Surging markets: CJI Chandrachud advises SEBI, SAT to be cautious, pitches for more tribunal benches

Chief Justice of India D Y Chandrachud on Thursday advised market regulator Securities and Exchange Board of India (Sebi) and the Securities Appellate Tribunal (SAT) to exercise caution as the stock markets are witnessing a robust rally. The CJI, while inaugurating new SAT premises, pitched for more tribunal benches to ensure that the "backbone is stable".

He urged authorities to consider opening up new benches of the SAT considering the higher workloads because of higher quantum of transactions and newer regulations, PTI reported.

Referring to newspaper articles calling the crossing of the 80,000 points milestone by the BSE as an ecstatic moment, where India is entering a "stratospheric domain", the CJI pointed out that such events emphasise the need for regulatory authorities to ensure that everyone holds their "balance and nerves" amid the wins.


"The more you see the surge in the stock market, the greater the role, I believe, for SEBI and SAT, as institutions which will exercise caution, celebrate the successes but at the same time, ensure that the backbone is stable," the CJI said.

In his view both SEBI and appellate tribunals like SAT assume "immense national importance" in fostering a stable and predictable investment environment, and explained how this can benefit in economic growth for the country.

"When investors feel assured that their investments are protected by law and that there are effective mechanisms for dispute resolution, they are more likely to invest in the country's markets. This influx of investment can lead to better economic outcomes such as increased capital formation, job creation and overall economic growth," the CJI said.

The role of SAT in the "dog eat dog" world of finance is that of a referee in ensuring that everybody plays by the rules, he said, stressing on the need to be updated by keeping pace with new developments.

With the rapid growth in the number of market participants and transaction volumes, there is a likelihood of an increase in disputes and may be even instances of regulatory non-compliance, he said.

In addition, issues like market conduct and corporate governance have increased appeals filed with SAT "manifold", the CJI said, pitching for an early filling up of the vacancies at SAT to ensure that the tribunal functions effectively and at full capacity.

He later told reporters that creating additional benches is a "policy issue" and he has flagged the issue as the Chief Justice of India given the growth in the work. "It is an aspect which should be considered by those who have responsibility for taking these decisions," he said.

SAT's presiding officer Justice P S Dinesh Kumar said there are 1,028 pending appeals in the SAT and it has disposed of over 6,700 appeals since its inception in 1997.

CJI also launched a new website of the SAT which has been created by the National Informatics Centre (NIC).