NATIONAL SECURITIES DEPOSITORY LTD.versusSECURITIES AND EXCHANGE BOARD OF INDIA

                       [2017) 4 S.C.R. 901


         NATIONAL SECURITIES DEPOSITORY LTD.                         A
                                v.
      SECURITIES AND EXCHANGE BOARD OF INDIA
                 (Civil Appeal No. 5173 of 2006)
                         MARCH 7, 2017                               B
  [PINAKI CHANDRA GHOSE AND R. F. NARIMAN, JJ.]
       Securities and Exchange Board of India Act, 1992 - ss. 11(1),
12, 151, l 5M, l 5T, l 5Z and 30 - Whether an administrative circular
issued by SEBI u/s. 11 (l) can be challenged in appeal before C
Securities Appellate Tribunal u/s. l 5T - Held: SEBI is an expert
body created by the Act which has administrative, legislative and
quasi-judicial functions - Under the Act, Appellate Tribunal is
intended to hear appeals only against quasi-judicial orders - Thus,
administrative orders such as circulars issued uls. 11 (1), as in the
present case, are outside the appellate jurisdiction of the Tribunal D
- It is orders passed ulss. 11 (4), 11 (b), 11 (d), 12(3) and 15-1 and
under the Rules and Regulations, being quasi-judicial orders, that
are subject matter of appeal uls.l 5T- Securities Laws (Amendment)
Act, 1995.
      Administrative law - Administrative order and Quasi-judicial   E
order - Distinction between - Discussed.
     Dismissing the appeal by NSDL and allowing the appeal by
SEBI, the Court
      HELD: 1.1 Under Section 15M of the Securities Exchange
Board of India Act, 1992, a person shall not be qualified for F
appointment as the Presiding Officer of the three member
Appellate Tribunal unless he is a sitting or retired Judge of the
Supreme Court, or a sitting or retired Chief Justice of a High
Court, or is a sitting or retired Judge of a High Court who has
completed not less than 7 years of service as a Judge in a High G
Court. This is one indicia of the fact that the Appellate Tribunal,
being manned by a member of the higher judiciary, is intended to
hear appeals only against quasi-judicial orders. [Para 71 [907-A-
B]

                                                                     H
                               901
902           SUPREME COURT REPORTS                     [2017] 4 S.C.R.


A        1.2 Also, appeals are to be filed by persons aggrieved not
  only by an order of the Board made under the SEBI Act, Rules or
  Regulations, but by orders made by an adjudicating officer under
  the Act. Under Section 15-I, the Board can appoint an officer not
  below the rank of a Division Chief to be an adjudicating officer to
  hold an inquiry, give a hearing to the person concerned and
B thereafter impose a penalty, all of which points to only quasi-
  j udicial functions being exercised by such officers. [Para 8) [907-
  C-D)
         1.3 Under sub-section (3) of Section 15T, every appeal is
   to be filed within a period of 45 days from the date on which a
C copy of the order made by the Board or the adjudicating officer,
 . as the case may be, is received by him. Generally administrative
   orders and legislative regulations made by the Board are never
   received personally by "the person aggrieved". This is another
   pointer to the fact that the order spoken of in sub-sectiott (1) of
D Section 15T is only a quasi-judicial order. Under sub-section (4)
   the Appellate Tribunal may ultimately pass orders confirming,
   modifying or setting aside the order appealed against. Yet another
   indicator is found under sub-section (5) of Section 15T by which
   a copy of every order made by the Appellate Tribunal is to be
   sent to the Board, the parties to the appeal and to the concerned
E adjudicating officer. The concerned adjudicating officer and the
   parties to the appeal obviously refer only to persons involved in
   a quasi-judicial proceeding. [Paras 8, 9) [907-D-E, G-H)
           Clariant International Ltd. & Anr. v. Securities &
           Exchange Board of India (2004) 8 SCC 524 : [2004) 3
 F         Suppl. SCR 843 - followed.
         1.4 Under Section 15Z of the Act, an appeal lies from any
   "decision or order" of the Securities Appellate Tribunal to the
   Supreme Court on questions of law arising out of such orders.
   Obviously, these orders are also quasi-judicial in nature. All this
 G leads to distinctions between quasi judicial and administrative
   orders that have to be made on first principles. [Para 10] [908-A-
      B)
           1.5 SEBI is an expert body created by the Act which has
      administrative, legislative and quasi-judicial functions. It may be
 H
     NATIONAL SECURITIES DEPOSITORY LTD. v. SEBI                   903


