This week in Indian law: The Supreme Court Constitution Bench delivered a landmark judgment mandating a three-member committee of the Prime Minister, Leader of the Opposition, and Chief Justice of India for Election Commission appointments. SEBI issued interim orders barring 21 entities in the Axis Mutual Fund front-running investigation. 2 significant legal developments this week across constitutional-rights and securities-market.
Top story
SC Constitution Bench Reforms Election Commission Appointments
Category: constitutional-rights | Date: 2 March 2023 | Source: Supreme Court of India
A five-judge Constitution Bench comprising Justices K.M. Joseph, Ajay Rastogi, Aniruddha Bose, Hrishikesh Roy, and C.T. Ravikumar unanimously held in Anoop Baranwal v. Union of India that the Chief Election Commissioner and Election Commissioners shall be appointed by a committee comprising the Prime Minister, the Leader of the Opposition in the Lok Sabha, and the Chief Justice of India. The Bench ruled that the existing process, where the executive exercised unfettered discretion over appointments, lacked the institutional safeguards necessary for preserving the Election Commission's independence under Article 324. The mechanism operates until Parliament enacts specific legislation.
Why it matters: This is one of the most consequential constitutional decisions on institutional independence in India, establishing that the absence of parliamentary legislation does not authorise the executive to fill the vacuum with an unregulated appointment process.
Read more: Veritect analysis
Regulatory updates
SEBI Bars 21 Entities in Axis Mutual Fund Front-Running Case
Date: 1 March 2023
SEBI issued interim orders barring 21 entities from the securities market in connection with alleged front-running of Axis Mutual Fund trades. The investigation revealed a network of entities that allegedly placed trades ahead of large Axis Mutual Fund orders, generating illicit profits. The interim order directs the impounded amounts to be kept in escrow and bars the entities from buying, selling, or dealing in securities pending final adjudication.
Key point: SEBI's ability to identify and act against front-running networks demonstrates enhanced surveillance capabilities and signals zero tolerance for market manipulation in the mutual fund space.
Also this week
- Adani-Hindenburg proceedings continue — SC expected to constitute an expert committee; SEBI investigation framework being finalised.
- Budget session ongoing — Finance Bill 2023 under discussion; Competition Amendment Bill expected for passage.
- No additional court judgments — SC focused on Constitution Bench matters and Adani hearings.
Looking ahead
- March 14: SC to hear Bhopal gas tragedy curative petitions — decades-long compensation dispute.
- Late March: Finance Bill 2023 expected to be passed; Competition Amendment Bill under consideration.
- March 31: Finance Act 2023 presidential assent; SEBI PAN-Aadhaar linkage deadline for physical securities.
This is the Veritect Weekly Legal Roundup for Week 9 of 2023. For daily updates, visit our legal news page. Subscribe to receive this roundup every Monday morning.
Veritect provides this content for informational purposes and does not constitute legal advice.