SAT rejects Reliance Industries appeal against market regulator

The order also states that the said the Section was inserted to Sebi Act with retrospective effect from April 20, 2007, by Ordinance and that bars appeal against any order passed in consent proceedings.

In a setback to Reliance Industries, the Securities Appellate Tribunal on Monday upheld Sebi’s decision to reject the company’s request to settle the allegations of illegal gains amounting to Rs 513 crore (via sale of Reliance Petroleum’s shares in 2007), under the consent mechanism.

While RIL had approached SAT challenging Sebi’s decision to consider to settle the case under consent mechanism, the tribunal has maintained that the issue cannot be taken up for consent as the Ordinance on Sebi Bill, promulgated for the third time by the President in January 2014, does not permit any appeal against orders passed in consent proceedings.

“There is no dispute that Section 15JB itself has been in and out of operation in view of promulgation and lapsing of Ordinance No. 8 of 2013 and Ordinance No. 9 of 2013 from time to time, and there is no dispute that as on date Section 15JB (4) is in operation. Since Section 15JB(4) bars appeal against any order passed in consent proceedings, we have no option but to dismiss the appeal,” said the SAT order.

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The order also states that the said the Section was inserted to Sebi Act with retrospective effect from April 20, 2007, by Ordinance and that bars appeal against any order passed in consent proceedings.

“It (Para 40) makes it clear that Sebi changed the rules of the game midway through Ordinances leaving no option to SAT but to dismiss the appeal as not maintainable. This appeal was maintainable and the rejection of the consent application was wrong. Clearly the appeal would have been allowed had it not been for the Ordinances having retrospective effect,” a RIL spokesperson said. The issue relates to a November 2007 case where it has been alleged that RIL, in connivance with other entities, made ‘illegal gains’ of Rs 513 crore by trading in Reliance Petroleum shares at the time when RIL and RPL were getting merged.