stated that both Rules made under Section 29 as well as A
Regulations made under Section 30 have to be placed before
Parliament under Section 31 of the Act. It is clear that it is orders
under Sections 11(4), ll(b), ll(d), 12(3) and 15-1 of the Act, being
quasi-judicial orders, and quasi judicial orders made under the
Rules and Regulations that are the subject matter of appeal under
Section 15T. Administrative orders such as circulars issued in B
the" present case under Section 11(1) of the Act are obviously
outside the appellate jurisdiction of the Tribunal. [Paras 21, 241
[913-F; 918-B-D]
     Province of Bombay v. Kushaldas S. Advani [1950]
     SCR 621; Shivji Nathubhai v. Union of India & Ors.            c
     [1960] 2 SCR 775; Jayantilal Amrit Lal Shodhan v. F
     N. Rana & Ors. (1964] 5 SCR 294; Govindbhai
     Gordhanbhai Patel & Ors. v. Gulam Abbas Mulla
     Allibhai & Ors. [1977] 2 SCR 511; PTC India Ltd. v.
     Central Electricity Reglatory Commission (2010) 4 SCC         D
     603: [2010) 3 SCR 609; Bharat Sanchar Nigam Ltd. v.
     Telecom Regulatory Authority of India & Ors. (2014) 3
     SCC 222 : [20131 12 SCR 999 - followed.
      Indian National Congress (I) v. Institute of Social
      Welfare & Ors. (2002) 5 SCC 685: [200213SCR1040;
                                                                   E
      Bharat Sanchar Nigam Ltd. v. Telecom Regulatory
      Authority of India & Ors. (2014) 3 SCC 222 : (2013)
      12 SCR 999 - relied on.
      Shankarlal Aggarwala v. Shankarlal Poddar [1964] 1
      SCR 717; N. Misra v. Dr H.K. Paintal [1990) 2 SCR
      84 - referred to.                                            F
      The King v. Electricity Commissioners (1924) 1 KB 171
      - referred to.
                        Case Law Reference
      (1924) 1 KB 171           referred to           Para 11
                                                                   G
      [1950] SCR 621            followed              Para 12
      [1960) 2 SCR 775          followed              Para 13
      [2002] 3 SCR 1040       relied on              Para 14
      (1964) 1 SCR 717        referred to            Para 15
      [1964] 5 SCR 294        followed               Para 16       H
904           SUPREME COURT REPORTS                        [2017] 4 S.C.R.


A           [1977) 2 SCR 511                 followed         Para 16
            [1990] 2 SCR 84                  referred to      Para 16
            [2010) 3 SCR 609                 followed         Para 17
            [2013) 12 SCR 999                followed         Para 19
            (2004] 3 Suppl. SCR 843          followed         Para 20
B
            CIVIL APPELLATE JURiSDICTION: Civil Appeal No. 5173
      of 2006.
           From the Judgment and Order dated 29.09.2006 of the Securities
      Appellate Tribunal, Mumbai in Appeal No. 20712005
 c                                       WITH
            C.A. No. 186 of 2007.
            Chander Uday Singh, Sr. Adv., Mayank Mishra, Ritunjay Gupta,
      Dheeraj Nair, Ms. Bina Gupta, Rahul Gupta, Rishi Gautam, Bhargava
      V. Desai, Ms. Akriti Dewan, Vaibhav, Advs. for the appearing parties.
 D
            The Judgment of the Court was delivered by
          R. F. NARIMAN, J. 1. Thepresentappealraisesaninteresting
   question as to whether an administrative circular that is issued by SEBI
   under Section 11 (1) of the Securities Exchange Board of India Act, 1992,
 E can be the subject matter of appeal under Section 15T of the said Act.
          2. By an administrative circular dated 9th November, 2005, SEBI
   under the caption "review of dematerialization charges" issued an
   administrative circular under Section 11 (1) of the SEBI Act to protect
   the interests of investors in securities and to promote the development
 F of, and to regulate the securities market. Depositories were advised by
   the said circular to amend all relevant bye-laws, rules and regulations in
   order to see that with effect from 9th January, 2006, no charges shall be
   levied by a depository on DPs and consequently by a DP on a beneficiary
   owner when a beneficiary owner transfers all securities lying in his
   account to another branch of the same DP or to another DP of the same
 G depository or another depository, provided the BO account at transferee
   DP and that transferor DP are identical in all respects.
          3. A preliminary objection was raised in the appeal filed by the
   respondent before the Securities Appellate Tribunal. It was urged that
   wider the SEBIAct, SEBI has administrative, legislative and quasi-judicial
 H functions. Appeals preferred to the Securities Appellate Tribunal can
      NATIONAL SECURITIES DEPOSITORY LTD. v. SEBI                              905
                  [R. F. NARIMAN, J.]

