Avadhut Sathe moves SAT again, seeks release of funds to challenge order in Supreme Court, order reserved

Avdhut Sathe moves SAT again, seeks release of funds to challenge order in Supreme Court, order reserved

• Avadhut Sathe seeks continuation of interim relief from SAT for legal expenses
• SEBI argues SAT lacks jurisdiction to grant relief after appeal disposal
• Tribunal has reserved its order on whether interim measures can continue

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Avadhut Sathe and his trading academy have moved the Securities Appellate Tribunal (SAT) again, seeking continuation of interim measures earlier granted during the pendency of his appeal, arguing that the limited relief is necessary to enable him to pursue a further challenge before the Supreme Court.

In the tribunal, Sathe’s side argued that his application for withdrawal of Rs 2.25 crore towards legal expenses was not an attempt to review or modify SAT’s final order delivered on January 22, but merely a request to continue interim relief that had been operating while the appeal was pending. Sathe’s counsel said, “my application today is not in the nature of review, clarification, modification”. It was further argued that, “It is a simpliciter request for continuation of interim relief so that the matter may be carried further in appeal.”

Sathe’s counsel pointed out that during the pendency of the proceedings, SAT had permitted withdrawal of Rs 2.25 crore towards monthly expenses. Although his present application reflects overall expenses of around Rs 8 crore, he said he was only seeking continuation of the earlier limited withdrawal.

He argued that such a prayer can arise only after dismissal of the appeal. “One cannot anticipate dismissal and seek continuation in advance,” he said, responding to SEBI’s contention that the plea was barred by res judicata.

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Invoking Rule 21 of the SAT Rules, Sathe’s side submitted that the tribunal retains wide powers to secure the ends of justice and prevent abuse of process. Denial of access to funds, he argued, would effectively impede his ability to approach the Supreme Court, as his bank accounts remain frozen.

Sathe’s side also clarified that the Rs 1.6 crore shown under legal expenses represented past expenses for December, January and February, and not projected future costs.

SEBI’s side opposed the application, arguing that once the appeal was disposed of, SAT became functus officio, meaning “having performed his or her office”. In law, it signifies that once a case is fully discharged by the court, it has no further authority, jurisdiction, or power to revisit, amend, or alter its previous decision, ensuring finality. SEBI’s side said that in such a matter, SAT lacked jurisdiction to entertain any further miscellaneous application. The regulator contended that interim orders merge into the final order and cease to exist, and that principles of res judicata barred revival of relief not granted in the judgment. It also submitted that a party allegedly in breach of regulatory directions cannot seek equitable relief.

On SAT’s power to review cases, SEBI’s side said, “all those powers are to be exercised till an appeal is pending, not after the appeal is disposed of”.

SEBI's counsel also highlighted that despite the SEBU's order Sathe has not removed the testimonials to which were misleading and also have not supplied with the full inventory of assets.

The tribunal has reserved its order in the case after hearing both sides. The outcome will be significant in determining whether the tribunal retains jurisdiction to continue interim monetary measures after disposal of the appeal.

On January 22, SAT had directed Avadhut Sathe and his academy to make a fixed deposit of Rs 100 crore in a bank account, with a lien marked in favour of the market regulator, SEBI. On December 4, SEBI had passed an order of impounding Rs 546 crore and imposing restrictions on trading in the market, along with a debit freeze on bank and demat accounts on Sathem and his trading academy.

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