The Securities Appellate Tribunal (SAT) directed market regulator Securities and Exchange Board of India (Sebi) to refund Rs 635,521 to an appellant or pay an interest of 12 per cent per annum. This was a rare instance where the tribunal has threatened the market regulator to pay penal interest rate.

A year ago, Sebi had imposed a penalty of Rs 600,000 on an individual for violation under Prohibition of Fraudulent and Unfair Trade Practices (FUTP). The individual moved SAT against the order. However, during the pendency of the appeal Sebi’s recovery officer recovered an amount of Rs 635,521 on December 17, 2019.

In February 2020, Sebi’s order was set aside by SAT. However, Sebi refused to refund the amount stating that it planned to appeal SAT’s order before the Supreme Court.

The appellant again filed an urgency application before SAT seeking direction to be issued to Sebi to refund the order as he as in dire need of money to undergo a spinal surgery.

The appellant submitted medical certificates and gave an undertaking that he would again place the penal amount with Sebi if the apex court stayed the SAT order.

Sebi counsel argued that it couldn’t file an appeal before the SC due to the lockdown. The counsel further said the regulator would refund the amount if the applicant recorded the undertaking before the tribunal.

After hearing the both parties, SAT held that “there was no justification for Sebi to withhold any amount.” Due to the covid-19 pandemic, SAT heard the matter through video conferencing.

SAT’s order was issued on May 15 and the deadline to repay was set as May 22. It could not be immediately ascertained if Sebi has repaid the amount.