only be from quasi-judicial orders and not administrative and legislative A
orders. This preliminary objection was turned down by the impugned
judgment dated 29m September, 2006, by the Securities Appellate Tribunal.
According to the Tribunal, the expression "order" is extremely wide,
and there being nothing in the Act to restrict an appeal only against
quasi-judicial orders, appeals would lie against all three types of orders B
under the Act i.e. administrative orders, legislative orders as well as
quasi-judicial orders. This was held purportedly following the decision
 in Clariant International Ltd. & Anr. vs. Securities & Exchange
Board of India [(2004) 8 SCC 524). The Tribunal, therefore, rejected
the preliminary objection and went into the merits of the arguments against
 the impugned circular, and dismissed the same.                             C
       4. Cross appeals have been filed before us. Civil Appeal No.5173
of2006 has been filed by the National Securities Depositories Ltd. Vs.
SEBI on the merits of the dismissal, whereas Civil Appeal No.186 of
2007 has been filed by the SEBI against the rejection of the preliminary
objection raised before the Securities Appellate Tribunal. We will take D
up the second appeal first inasmuch as ifthe preliminary objection were
to succeed, it is clear that the merits would not have to be gone into.
       5. It was urged on behalf of the appellant in the second civil appeal
that the appeal filed under Section 15T of the SEBIAct is only restricted
to quasi-judicial orders and not administrative or legislative orders or       E
directions passed by SEBI under the 1992 Act. According to the learned
counsel on behalf of the appellant, the Appellate Tribunal judgment is
wrong and needs to be reversed inasmuch as it has clearly stated that
even against legislative regulations, the Appellate Tribunal would have
jurisdiction, which is contrary to two direct judgments under allied Acts
namely, PTC India Ltd. vs. Central Electricity Regulatory                      F
Commission [(2010) 4 SCC 603) under pari materia provisions under
the Electricity Act, 2003, and Bharat San char Nigam Ltd. vs. Telecom
Regulatory Authority oflndia & Ors. [(2014) 3 SCC 222) under the
Telecom Regulatory Authority of India Act, 1997. He stated that the
same fate would await administrative orders as well and that the reasoning     G
of these two judgments would lead us necessarily to this conclusion.
      6. On the other hand, learned counsel for the respondent urged
before us that the word "order" not having been defined is extremely
wide and would, therefore, include all orders of the Board which, as has
been pointed out, would be administrative and legislative orders as well. H
906          SUPREME COURT REPORTS                            (201~] 4 S.C.R.



A The controversy being in a narrow compass, it is necessary for us to lay
  down the Jaw with some clarity.
          7. Section 15T of the Act reads as follows :
          "15T. Appeal to the Securities Appellate Tribunal.
B         (1) Save as provided in sub-section (2), any person aggrieved,-
          (a) by an order of the Board made, on and after the commencement
          of the Securities Laws (Second Amendment) Act, 1999, under
          this Act, or the rules or regulations made thereunder; or
          (b) by an order made by an adjudicating officer under this Act,
C         may prefer an appeal to a Securities Appellate Tribunal having
          jurisdiction in the matter.
          (2) ********
          (3) Every appeal under sub-section ( 1) shall be filed within a period
          of forty-five days from the date on which a copy of the order
D
          made by the Board or the Adjudicating Officer, as the case may
          be, is received_ by him and it shall be _in such form and be
          accompanied by such fee as may be prescribed :
          Provided that the Securities Appellate Tribunal may entertain an
          appeal after the expiry of the said period of forty-five days if it is
E         satisfied that there was sufficient cause for not filing it within that
          period.
          (4) On receipt of an appeal under sub-section (1 ), the Securities
          Appellate Tribunal may, after giving the parties to the appeal, an
          opportunity of being heard, pass such orders thereon as it thinks
 F        fit, confirming, modifying or setting aside the order appealed
          against.
          (5) The Securities Appellate Tribunal shall send a copy of every
          order made by it to the Board, the parties to the appeal and to the
          concerned Adjudicating Officer.
G
          (6) The appeal filed before the Securities Appellate Tribunal under
          sub-section (1) shall be dealt with by it as expeditiously as possible
          and endeavour shall be made by it to dispose of the appeal finally
          within six months from the date of receipt of the appeal."
           This Section appears in Chapter VIB inserted by an amendment
H
     NATIONAL SECURITIES DEPOSITORY LTD. v. SEBI                           907
                 [R. F. NARIMAN, J.]

