SAT: Locus standi before the SAT

Section 15T of the Securities and Exchange Board of India Act, 1992 (Act) provides for appeal to the Securities Appellate Tribunal (SAT). Section 15T, inter alia, states that any person aggrieved by an order of the Securities and Exchange Board of India (Board) or by an order made by an adjudicating officer under the Act may prefer an appeal to the SAT.

In CSX Members Welfare Association v. SEBI, decided on December 11, 2009, SAT interpreted the meaning of “person aggrieved” to address the preliminary issue of whether the appellant had the locus standi to file an appeal before the SAT. The facts in the CSX case were that the Board had ordered the suspension of certificates of registration of many brokers who had not paid their fee. Against this order, CSX Members Welfare Association, an association of stockbrokers on the Coimbatore Stock Exchange Limited and the Interconnected Stock Exchange of India Limited, had filed the appeal.

To resolve the issue, SAT relied on the test laid down by the Supreme Court in the case of Jasbhai Motibhai Desai v. Roshan Kumar and others, AIR 1976 SC 578. Briefly stated, the test laid down in the Jasbhai case is whether the appellant is the person “against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him something, or wrongfully affected his title to something”. One must also see “whether the appellant has a special and substantial grievance of his own beyond some grievance or inconvenience suffered by him in common with the rest of the public”. To make it statute specific, the Supreme Court went on to hold that one must also look whether the statute “in the context of which the scope of the words person aggrieved is being considered, a social welfare measure designed to lay down ethical or professional standards of conduct for the community, or is it a statute dealing with private rights of particular individuals.”

Applying the above test, SAT held that CSX Members Welfare Association had no locus standi before it as it cannot be said to be a person aggrieved, and dismissed the appeal