The Supreme Court of India recently upheld the Securities Appellate Tribunal’s (SAT) order in favor of Rajesh Mokashi, former Managing Director of CARE Ratings Ltd, while emphasizing that regulatory authorities must base their findings strictly on evidence on record rather than external enquiry reports.
A Bench comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe heard the appeal filed by the Securities and Exchange Board of India (SEBI) challenging the SAT order dated 27 June 2025. The SAT had set aside SEBI’s order restraining Mokashi from associating with market intermediaries for two years and had imposed costs of ₹5 lakh on SEBI.
Supreme Court Clarifies Evidence Standards
The Court underscored that statutory authorities must rely exclusively on evidence gathered during the official investigation or enquiry. It observed:
“The decisions to be arrived by the Board or the Appellate Tribunal, as the case may be, must be on the basis of evidence that is brought on record. External Enquiry Reports which do not form part of investigation and enquiry by the Board should not be relied on by the statutory authorities i.e. the Board or the Appellate Tribunal.”
Background of the Case
The proceedings arose from allegations that Mokashi, during his tenure as Managing Director of CARE Ratings, had interfered in the credit rating process, particularly concerning DHFL.
In its 27 June 2025 order, the SAT found no evidence of interference and concluded that SEBI had misconstrued the findings of an independent enquiry conducted by Justice B.N. Srikrishna, which had exonerated Mokashi.
Supreme Court Decision
The Supreme Court upheld the SAT’s decision, finding no error of fact or law in the tribunal’s conclusions. The Court reinforced that both SEBI and SAT must base their determinations solely on evidence included in the official investigation or enquiry, and cannot rely on external reports.
However, the Court set aside the SAT’s order imposing ₹5 lakh costs on SEBI, partly allowing the appeal on this limited aspect.
Representation
For Appellant (SEBI): Advocates Amarjit Singh Bedi, Surekha Raman, Shreyash Kumar, Sidharth Nair, Harshit Singh, Yashwant Sanjenbam, KJ John & Co
For Respondent (Rajesh Mokashi): Senior Advocate Sajan Poovayya with Advocates Pulkit Sukhramani, Kunal Katariya, Raksha Agrawal, Samreen Fatima, Seepank Anand, Sidharth Sethi
Case Details
Case Title: Securities and Exchange Board of India vs Rajesh Mokashi
Case Number: C.A. 11757 of 2025.
