The Securities Appellate Tribunal (SAT) has directed the market regulator Sebi to re-examine a complaint by an individual seeking refund from an investment firm Osian's Art Fund.
SAT set aside the letter written by Sebi which denied investigation into the complaint on the ground that such matters did not come under its purview.
"We set aside the communication dated January 31, 2011 and direct the Board (Sebi) to re-examine the matter after hearing both the parties (complainant & Sebi) and in the light of the extant instructions on the subject," SAT said in its order dated November 29, 2012.
It further asked Sebi to pass its "order and take a final view in the matter within a period of two months".
SAT order came over the appeal filed by A K Muthuswamy, who had sought Sebi's intervention against Osian's Art Fund, alleging it has not refunded him the dues from an investment scheme.
Sebi had dismissed the complaint by Muthuswamy on the ground that the case did not fall under its purview.
Muthuswamy had invested in Osianís Art Fund's scheme. The company had not refunded the dues within the timeframe as stipulated in the scheme, he claimed.
Following that Muthuswamy had filed a complaint with Sebi on January 18, 2011. But the regulator, had on January 31, 2011 informed him through a written communication that his complaint did not come under its purview.
Pursuant to which, Muthuswamy approached SAT.
Sebi had contended before SAT that it was willing to re-examine the issue but is facing some constraint because of an order passed by the Madras High Court on April 16, 2012 saying that the regulator does not have power to review its own orders.
However SAT noted that the High Court has categorically stated that its order "shall not bar the petitioner to challenge the order passed by Sebi, if so permissible in law, by filing an appeal or taking other remedies to address the grievance ".
Later in the evening, Osian's Art Fund said it does not fall under the regulatory authority of Sebi. "The Osian's Art Fund position from inception is that it or any other art fund does not qualify as a CIS under the SEBI (Collective Investment Scheme) Regulations, 1999.
"In the Private Placement Memorandum, the Risk Factors and Special Considerations clearly stated and disclosed that we are not regulated by or registered with any regulatory authority, such as SEBI, whether in India or abroad," Osian's Art Fund said in a statement.