Act of 199S. It is interesting to note that under Section lSM, a person A
shall not be qualified for appointment as the Presiding Officer of the
three member Appellate Tribunal unless he is a sitting or retired Judge of
the Supreme Court, or a sitting or retired Chief Justice of a High Court,
or is a sitting or retired Judge of a High Court who has completed not
less than 7 years of service as a Judge in a High Court. This i~ one B
indicia o!' the fact that the Appellate Tribunal, being manned by a member
of the higher judiciary, is intended to hear appeals only against quasi-
judicial orders. ·
       8. Also, appeals are to be filed by persons aggrieved not only by
an order of the Board made under the SEBI Act, Rules or Regulations,
but by orders made by an adjudicating officer under the Act. Under C
Section l S-I, the Board can appoint an officer not below the rank of a
Division Chief to be an adjudicating officer to hold an inquiry, give a
hearing to the person concerned and thereafter impose a penalty, all of
which points to only quasi-judicial functions being exercised by. such
officers. Under sub-section (3) of Section !ST, every appeal is to be D
filed within a period of 4S days from the date on which a copy of the
order made by the Board or the adjudicating officer, as the case may be,
is received by him. Generally administrative orders and legishtive
regulaticns made by the Board are never received personally by "the
person aggrieved". This is another pointer to the fact that the order
spoken of in sub-section (1) of Section ! ST is only a quasi-judicial order. E
Also, it is important to note under sub-section (4) that the Appellate
Tribunal may ultimately pass orders confirming, modifying or setting aside
the order appealed against. In the Clariant judgment referred to
hereinabove, paragraph 74 clearly states that "the jurisdiction of the
appellate authority under the Act is not in any way fettered by the statute F
and thus it exercises all the jurisdiction as that of the Board". This being
the case, it is clear that the appeal being a continuation of the proceeding
before the Board, the proceeding can only be quasi-judicial in nature.
      9. Yet another indicator can be found under sub-section (S) of
Section lST by which a copy of every order made by the Appellate G
Tribunal is to be sent to the Board, the parties to the appeal and tv the
concerned adjudicating officer. The concerned adjudicating officer and
the parties to the appeal obviously refer only to persons involved in a
quasi-judicial proceeding.

                                                                            H
908             SUPREME COURT REPORTS                           [2017] 4 S.C.R.


A            10. Under Section 15Z of the Act, an appeallies from any "decision
      or order" of the Securities Appellate Tribunal to the Supreme Court on
      questions of law arising out of such orders. Obviously, these orders are
      also quasHudicial in nature. All this leads to distinctions between quasi
      judicial and administrative orders that have to be made on first principles.
B            11. For this we have to hearken back to the classic case of The
      King vs. Electricity Commissioners [( 1924) 1 KB 171]. In a
      celebrated judgment given by Lord Justice Atkin, the definition of a quasi-
      judicial order is
            "Whenever any body of persons having legal authority to determine
c           questions affecting rights of subjects, and having the duty to act
            judicially, act in excess of their legal authority, they are subject to
            the controlling jurisdiction of the King's Bench Division exercised
            in these writs."
          12. This celebrated passage has been referred to time and again
D in tht: Supreme Court's judgments. Thus in Province of Bombay vs.
  Kushaldas S. Advani [(1950) SCR 621], it was held
              "(i) That, if a statute empowers an authority, not being a Court in
              the ordinary sense, to decide disputes arising out of a claim made
              by any party under the statute which claim is opposed by aqother
E             party and to determine the respective rights of the contesting
              parties who are opposed to each other, there is a !is and prima
            · facie, and in the absence of anything in the statute to the contrary
              it is the duty of the authority to act judicially and the decision of
              the authority is a quasi-judicial act; and

F            (ii) that if a statutory authority has power to do any act which will
             prejudicially affect the subject, then, although there are not two
             parties apart from the authority and the contest is between the
             authority proposing to do the act and the subject opposing it, the
             final determination of the authority will yet be a quasi-judicial act
             provided the authority is required by the statute to act judicially."
G
            13. This statement of the law has been followed in Shivji
      Nathubhai vs. Union oflndia & Ors. [(1960) 2 SCR 775], where the
      question which faced the Supreme Court was whether the Central
      Government's power under Rule 54 of the Mineral Concession Rules,
      1949, to review administrative orders could be stated to be in a
H
     NATIONAL SECURITIES DEPOSITORY LTD. v. SEBI                                909
                 [R. F. NARIMAN, J.]

