chapter 3
The Securities & Exchange Board Of India vs Sterlite Industries (India) Ltd
By the amended Section 15L the composition of Securities Appellate Tribunal is changed in that the
Appellate Tribunal, which originally consisted of only one member, now consists of Presiding Officer and
two other members, to be appointed by the Central Government. Section 15M lays down that a person shall
not be qualified for appointment as the Presiding Officer of the Securities Appellate Tribunal unless he is
sitting or retired Judge of the Supreme Court or a sitting or retired Chief Justice of a High Court. Section
15T remains practically unchanged and provides for an appeal to the Securities Appellate Tribunal against
certain orders of the SEBI Board as mentioned in the said section. Under Section 15Z an appeal is now
provided to the Supreme Court which is to be filed within sixty days from the date of communication of the
order of the Securities Appellate Tribunal on any question of law arising out of such order. Under the old
Section 15Z appeal would lie on facts or law arising out of such order whereas under the amended provision
appeal would lie on question of law arising out of such order. The amendment to the Act was brought into
force by Securities and Exchange Board of India (Amendment) Ordinance, 2002 with effect from 29-102002. The Ordinance was replaced by the Securities and Exchange Board of India (Amendment) Act, 2002.
from the date of initiation of the proceedings the appellants acquired vested right of appeal to this court
under Section 15Z, which has since then been amended by the amending Act. In support of this contention
he relies on certain decisions to which reference may now be made. The leading case on the subject relied
on by the learned A.G. is the Colonial Sugar Refining Co. Ltd. v. Irving 1905 AC 369(A). In that case the
Privy Council held that although the right of appeal from the Supreme Court of Queensland to His Magesty
in Council given by the Order in Council has been taken away by the Australian Commonwealth Judiciary
Act, 1903, Section 39, Sub-section (2), and the only appeal therefrom now lies to the High Court of
Australia, yet the Act is not retrospective, and a right of appeal to the King in Council in a suit pending
when the Act was passed and decided by the Supreme Court afterwards was not taken away. The principle
laid down in the case of Colonial Sugar Refining Co. Ltd. (supra) was followed by the Supreme Court in
Hoosein Kasam Dada (India] Ltd. v. State of Madhya Pradesh4 . In that case pending the assessment on the
appellant's return the Berar Sales Tax Act, 1947 was amended requiring the payment of the entire assessed
amount as a condition precedent to the admission of the appeal. The Asst. Commissioner to whom the return
was transferred for disposal made an assessment against which the appellant preferred an appeal without
depositing the amount of tax in respect of which he had appealed. The Board of Revenue was of the view
that Section 22(1) as amended applied to the case as the assessment was made, and the appeal was preferred
4 1953 AIR 221, 1953 SCR 987
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after the amendment came into force and rejected the appeal. In appeal the Supreme Court following the
decision of the Privy Council in Colonial Sugar Refining Co. Ltd.'s case (supra) and certain other decisions
held that a right of appeal is not merely a matter of procedure. It is a matter of substantive right. This right
of appeal from the decision of an inferior tribunal to a superior tribunal becomes vested in a party when
proceedings are first initiated in and before a decision is given by, the inferior Court. Such a vested right
cannot be taken away except by express enactment or necessary intendment. The fact that the pre-existing
right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right
of appeal must also exist to support the continuation of that right. As the old law continues to exist for the
purpose of supporting the pre-existing right of appeal the old law must govern the exercise and enforcement
of that right of appeal and there can be no question of the amended provision preventing the exercise of that
right. Therefore the new provision is inapplicable and jurisdiction of the authority has to be exercised under
the old law which so continues to exit.
In Garikapati Veeraya v. N. Subbiah Choudhary 5the following propositions were laid down :
"(i) That the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of
proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding.
(ii) The right of appeal is not a mere matter of procedure but is a substantive right.
(iii) The institution of the suit carries with it the implication that all rights of appeal then in force are
preserved to the parties thereto till the rest of the career of the suit.
(iv) The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant
and exists as on and from the date the lis commences and although it may be actually exercised when the
adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the
institution of the suit or proceedings and not by the law that prevails at the date of its decision or at the date
of the filing of the appeal.
(v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly
or by necessary intendment and not otherwise." (p. 553) 6

5 1957 AIR 540, 1957 SCR 488

6 https://indiankanoon.org/doc/1204871/
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It is no doubt well settled that right of appeal is a substantive right and it gets vested in the litigant no
sooner the lis is commenced in court of the first instance and such right or any remedy in respect thereof
will not be affected by any repeal of the enactment conferring such right unless the repealing enactment
either expressly or by necessary implication takes away such right or remedy in respect thereof. The
question, however, is whether a litigant has or can have, vested right in a particular forum. Can he contend
as a matter of right that his suit or application should be tried by the forum which exist on the date when his
cause of action arose. Forum belongs to realm of procedure and does not constitute substantive right of a
party or a litigant. Therefore the appeal the right to which has arisen after a repealed Act, will have to be
filed in a forum provided for by the repealing Act.

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CONCLUSION
By the amending Act the remedy of appeal to the superior Court is not taken away. It is merely replaced by
an appeal to the Supreme Court. Undoubtedly, under the amended provision appeal would lie only on the
question of law arising out of the order of the Appellate Tribunal and not on law or fact as provided in old
Section 15Z but this pertains to the domain of the procedure and it cannot be said that the substantive right
of litigant is affected. When an appeal is provided to the Supreme Court on the question of law as distinct
from question of law or fact it is merely a matter of procedure how the appeal in question is to be heard and
disposed of by the Supreme Court. The right to prefer an appeal is derived from the provisions of Section
15Z of the SEBI Act and mere change of Forum cannot or will not whittle down the right itself and therefore
after coming into force of the amended provision of Section 15Z, appeal, will lie to the Supreme Court and
not to the High Court. Apart from the fact that Forum belongs to the realm of procedure and does not
constitute a substantive right, there is sufficient indication to the amending Act that after the amendment
came into force, no appeal will lie to the High Court. Under the amended Section 15Z composition of the
Securities Appellate Tribunal is radically changed. Under the old Section the Tribunal consisted of only one
member whereas under the amended provision the Tribunal consisted of a Presiding Officer and two other
members appointed by the Central Government. Under Section 15T appeal against the order of the SEBI
Board would lie to the newly constituted Tribunal. The amended Section 15Z provides an appeal to the
Supreme Court against the order of the Tribunal. It seems to us that by changing the composition of the
Tribunal and by providing appeal to the Supreme Court, the Legislature has clearly evidenced an intention
to the contrary.

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BIBLIOGRAPHY
The following book is used in the completion of this project

A Comparative Study of Companies Act 2013 with Rules and Companies Act 1956 , Taxmann
A Textbook of Company Law (Corporate Law), P.P.S.Gogna, 9th edition, 2013
Sanjeev Agarwal ,Guide to Indian Capital Market, Bharat Law house

The following statue is also used in the completion of this project

Indian Companies Act, 2013

Indian Companies Act 1956
Stock exchange boar od India act

And also the following websites were consulted for relevant materials: www.indiankanoon.org
www.westlawindia.com

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