CLAT PG Current Affairs — 13 July 2026

The Supreme Court is hearing SEBI's plea challenging a SAT order that relieved four managers and a company secretary of Sahara India Commercial Corporation (SICCL) from liability in the OFCD case. SAT's March 9 ruling upheld SEBI's action against SICCL and its directors but exempted employee-level officials. SICCL had raised Rs 14,106 crore from 1.98 crore investors via Optionally Fully Convertible Debentures between 1998 and 2008. The original SEBI order directing refund dates to October 2018.

The SICCL OFCD case is one of India's most consequential securities law disputes, sitting at the intersection of investor protection, SEBI's jurisdictional reach, and corporate liability principles. At its core, the dispute asks: when a company issues debentures to nearly two crore people, can it still claim the issuance was a private placement, thereby escaping SEBI oversight?

SAT's March 2026 ruling resolved part of this cleanly — a Rs 14,106 crore mobilisation from 1.98 crore subscribers cannot qualify as a private placement under any interpretive stretch. OFCDs, being convertible into equity, are 'securities' under the Securities Contracts (Regulation) Act, 1956, and any public offer of securities must comply with SEBI's disclosure and investor protection norms.

The contested SAT relief to managers raises a deeper corporate law question: can employees who execute directors' decisions — including signing a prospectus under a power of attorney — be insulated from regulatory liability? SEBI argues the 'principal-agent' logic SAT used creates a dangerous precedent, allowing intermediaries and signatories to escape enforcement. For SEBI Grade A aspirants, this tests knowledge of SEBI's enforcement powers under SEBI Act Section 11B, the definition of 'public offer,' and the SAT appellate hierarchy. For CLAT PG, the agency law dimension — whether an agent acting under PoA absolves the agent of independent liability — is directly testable.

The Karnataka High Court, via a Division Bench of Chief Justice Vibhu Bakhru and Justice CM Poonacha, upheld the Karnataka Civil Courts (Amendment) Act, 2023, and the Karnataka High Court (Amendment) Act, 2023. The court held that forum of appeal is procedural law, making amendments retrospective by default. It applied the doctrine of reading down to confine retrospective effect to pending proceedings only, protecting concluded judgments. The Bengaluru City Civil Court's distinct cadre structure justified separate appellate classification under Article 14.

This judgment sits at a crucial intersection of constitutional law, procedural versus substantive rights, and legislative competence — areas CLAT PG examiners love precisely because the distinctions are counterintuitive.

The core question was: when a legislature changes which court hears an appeal, is that a substantive right (which cannot be taken away retrospectively) or a procedural matter (which can apply to pending cases)? The Karnataka High Court firmly placed forum of appeal in the procedural category, following settled Supreme Court jurisprudence. This matters because procedural law is presumed to apply retrospectively unless the legislature says otherwise — so transferring pending Regular First Appeals from the High Court to District Courts was valid.

The petitioners' strongest argument was that a litigant's right to appeal to a specific forum 'vests' on the date of suit filing. The court rejected this, distinguishing between the right to appeal (substantive, cannot be extinguished) and the forum through which that right is exercised (procedural, subject to legislative change).

The doctrine of reading down was deployed cleverly: rather than strike down the retrospective clause in Section 4 (which could have reopened concluded judgments), the court read it narrowly to cover only pending appeals — preserving legislative intent while preventing manifest injustice. This exemplifies purposive interpretation and harmonious construction working together, two tools CLAT PG passages consistently test.