SAT dismisses Sanghi SEZ appeal against SEBI recovery certificate in CIS case

The Securities Appellate Tribunal (SAT) on 30 October 2026 dismissed an appeal by Sanghi SEZ Pvt Ltd against a modified SEBI recovery certificate demanding about Rs 19.25 crore in a collective investment scheme case involving Sanghi Plantations Ltd. The tribunal held that Sanghi SEZ had no standing to challenge the certificate, because no SEBI order or recovery proceeding was against it. SAT said it had not examined the merits of SEBI's order or the recovery certificates.

What Happened

According to the order, Sanghi Plantations ran a collective investment scheme, a pooled scheme that collects money from the public, until 1992. As per SEBI's show cause notice, it received Rs 4.17 crore from 27,383 persons and had refunded about Rs 2.1 crore to 13,048 of them by 23 July 2005.

By an order of 17 October 2017, SEBI directed the company to wind up the scheme and repay investors with the returns offered. SEBI's Recovery Officer issued a recovery certificate for Rs 2.07 crore on 3 December 2020. After SEBI announced an e-auction of Sanghi Plantations' properties in September 2024, Sanghi SEZ paid Rs 2.10 crore on 24 September 2024 and then Rs 1.72 crore that SEBI sought as interest, the order records. On 11 September 2025, the Recovery Officer issued a modified certificate demanding Rs 19,24,53,610.

Sanghi SEZ, which described itself as a minority shareholder of Sanghi Plantations, argued that it had paid what SEBI demanded and had been refused a no-dues certificate. SEBI said the appellant was a third party. The tribunal agreed, holding that the payments were dues of Sanghi Plantations and that SEBI had never called on the appellant to pay. It also dismissed an application to add Sanghi Plantations as a party.

What It Means

The tribunal did not rule on whether the higher demand is correct; it said its observations are limited to this appeal. According to a SEBI letter of 1 October 2024 quoted in the order, SEBI directed Sanghi Plantations to settle the returns due to 14,335 investors under the scheme's terms, with interest and other costs until the date of payment, and to file a winding up and repayment report. SAT's order may be appealed to the Supreme Court.

Source: SAT order