quasi-judicial capacity. After setting out Lord Justice Atkin's passage in A
Advani's case (supra), this Court held that three requisites were
necessary in order that the act of an administrative body be characterized
as quasi-judicial :
      (i) There must be legal authority;
      (ii) This authority must be to determine questions affecting the          8
           rights of subjects; and
      (iii)There must be a duty to act judicially.
         Applying the aforesaid tests, it was held that the Ce!ltral
Government's power of review under Rule 54 was quasi-judicial in that           c
there is legal authority to determine questions affecting the rights of
subjects and the duty to act judicially which involves a hearing and a
decision on the merits of the case.
       14. Similarly, in Indian National Congress (I) vs. Institute of
Social Welfare & Ors. [(2002) 5 SCC 685], this Court held that the D
exercise of powers under Section 29A of the Representation of the People
Act, 1951 by the Election Commission is a quasi-judicial power. After
referring to R. vs. Electricity Commissioner (supra) and Province
of Bombay vs. Kushaldas S. Advani (supra), this Court laid down :
        "The legal principles laying down when an act of a statutory            E
       authority would be a quasi-judicial act, which emerge from the
       aforestated decisions are these:
       Where (a) a statutory authority empowered under a statute to do
       any act (b) which would prejudicially affect the subject (c) although
       there is no tis or two contending parties and the contest is between      F
       the authority and the subject and (d) the statutory authority is
       required to act judicially under the statute, the decision of the said
       authority is quasi-judicial.
       Applying the aforesaid principle, we are of the view that the
       presence of a /is or contest between the contending parties before
       a statutory authority, in the absence of any other attributes of a G
       quasi-judicial authority is sufficient to hold that such a statutory
       authority is quasi-judicial authority. However, in the absence of a
       /is before a statutory authority, the authority would be quasi-judicial
       authority if it is required to act judicially." [paras 24 and 25]
                                                                                 H
910             SUPREME COURT REPORTS                           [2017] 4 S.C.R.


A              It can be seen from the aforesaid decision that in addition to the
      tests already laid down, the absence of a !is between the parties would
      not n-:cessarily lead to the conclusion that the power conferred on an
      administrative body would not be quasi-judicial -so long as the aforesaid
      three tests are followed, the power is quasi-judicial.
B           IS. In ShankarlalAggarwala vs. Shankarlal Poddar [(1964) I
      SCR 717], the question posed before this Court was whether an order
      ofa Company Judge which confirms a sale is administrative or judicial.
      This Court held -
             "It is perhaps not possible to formulate a definition which would
c           satisfactorily distinguish, in this context, between an administrative
            and a judicial order. That the power is entrnsted to or wielded by
            a person who functions as a Court is not decisive of the question
            whether the act or decision is administrative or judicial. But we
            conceive that an administrative order would be one which is
            directed to the regulation or supervision of matters as distinguished
D           from an order which decides the rights of parties or confers or
            refuses to confer rights to property which are the subject of
            adjudication before the Court. One of the tests would be whether
            a matter which involves the exercise of discretion is left for the
            decision of the authority, particularly if that authority were a Court,
E           and if the discretion has to be exercised on objective, as
            distinguished from a purely subjective, consideration, it would be
            a judicial decision. It has sometimes been said that the essence of
            a judicial proceeding or of a judicial order is that there should be
            two parties and a !is between them which is the subject of
            adjudication, as a result of that order or a decision on an issue
F           between a proposal and an opposition. No doubt, it would not be
            possible to describe an order passed deciding a tis before the
            authority, that it is not a judicial order but it does not fol!ow that
            the absence ofa /is necessarily negatives the order being judicial."
            [at pages 728- 729]
G        16. Two other decisions give us an interesting insight into the
  difference between administrative and quasi-judicial orders. In
  JayantilalAmrit Lal Shodhan vs. F.N. Rana & Ors. [(1964) S SCR
  294], this Court held that the report of a Collector made under Section
  SA of the Land Acquisition Act is an administrative decision despite the
H fact that the Collector has to give the objector an opportunity of being
      NATIONAL SECURITIES DEPOSITORY LTD. v. SEBI                                911
                  [R. F. NARIMAN, J.]

heard. This was held because the Collector is not required to arrive at          A
any decision on the !is presented to him. He has to submit the case for
the decision of the appropriate Government together with a report
containing recommendations on objections. It is thus clear that the
Collector's report would not determine any question that affects rights
even though there may be a duty to act judicially in the sense thr.t the
                                                                                 B
Collector has to hear objectors before him before making his report.
Similar. is the case in Govindbhai Gordhanbhai Patel & Ors. vs.
Gulam Abbas Mulla Allibhai & Ors.[(1977) 2 SCR 511]. This
judgment decided that the function of a Collector under Section 63( 1)
proviso of the Bombay Tenancy and Agricultural Lands Act is
administrative and not quasi-judicial. In arriving at this conclusion this       C
Court referred to various earlier decisions of this Court, which had held
that an Advocate General granting or refusing sanction under Section 92
of the Civil Procedure Code was an administrative decision, just as
 granting or withholding sanction to file a suit under Section 55(2) of the
 Muslim Wakfs Act, 1954, is also an administrative decision. An order
                                                                                 D
 made in a reference under Section 10 of the Industrial Disputes Act is
 similarly an administrative order. In each of these three cases no !is is
 decided on merits affecting the rights of the subject, and this is the reason
 why these decisions have been held to be administrative and not quasi-
judicial in nature. One other judgment may be referred to. In N. Misra
 vs. Dr. H.K. Paintal [(1990) 2 SCR 84] this Court held following a              E
 passage in Wade's Administrative Law that a judicial decision is made
 according to law, whereas an administrative decision is made according
 to administrative policy. A quasi-judicial function lying somewhere in
 between is an administrative function which the law requires to be
 exerciser. in some respects as if it were judicial. A quasi-judicial decision
                                                                                 F
 is, therefore, a decision which is subject to a certain measure ofjudicial
 procedure.
       17. We now come to two judgments of this Court under Acts
which deal with expert bodies like SEBI. In PTC India Ltd. vs. Central
Electricity Regulatory Commission [(2010) 4 SCC 603], this Court
had to construe various sections of the Electricity Act, 2003, and ultimately G
came to the conclusion that the Appellate Tribunal for Electricity has no
jurisdiction to decide the validity of Regulations framed under the Central
Electricity Regulatory Commission under Section 178 of the Electricity
 Act, 2003. The validity of the Regulations may, however, be challenged
                                                                                 H
912             SUPREME COURT REPORTS                            [2017] 4 S.C.R.


