The National Securities Depository Ltd. and the Securities and Exchange Board of India have filed an appeal before the Supreme Court, challenging the order of the Securities Appellate Tribunal in the Karvy Stock Broking case.
On Dec. 21, the SAT invalidated two SEBI orders, which restrained some lenders from undoing the pledge on shares held by Karvy Stock Broking Ltd.
The order came on appeals by financial firms that sought to invoke the pledge after Karvy defaulted on the loans extended to it.
The SAT gave permission to Axis Bank Ltd., HDFC Bank Ltd., ICICI Bank Ltd., IndusInd Bank Ltd. and Bajaj Finance Ltd. to use the shares that were pledged in its favour under the rules of the Depositories Act and DP Regulations.
In its order, the tribunal noted that SEBI and NSDL's action to unilaterally transfer the pledged shares to the clients of Karvy was wholly illegal and without jurisdiction.
The order noted that an outstanding amount of Rs 80.64 crore, along with interest, was due to Axis Bank from Karvy, Rs 642.25 crore to ICICI Bank, Rs 344.5 crore to Bajaj Finance, Rs 208.5 crore to HDFC Bank and Rs 159 crore to IndusInd Bank.
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