SAT Grants Temporary Relief to Avadhut Sathe Trading Academy Amid SEBI Order Challenge
The Securities Appellate Tribunal (SAT) has granted limited interim relief to Avadhut Sathe Trading Academy Private Limited (ASTAPL) by allowing the withdrawal of funds for basic operational expenses, even as the academy and its promoters challenge an interim ex-parte order passed by the Securities and Exchange Board of India (SEBI).
The tribunal, after briefly hearing both sides, permitted ASTAPL to withdraw ₹2.25 crore for one month to meet essential expenses required to run the academy. The order comes after the academy sought permission to access frozen bank accounts following SEBI’s December 4 directive, which imposed sweeping restrictions on its operations.
“In view of intervening vacations, we direct that appellant may be permitted to draw ₹2.25 crore for this month,” SAT observed in its order, adding that bank accounts to this extent would be defreezed. The tribunal has scheduled January 9 as the next date of hearing in the matter.
SEBI Order and Appeal Set the Stage for Legal Battle
ASTAPL, along with its promoters Avadhut Sathe and Gauri Avadhut Sathe, has approached SAT challenging SEBI’s interim order that barred them from accessing the securities market. The regulator also restrained the academy from collecting course fees or conducting live trading sessions and directed the impounding of ₹601 crore, which SEBI termed as alleged unlawful gains.
The interim order has effectively stalled the academy’s operations, prompting ASTAPL to seek urgent relief from the appellate tribunal to ensure continuity of basic functions.
While ASTAPL had requested permission to withdraw ₹5.25 crore towards monthly expenses, SEBI opposed the quantum, flagging certain heads of expenditure as non-essential.
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Dispute Over Expense Claims Shapes Interim Relief
During the hearing, SEBI pointed out that a substantial portion of the requested funds was earmarked for activities that could not be classified as basic operational necessities.
According to SEBI’s submission:
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₹2 crore was allocated for advertising expenses
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₹1 crore was earmarked for seminars
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These expenses, SEBI argued, were not essential for basic survival of the academy
Taking note of these objections, SAT allowed a lower amount of ₹2.25 crore, restricting the withdrawal strictly to immediate operational needs for one month.
Senior Counsel Argues SEBI Order Is “Economic Death” for Academy
Appearing on behalf of ASTAPL, Senior Advocate Janak Dwarkadas mounted a strong challenge to SEBI’s interim directions, terming them excessively harsh and legally untenable.
“This is an appeal where the age-old proposition of law that you cannot pass a sentence without a trial has been completely destroyed,” Dwarkadas argued, adding that the ex-parte order amounted to an “economic death” for the enterprise.
He told the tribunal,
“This order directs a party to deposit ₹546 crore in 15 days after freezing the bank account immediately. No hearing, no opportunity.”
Dwarkadas further submitted that the academy was built over years, with Avadhut Sathe investing his personal earnings into a 12.5-acre campus, and that the sudden regulatory action had paralysed the business overnight.
Allegations Based on Limited Complaints, Says Academy
Another key argument raised by ASTAPL was the alleged disproportionality of SEBI’s action relative to the complaints received.
Dwarkadas told SAT that the regulator’s conclusions were drawn from complaints by just 12 students out of a base of 3.5 lakh students, questioning the scale and severity of the interim measures.
The academy also disputed SEBI’s financial findings, stating that the regulator’s conclusions were based on incorrect data interpretations.
SEBI Defends Action, Cites Search, Seizure and Evidence
Countering the arguments, Senior Advocate Chetan Kapadia, appearing for SEBI, maintained that the regulator’s action was neither sudden nor arbitrary.
“This was not out of the blue,” Kapadia said, explaining that SEBI had issued advisories to the academy more than a year ago and conducted search and seizure operations in August 2025.
He added,
“We went to their premises and their houses. Everything has been seized. On the basis of the material seized from the institute, the order has been passed.”
SEBI alleged that ASTAPL was effectively running unregistered investment advisory (IA) and research analyst (RA) services, while presenting itself as a stock market education platform.
Alleged Buy-Sell Calls at the Core of SEBI’s Case
SEBI’s case hinges on its claim that teachers at the academy were providing actionable trading advice during training sessions.
Kapadia told the tribunal,
“Where teachers tell students what to buy and what to sell. How to buy and how to sell.”
SEBI has argued that stock-specific recommendations, including targets, stop-losses and options strategies, were routinely shared during live sessions—activities that require mandatory registration under SEBI regulations.
The regulator’s findings are detailed in a 125-page interim order issued by Whole Time Member Kamlesh Chandra Varshney, which relied on video recordings, complaints and evidence gathered during search-and-seizure operations.
Academy Disputes Findings on Financials and WhatsApp Chats
In its appeal, ASTAPL has challenged SEBI’s conclusions on multiple grounds, including alleged discrepancies in financial data.
The academy contended that while SEBI claimed it incurred losses of nearly ₹1.89 crore during FY25 and FY26, audited accounts reflect profits of approximately ₹1.39 crore. According to the appellants, such inconsistencies undermine the basis of the interim directions.
ASTAPL has also objected to SEBI’s reliance on WhatsApp chats between Avadhut Sathe and certain students. The academy argued that:
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The chats were limited to mentorship batches
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They were not part of the advertised course structure
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They functioned as community interactions, not advisory services
What Lies Ahead as SAT Schedules Next Hearing
With SAT granting only temporary relief, the larger legal battle remains unresolved. The tribunal’s decision to allow limited fund withdrawal ensures short-term operational continuity but does not dilute SEBI’s interim restrictions.
The matter will now come up for further hearing on January 9, when SAT is expected to examine the merits of the appeal in greater detail.
For investors and market participants, the case underscores SEBI’s increasing scrutiny of financial education platforms and the fine line between investor education and regulated advisory services. The outcome could have wider implications for similar entities operating in India’s rapidly growing retail trading ecosystem.
