Date:01/02/2005 URL: http://www.thehindubusinessline.com/2005/02/01/stories/2005020102351100.htm

Back No decision yet on new SAT members

Veena Venugopal

Mumbai , Jan. 31

THE three-member Securities Appellate Tribunal (SAT) will soon find itself unable to continue functioning as two of its members are due to retire shortly and replacements are yet to be named.

Mr N.L. Lakhanpal is due to retire on February 15 and Dr B. Samal will retire on March 1. These members were appointed only last year, when the one-member tribunal was expanded to three members. However, as the retirement age of members, other than the presiding officer, is 62 years, their tenures come to an end within a year of taking charge.

The SAT team has been clearing the backlog of appeals through an effective system for hearing appeals and proclaiming orders. However, with the tribunal soon falling short of the required quorum, there would be a vacuum created till the positions are filled again. Though a committee has been set up to recruit new members or extend the tenure of the current members, no definitive decisions have been taken so far, according to sources.

The retirement age of the members is stated in the Ordinance that set up the three-member panel. However, the Company Law Board had recently extended the tenures of two of its members on a contract basis for six months, in order to ensure continuity. This option could be exercised for the SAT members also.

In the last few months, SAT has set aside several high profile orders passed by SEBI. There are also speculations that the Presiding Officer of SAT, Mr Justice Kumar Rajaratnam, has put in his papers. Mr Rajaratnam, however, denied this. Last year, he was appointed for five years; retirement age for the presiding officer is 68 years as per the Ordinance.

The legal community is keenly watching the succession plans at SAT. "The Bar has noticed that cases are being adjourned till after March. This is because of the degree of uncertainty about the Tribunal," said a leading securities lawyer.

Though the Tribunal can function during February with one presiding officer and one member, statute does not provide for its functioning without both members. This makes a strong case for the names to be announced as soon as possible, whether it is extension of tenure to the current members or nominating new ones, said a lawyer.

The Tribunal has passed orders on close to 130 cases during the last year. Several appeals are pending to be heard by the Tribunal. These and any fresh appeals would get affected because of the lack of quorum in the tribunal.