A by seeking judicial review under Article 226 of the Constitution of India.
              18. ln so stating, a summary of findings is given in paragraph 92
      of the said judgment. Sub-paras (iii), (iv), and (v) are important from our
      point of view, and it is stated as follows :
            "(iii) A regulation under Section 178 is made under the authority
B           of delegated legislation and consequently its validity can be tested
            only in judicial review proceedings before the courts and not by
            way of appeal before the Appellate Tribunal for Electrici~y under
            Section 111 of the said Act.
            (iv) Section 121 of the 2003 Act does not confer power ofjudicial
c           review on the Appellate Tribunal. The words "orders'',
            "instructions" or "directions" in Section 121 do not confer power
            ofjudicial review in the Appellate Tribunal for Electricity. In this
            judgment, we do not wish to analyse the English authorities as we
            find from those authorities that in certain cases in Eng!and the
D           power of judicial review is expressly conferred on the tribunals
            constituted under the Act. In the present 2003 Act, the power of
            judicial review of the validity of the regulations made under Section
             178 is not conferred on the Appellate Tribunal for Electricity.
            (v) Ifa dispute arises in adjudication on interpretation of a regulation
E           made under Section 178, an appeal would certainly lie before the
            Appellate Tribunal under Section 111, however, no appeal to the
            Appellate Tribunal shall lie on the validity of a regulation made
            under Section 178." [para 92]
            19. This judgment was followed in Bharat San char Nigam Ltd.
F vs. Telecom Regulatory Authority of India & Ors. [(2014) 3 SCC
    222]. The Telecom Authority of India Act, 1997 had been amended in
    the year 2000 to take away from the expert body under the Act, viz.
    TRAI, all quasi-judicial functions. Post amendment, the question posed
    before this Court was whether TDSAT, viz. the Appellate Tribunal had
    in exercise ofpowers under Section l 4(b) of the TRAI Act, the jurisdiction
G to entertain a challenge to regulations framed by TRAI under Se-::tion 36
    of the TRAI Act. This Court referred in detail to the PTC India judgment
    (supra) and ultimately held that TD SAT does not have such jurisdiction,
  . regulations being framed by TRAI under Section 36 of the TRAI Act
    being legislative in nature.
H
      NATIONAL SECURITIES DEPOSITORY LTD. v. SEBI                             913
                  [R. F. NARIMAN, J.]

      20. A judgment of this Court dealing with the very Act we are A
dealing with is reported as Clariant International Ltd. & Anr. vs.
Securities & Exchange Board of India [(2004) 8 SCC 524]. In our
view certain observations made in this judgment almost conclude the
matters raised in this appeal. While discussing the effect of the Board
being an expert body, this Court in paragraph 71 stated -
                                                                             B
      "The Board is indisputably an expert body. But when it exercises
      its quasi-judicial functions. its decisions are subject to appeal. The
      Appellate Tribunal is also an expert Tribunal."
      In paragraph 77 this Court further went on to state -
      "The Board exercises its legislative power by making regulations, C
      executive power by administering the regulations framed by it
      and taking action against any entity violating these regulations
      and judicial power by adjudicating disputes in the implementation
      thereof. The only check upon exercise of such wide-ranging
      powers is that it must comply with the Constitution and the Act. D
      In that view of the matter, where an expert Tribunal has been
      constituted, the scrutiny at its end must be held to be of wide
      ill'.port. The Tribunal, another expert body, must, thus, be allowed
      to exercise its own jurisdiction conferred on it by the statute without
      any limitation."
                                                                              E
        21. We have now to determine on a conspectus of the authorities
as to whether Section !ST refers only to quasi-judicial orders, quite apart
from the construction placed upon the Section earlier in this judgment.
SEBI is an expert body created by the Act which, as has been stated
earlier, has administrative, legislative and quasi-judicial functions. Some
of the Sections which deal with the Board's quasi-judicial functions are      F
set out hereinbelow:-
       "11. Functions of Board.
       (4) Without prejudice to the provisions contained in sub-sections
       (1 ), (2), (2A) and (3) and section 1lB, the Board may, by an G
       order, for reasons to be recorded in writing, in the interests of
       investors or securities market, take any of the following measures,
       either pending investigation or inquiry or on completion of such
       investigation or inquiry, namely:-

