LexNATIONAL SECURITIES DEPOSITORY LTD. versus SECURITIES AND EXCHANGE BOARD OF INDIA
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[2017) 4 S.C.R. 901 NATIONAL SECURITIES DEPOSITORY LTD. v. SECURITIES AND EXCHANGE BOARD OF INDIA (Civil Appeal No. 5173 of 2006) MARCH 7, 2017 [PINAKI CHANDRA GHOSE AND R. F. NARIMAN, JJ.] Securities and Exchange Board of India Act, 1992 - ss. 11(1), A B 12, 151, l 5M, l 5T, l 5Z and 30 - Whether an administrative circular issued by SEBI u/s. 11 (l) can be challenged in appeal before C Securities Appellate Tribunal u/s. l 5T - Held: SEBI is an expert body created by the Act which has administrative, legislative and quasi-judicial functions - Under the Act, Appellate Tribunal is intended to hear appeals only against quasi-judicial orders - Thus, administrative orders such as circulars issued uls. 11 (1), as in the present case, are outside the appellate jurisdiction of the Tribunal D - It is orders passed ulss. 11 (4), 11 (b), 11 (d), 12(3) and 15-1 and under the Rules and Regulations, being quasi-judicial orders, that are subject matter of appeal uls.l 5T- Securities Laws (Amendment) Act, 1995. Administrative law - Administrative order and Quasi-judicial E order - Distinction between - Discussed. Dismissing the appeal by NSDL and allowing the appeal by SEBI, the Court HELD: 1.1 Under Section 15M of the Securities Exchange Board of India Act, 1992, a person shall not be qualified for F appointment as the Presiding Officer of the three member Appellate Tribunal unless he is a sitting or retired Judge of the Supreme Court, or a sitting or retired Chief Justice of a High Court, or is a sitting or retired Judge of a High Court who has completed not less than 7 years of service as a Judge in a High G Court. This is one indicia of the fact that the Appellate Tribunal, being manned by a member of the higher judiciary, is intended to hear appeals only against quasi-judicial orders. [Para 71 [907-A- B] H 901 902 SUPREME COURT REPORTS [2017] 4 S.C.R. A 1.2 Also, appeals are to be filed by persons aggrieved not only by an order of the Board made under the SEBI Act, Rules or Regulations, but by orders made by an adjudicating officer under the Act. Under Section 15-I, the Board can appoint an officer not below the rank of a Division Chief to be an adjudicating officer to hold an inquiry, give a hearing to the person concerned and B thereafter impose a penalty, all of which points to only quasi- j udicial functions being exercised by such officers. [Para 8) [907- C-D) 1.3 Under sub-section (3) of Section 15T, every appeal is to be filed within a period of 45 days from the date on which a C copy of the order made by the Board or the adjudicating officer, . as the case may be, is received by him. Generally administrative orders and legislative regulations made by the Board are never received personally by "the person aggrieved". This is another pointer to the fact that the order spoken of in sub-sectiott (1) of D Section 15T is only a quasi-judicial order. Under sub-section (4) the Appellate Tribunal may ultimately pass orders confirming, modifying or setting aside the order appealed against. Yet another indicator is found under sub-section (5) of Section 15T by which a copy of every order made by the Appellate Tribunal is to be sent to the Board, the parties to the appeal and to the concerned E adjudicating officer. The concerned adjudicating officer and the parties to the appeal obviously refer only to persons involved in a quasi-judicial proceeding. [Paras 8, 9) [907-D-E, G-H) F Clariant International Ltd. & Anr. v. Securities & Exchange Board of India (2004) 8 SCC 524 : [2004) 3 Suppl. SCR 843 - followed. 1.4 Under Section 15Z of the Act, an appeal lies from any "decision or order" of the Securities Appellate Tribunal to the Supreme Court on questions of law arising out of such orders. Obviously, these orders are also quasi-judicial in nature. All this G leads to distinctions between quasi judicial and administrative orders that have to be made on first principles. [Para 10] [908-A- B) H 1.5 SEBI is an expert body created by the Act which has administrative, legislative and quasi-judicial functions. It may be NATIONAL SECURITIES DEPOSITORY LTD. v. SEBI 903 stated that both Rules made under Section 29 as well as A Regulations made under Section 30 have to be placed before Parliament under Section 31 of the Act. It is clear that it is orders under Sections 11(4), ll(b), ll(d), 12(3) and 15-1 of the Act, being quasi-judicial orders, and quasi ju
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