SAT Grants Interim Relief to Avadhut Sathe Trading Academy

The Securities Appellate Tribunal (SAT) on Friday, December 19, provided interim relief to Avadhut Sathe Trading Academy Pvt Ltd (ASTAPL), allowing it to continue operations after expressing surprise over the Securities and Exchange Board of India’s (SEBI) directive requiring a deposit of ₹546 crore.

A bench headed by Justice P.S. Dinesh Kumar passed an ad-interim order maintaining the status quo and permitted the appellants to operate their bank and demat accounts to ensure the smooth functioning of the academy. The matter has been listed for further hearing on January 9, 2026.

Appeal Against SEBI’s December 4 Order

SAT was hearing an appeal filed by ASTAPL, its founder Avadhut Sathe, and his wife Gouri Sathe challenging SEBI’s December 4 order. The regulator had barred them from trading in securities, collecting course fees, and directed them to deposit ₹546 crore.

SEBI alleged that the academy was providing unregistered investment advisory and research analyst services while operating under the guise of a trading education platform.

Senior advocate Janak Dwarkadas, appearing for the appellants along with senior counsel Gaurav Joshi and C K Legal, criticised SEBI’s action, stating that the regulator had “passed a sentence without a trial” by issuing the order without granting an opportunity of hearing.

He expressed anguish over the ex parte nature of the order, noting that SEBI demanded the deposit within 15 days after freezing all bank and demat accounts.

Complaints From Only 12 Students Cited

Dwarkadas pointed out that while ASTAPL had trained nearly 3.5 lakh students, SEBI’s case relied on complaints from only 12 individuals. Terming SEBI’s approach “trigger-happy,” he cited an earlier SAT judgment and alleged violations of Articles 14, 19 and 21 of the Indian Constitution.

Challenging SEBI’s investigation, Dwarkadas argued that the regulator objected to the academy’s use of real-time market data during training. “How can one teach swimming without entering the water?” he asked, asserting that practical exposure is essential for trading education.

Alleged Violation of Natural Justice

The senior counsel highlighted that while the SEBI Act provides 45 days to file an appeal, ASTAPL was given only 21 days to respond and 15 days to deposit ₹546 crore, even as its accounts were immediately frozen.

“My accounts are frozen, and I am asked to deposit ₹546 crore. Are we living in a democracy or a banana republic?” he remarked while seeking a stay on the order.

Operational Costs and SEBI’s Response

Dwarkadas informed the bench that the academy incurred monthly operational expenses of approximately ₹5.25 crore, making it impossible to function with frozen accounts. SEBI’s counsel countered this by stating that nearly ₹3 crore of the expenses were towards advertisements and seminars.

After hearing both sides, the bench noted that December 19 was the last working day before the tribunal’s vacation. In response, Dwarkadas stated emotionally that while it may be the court’s last day, it felt like the end for him personally.

The tribunal subsequently allowed the appellants to operate their accounts to meet essential monthly expenses. “We are surprised, prima facie, that SEBI seeks a deposit of ₹546 crore after shutting down everything,” the bench observed.

ASTA Welcomes Tribunal’s Decision

In a statement issued after the proceedings, ASTA said the tribunal had permitted it to continue operations. “We have full faith in the judiciary and are optimistic that all our prayers will be accepted at the next hearing. We remain committed to our student community and to nurturing an ecosystem of educated and skilled traders and investors,” the academy said.

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