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Updated: November 6, 2013 02:47 IST

Bench upholds Sinha’s appointment as SEBI Chairman

J. Venkatesan
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U.K.Sinha, Chairman, SEBI. File Photo: Shashi Ashiwal
The Hindu U.K.Sinha, Chairman, SEBI. File Photo: Shashi Ashiwal

Dismissing Agarwal’s petition, court says no procedure was violated

The Supreme Court has held that no procedure was violated in the appointment of U.K. Sinha as Chairman of the Securities and Exchange Board of India (SEBI).

 A Bench of Justices S.S. Nijjar and Pinaki Chandra Ghose dismissed a writ petition filed by Arun Kumar Agarwal alleging that an illegal procedure was adopted in Mr. Sinha’s appointment.

The Bench said: “The suitability of respondent No.4 [Mr. Sinha] had to be determined by the Search-cum-Selection Committee. We are unable to discern any illegality in the procedure adopted by the Search-cum-Selection Committee. We also find substance in the submission of Mr. Harish Salve senior counsel for Mr. Sinha that the petitioner has made much ado about the non-mention of the pay scale of the petitioner in the Performa sent to the ACC.”

Writing the judgment Justice Nijjar said “The Search-cum-Selection Committee based on the qualification, experience and personal interaction with the short listed candidates, recommended the names of Mr. U.K. Sinha and Mr. Himadri Bhattacharya in that order of merit, for being considered for appointment as Chairman SEBI. The letter mentions that the then Finance Minister proposed the appointment of Mr. U.K. Sinha as Chairman, SEBI, for an initial period of three years from the date he resumes the charge or till he attain the age of 65 years, whichever is earlier.”

Search Committee

The Bench said “We fail to see what role Mr. Sinha had to play in the whole procedure except for accepting the invitation of the Search-cum-Selection Committee for interaction. Even if the pay scale has not been mentioned, it cannot cast a shadow on the integrity of the proceedings held by the Search-cum-Selection Committee. It is also to be noticed that the proposal was sent to the ACC on the express approval of the then Finance Minister. It is noteworthy that the then Finance Minister was Mr. Pranab Mukherjee. He is renowned for his transparency in the performance of his official functions. He is at present the President of India.”

The Bench said: “Mr. Salve, in our opinion, has also rightly submitted that there is nothing surprising in respondent No.4 accepting the post of Chairman, SEBI which carried much lesser emoluments than he enjoyed as Chairman, UTI AMC. It is not abnormal for people of high integrity to make a sacrifice financially to take up the position of honour and service to the nation. We are of the opinion, the acceptance by Mr. Sinha of lesser salary as Chairman of SEBI cannot ipso facto lead to the conclusion that he accepted the position for the purpose of abusing the authority of Chairman, SEBI.”

Referring to the allegation of Counsel Prashant Bhushan that there was a conspiracy the Bench said “It is unbelievable to expect a coordinated overt and covert operation to have been even conceived, let alone successfully executed just to have Mr. U.K. Sinha appointed as Chairman, SEBI. The appointment of Mr. Sinha is strictly in conformity with the procedure prescribed by service rules. The files were sent to the PMO as and when required by rules of business. We find substance in the submission of Mr. Salve that the petitioner has not placed on record any material to establish that any conspiracy was hatched to ensure the selection of respondent No.4. We find no merit in this petition which is accordingly dismissed.”

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