SAT Refuses Interim Relief To Embassy Developments Against Surveillance Inclusion Despite Insolvency Stay

The Securities Appellate Tribunal (SAT) has recently refused to grant interim relief to Embassy Developments Limited against the inclusion of its scrip under the Additional Surveillance Measures framework by the stock exchanges, holding that a stay of insolvency proceedings does not restore a company to the position it occupied before admission of an insolvency petition.

Additional Surveillance Measures are trading safeguards imposed by stock exchanges to protect investors from the volatility of a scrip.  

A coram of Presiding Officer Justice P.S. Dinesh Kumar and Technical Members Meera Swarup and Dheeraj Bhatnagar was hearing an appeal filed by Embassy Developments seeking interim relief against the decision of the BSE and NSE to place its scrip under the ASM framework.

"We are of the considered opinion that stay of proceedings by the Hon'ble NCLAT does not restore appellant's position prior to admission of the petition,” the tribunal observed.

Embassy Developments is a listed real estate company. Canara Bank had extended loans to Sinnar Thermal Power Limited, for which Embassy Developments stood as a corporate guarantor. According to the bank, Sinnar defaulted on repayment of dues amounting to Rs. 203.03 crore.

Canara Bank first moved to recover its dues from Sinnar and later approached the National Company Law Tribunal, Delhi, seeking to initiate insolvency proceedings against Embassy Developments under the Insolvency and Bankruptcy Code.

The NCLT admitted the petition in December 2025. Embassy Developments challenged the admission order before the National Company Law Appellate Tribunal, which stayed the NCLT's order. Following disclosure of the NCLT and NCLAT orders, the company's scrip was placed under the Additional Surveillance Measures framework by the stock exchanges, prompting Embassy Developments to approach the Securities Appellate Tribunal.

Opposing the plea, the NSE argued that the stay granted by the NCLAT merely keeps the NCLT's order in abeyance and does not reverse or annul what had already been done. It relied on settled law that a stay does not wipe out the legal consequences flowing from an order that has been passed.

The tribunal noted that the BSE and NSE have issued circulars mandating surveillance measures for companies undergoing insolvency resolution under the Insolvency and Bankruptcy Code. Rejecting the company's contention, the tribunal held that the stay granted by the NCLAT did not undo the effect of the admission order.

Finding “no legal infirmity” in the inclusion of Embassy Developments' scrip under the ASM framework, the Tribunal rejected the company's prayer for an interim order staying the surveillance measures.

For Appellant: Senior Advocate Pesi Modi, Advocates Neville Lashkari, Jigisha Vadodaria and Shreya Bhagnari

For Respondents: Senior Advocate Shiraz Rustomjee, Advocates Manish Chhangani, Sumit Yadav, Abhay Chauhan, Atul Agrawal, Krushi N. Barfiwala, Smriti Singh, Vishal Jathar, Divyanshu Gupta, Rashid Boatwalla and Pranav Kethineni