                                                                              H
914      SUPREME COURT REPORTS                             [2017] 4 S.C.R.


A     (a) suspend the trading of any security in a recognised stock
      exchange;
      (b) restrain persons from accessing the securities market and
      prohibit any person associated with securities market to buy, sell
      or deal in securities;
B     (c) suspend any office-bearer of any stock exchange or self-
      regulatory organisation from holding such position;
      (d) impound and retain the proceeds or securities in respect of
      any transaction which is under investigation;

c     (e) attach, after passing of an order on an application made for
      approval by the Judicial Magistrate of the first class having
      jurisdiction, for a period not exceeding one month, one or more
      bank account or accounts of any intermediary or any person
      associated with the securities market in any manner involved in
      violation of any of the provisions of this Act, or the rules or the
D     regulations made thereunder :
      Provided that only the bank account or accounts or any transaction
      entered therein, so far as it relates to the proceeds actually involved
      in violation ofany of the provisions of this Act, or the rules or the
      regulations made thereunder shall be allowed to be attached;
E
      (f) direct any intermediary or any person associated with the
      securities market in any manner not to dispose of or alienate an
      asset forming part of any transaction which is under investigation :
      Provided that the Board may, without prejudice to the provisions
      contained in sub-section (2) or sub-section (2A), take any of the
F
      measures specified in dause (d) or clause (e) or clause (f), in
      respect of any listed public company or a public company (not
      being intermediaries referred to in Section 12) which intends to
      get its securities listed on any recognised stock exchange where
      the Board has reasonable grounds to believe that such company
G.    has been indulging in insider trading or fraudulent and unfair trade
      practices relating to securities market :
      Provided further that the Board shall, either before or after passing
      such orders, give an opportunity of.hearing to such intermediaries
      or persons concerned.
H
NATIONAL SECURITIES DEPOSITORY LTD. v. SEBI                              915
            [R. F. NARlMAN, J.]

llB. Power to issue directions. Save as otherwise provided in            A
section 11, if after makjng or causing to be made an enquiry, the
Board is satisfied that it is necessary,-
(i) in the interest of investors, or orderly development of securities
market; or
(ii) to prevent the affairs of any intermediary or other persons         B
referred to in section 12 being conducted in a manner detrimental
to the interest of investors or securities market; or
(iii) to se.cure the proper management of any such intermediary
or person, it may issue such directions,-
                                                                         c
(a) to any person or class of persons referred to in section 12, or
associated with the securities market; or
(b) to any company in respect of matters specified in section l lA,
as may be appropriate in the interests of investors in securities
and the securities market.                                               D
Explanation.-For the removal of doubts, it is hereby declared
that the power to issue directions under this section shall indude
and always be deemed to have been included the power to direct
any person, who made profit or averted loss by indulging in any
transaction or activity in contravention of the provisions of this       E
Act or regulations made thereunder, to disgorge an amount
equivalent to the wrongful gain made or loss averted by such
contravention.
llD. Cease and desist proceedings. If the Board finds, after
causing an inquiry to be made, that any person has violated, or is
                                                                          F
likely to violate, any provisions of this Act, or any rules orregulations
made thereunder, it may pass an order requiring such person to
cease and desist from committing or causing such violation:
Provided that the Board shall not pass such order in respect of
any listed public company or a public company (other than the
intermediaries specified under section 12) which intends to get its G
securities listed on any recognised stock exchange unless the
Board has reasonable grounds to believe that such company has
indulged in insider trading or market manipulation.


                                                                         H
916      SUPREME COURT REPORTS                            [2017] 4 S.C.R.


