There is an interview with C. B. Bhave in Mint where he says:
q: SAT has set aside the Sebi order. So, are you relieved?
a: We are naturally relieved because SAT has ruled in our favour. However, at one level, I am feeling very sad that we had to move SAT. As an institution, NSDL, would be reluctant to take any legal recourse against the regulator, but unfortunately, we were left with no option in this matter.
q: How do you react to the ruling that sets aside the disgorgement order?
a: As I have clarified, we would rather have these matters sorted out with Sebi directly. But if the regulator refuses to hear us and passes an ex-parte order, what do we do? We were pushed into a corner and had no choice.
q: Why is NSDL constantly in litigation with Sebi?
a: You are not fair in your assessment. In this case, very strangely, NSDL along with other entities were asked to pay Rs115 crore without even being heard. It is not possible for any entity to accept such a decision. NSDL was not alone. In fact, all the affected entities moved SAT.
q: Are you suggesting that you were asked to pay Rs45 crore without even being heard?
a: Yes, unfortunately that was the case.
q: Why did Sebi do this? You seem to have lost credibility with the regulator.
a: Frankly, we are surprised that principles of natural justice were violated. In fact, in this country, no authority has the right to violate the basic principle of hearing a party before ruling anything adverse to that party. You must be aware that recently even Parliament on a sensitive issue of contempt heard the concerned party before reaching any conclusion.
q: What do you mean? Cant the regulator ask any entity to disgorge?
a: My reading of the SAT order is that the appellate authority has not ruled on Sebis power to disgorge. SAT has stated that disgorgement can occur if the concerned entity is guilty of violation of law. It should have derived profits out of such violation and should have been given an opportunity of being heard before any disgorgement can occur. In this case, these norms were not followed.
q: What about the order to your promoters to revamp management? I believe your appeal was dismissed?
a: The appeal was dismissed as infructuous. The reason being that Sebi contended that its directives to the promoters were not mandatory. The regulator also contended that the directives in the April 2006 order were only observations in aid of the show cause notice (issued last year). Since the contention was that there was no order against NSDL, we had nothing to appeal against.
q: Can a direction of a regulator be non-mandatory?
a: You have to ask this question to Sebi.
q: How do you plan to celebrate the victory?
a: I dont think there are victories against regulators. I would prefer to look at this matter in a more constructive manner. The SAT has laid down some very valuable ground rules and these would serve the capital market well in future. All market intermediaries, including NSDL, should learn from the episode of IPO allotment scam and correct their systems to ensure similar things do not occur again.