Tribunal's appellate power under SEBI law cannot create penalties beyond the statute for registration breaches.

The SEBI Act requires stock brokers and sub-brokers to hold a valid registration certificate before carrying on business, and section 12(3) limits the regulatory consequence of breach to suspension or cancellation in the manner prescribed by regulations. The appellate power under section 15T(4) allows the Tribunal to confirm, modify or set aside the order under appeal, but it does not permit the Tribunal to step outside the statutory framework or impose a penalty not contemplated by the Act or regulations. As a statutory creature, the Tribunal must act within the powers conferred by the enactment and the relevant rules.

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Issues: (i) Whether the Securities Appellate Tribunal had power under the Securities and Exchange Board of India Act, 1992 to modify the penalty imposed by SEBI for violation of the registration requirements applicable to stock brokers and sub-brokers.

Analysis: The statutory scheme under section 12 of the Securities and Exchange Board of India Act, 1992, read with rule 3 of the Securities and Exchange Board of India (Stock Brokers & Sub-Brokers) Rules, 1992, required stock brokers and sub-brokers to hold a valid certificate of registration before carrying on business. Section 12(3) confined the regulatory consequence of contravention to suspension or cancellation of registration in the manner prescribed by regulations. The appellate jurisdiction under section 15T(4) enabled the Tribunal to confirm, modify or set aside the order appealed against, but it did not authorize the Tribunal to travel beyond the statutory field and substitute a penalty not contemplated by the Act or the regulations. The Tribunal, being a creature of statute, could act only within the powers conferred by the enactment and the relevant regulations.

Conclusion: The Tribunal had no authority to modify the statutory penalty outside the framework of the Act and the Regulations, and the SEBI orders restoring the suspension/cancellation consequences were upheld.

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