A     12. Registration of stock brokers, sub-brokers. share
      transfer agents, etc.
      (3) The Board may, by order, suspend or cancel a certificate of
      registration in such manner as may be determined by regulations:
      Provided that no order under this sub-section shall be made unless
B     the person concerned has been given a reasonable opportunity of
      being heard.
      15-1. Power to adjudicate. (1) For the purpose of adjudging
      under sections 15A, 15B, 15C, 15D, 15E, 15F, 15G87[,15H, 15HA
      and 15HB, the Board shall appoint any officer not below the rank
c     of a Division Chief to be an adjudicating officer for holding an
      inquiry in the prescribed manner after giving any person concerned
      a reasonable opportunity of being heard for the purpose of imposing
      any penalty.
      (2) While holding an inquiry the adjudicating officer shall have
D     power to summon and enforce the attendance of any person
      acquainted with the facts and circumstances of the case to give
      evidence or to produce any document which in the opinion of the
      adjudicating officer, may be useful for or relevant to the subject-
      matter of the inquiry and if, on such inquiry, he is satisfied that the
E     person has failed to comply with the provisions of any of the
      sections specified in subsection(!), he may impose such penalty
      as he thinks fit in accordance with the provisions of any of those
      sections.
      (3) The Board may call for and examine the record of any
      proceedings under this section and if it considers that the order
 F
      passed by the adjudicating officer is erroneous to the extent it is
      not in the interests of the securities market, it may, after making
      or causing to be made such inquiry as it deems necessary, pass an
      order enhancing the quantum of penalty, if the circumstances of
      the case so justify:
G
      Provided that no such order shall be passed unless the person
      concerned has been given an opportunity of being heard in the
      matter:
      Provided further that nothing contained in this sub-section shall
      be applicable after an expiry of a period of three months from the
H
     NATIONAL SECURITIES DEPOSITORY LTD. v. SEBI                                 917
                 [R. F. NARIMAN, J.]

      date of the order passed by the adjudicating officer or disposal of A
      the appeal under section I ST, whichever is earlier."
      22. Administrative functions of the Board are broadly referable
to Section 11(1) of the Act, which states as follows:
      "11. Functions of Board. (1) Subject to the provisions of this
      Ac.t, it shall be the duty of the Board to protect the interests of B
      investors in securities and to promote the development of, and to
      regulate the securities market, by such measures as it thinks fit."
      23. Legislative functions, namely that of making of Regulations is
referable to Section 30 of the Act which reads as follows:
                                                                                 c
      "30. Power to make regulations. (1) The Board may, by
      notification, make regulations consistent with this Act and the rules
      made thereunder to carry out the purposes of this Act.
      (2) In particular, and without prejudice to the generality of the
      foregoing power, such regulations may provide for all or any of D
      the following matters, namely :-
      (a) the times and places of meetings of the Board and the
      procedure to be followed at such meetings under sub-section (1)
      of section 7 including quorum necessary for the transaction of
      business;
                                                                                 E
      (b) the terms and other conditions of service of officers and
      employees of the Board under sub-section (2) of section 9;
       (c) the matters relating to issue of capital, transfer of secmities
       and other matters incidental thereto and the manner in which such
       matters shall be disclosed by the companies under section 11 A;            F
       (ca) the utilisation of the amount credited under sub-section (5) of
       section 11;
       (cb) the fulfilment of other conditions relating to collective
       investment scheme under subsection (2A) of section 1lAA;
                                                                                  G
       (d) the conditions subject to which certificate of registration is to
       be issued, the amount of fee to be paid for certificate of registration
       and the manner of suspension or cancellation of certificate of
       registration under section 12;
       (da) the terms determined by the Board for settlement of H
918             SUPREME COURT REPORTS                           [2017] 4 S.C.R.


A            proceedings under sub-section (2) and the procedure for
             conducting of settlement proceedings under sub-section (3) of
             section l SJB;
             (db) any other matter which is required to be, or may be, specified
             by regulations or in respect of which provision is to be made by
B            regulations."
         24. It may be stated that both Rules made under Section 29 as
  well as Regulations made under Section 30 have to be placed before
  Parliament under Section 31 of the Act. It is clear on a conspectus of
  the avthorities that it is orders referable to Sections 11 (4), 11 (b ), 11 (d),
c 12(3) and 15-I of the Act, being quasi-judicial orders, and quasi judicial
  orders made under the Rules and Regulations that are the subject matter
  of appeal under Section !ST. Administrative orders such as circulars
  issued under the present case referable to Section 11 (I) of the Act are
  obviously outside the appellate jurisdiction of the Tlibunal for the reasons
  given by us above. Civil Appeal No.186 of 2007 is, therefore, allowed
D and the preliminary objection taken before the Securities Appellate
  Tribunal is sustained. The judgment of the Securities Appellate Tribunal
  is, accordingly, set aside.
         25. In this view of the matter, Civil Appeal No.5173 of2006 being
  a challenge to the merits of the impugned circular, has necessarily to be
E dismissed. We make it clear that liberty is granted to take appropriate
  steps in judicial review proceedings to challenge the aforesaid circular in
  accor:iance with law. Civil Appeal No.5173 of 2006 is disposed of
  accordingly.


      Divya Pandey                                              Appeals disposed of.