SAT Refuses Interim Relief to Embassy Developments; Holds Stay of Insolvency Does Not Undo ASM Inclusion

January 14, 2026 : The Securities Appellate Tribunal (SAT), Mumbai, has declined to grant interim relief to Embassy Developments Limited against the inclusion of its scrip under the Additional Surveillance Measures (ASM) framework, holding that a stay of insolvency proceedings does not restore the company to its pre-admission status.

The Tribunal, comprising Justice P.S. Dinesh Kumar (Presiding Officer), Ms. Meera Swarup (Technical Member), and Dr. Dheeraj Bhatnagar (Technical Member), held that surveillance measures imposed by stock exchanges remain valid despite a stay granted by the appellate insolvency forum.

The appeal was filed challenging notices issued by BSE Limited and National Stock Exchange of India Limited placing the company’s scrip under the ASM framework with effect from 16 December 2025.

Embassy Developments, a listed real estate company, had acted as a corporate guarantor for loans extended by Canara Bank to Sinnar Thermal Power Limited. Following an alleged default of ₹203.03 crore, insolvency proceedings were initiated under Section 7 of the Insolvency and Bankruptcy Code before the National Company Law Tribunal (NCLT), Delhi, which admitted the petition on 9 December 2025. The company challenged this order before the National Company Law Appellate Tribunal (NCLAT), which subsequently stayed the admission order.

Following disclosure of these developments, the stock exchanges placed the company under the ASM framework pursuant to applicable surveillance circulars.

Before SAT, the appellant contended that once the NCLAT stayed the admission order, no corporate insolvency resolution process was pending, rendering the ASM inclusion unjustified. It argued that such surveillance action adversely impacted market perception and caused reputational harm.

Opposing this, the exchanges submitted that a stay merely keeps an order in abeyance and does not nullify its legal consequences. They relied on established jurisprudence distinguishing between a stay and quashing of an order.

The Tribunal examined the relevant circulars governing surveillance of companies undergoing insolvency and noted that such measures are intended to safeguard investors and address market volatility. It further relied on judicial precedents, including Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association and NCLAT rulings, to reiterate that a stay suspends operation but does not erase the existence of the underlying order.

Rejecting the appellant’s arguments, SAT held that the admission of insolvency proceedings continued to have legal consequences despite the stay. It observed that granting the relief sought would effectively amount to treating a stayed order as if it had been quashed, which is impermissible in law.

Accordingly, the Tribunal found no infirmity in the decision of BSE and NSE to place the scrip under the ASM framework and held that the appellant had failed to establish a case for interim relief. The prayer to stay the surveillance action and restore trading status was therefore rejected.

Cause Title: Embassy Developments Limited v. BSE Ltd. & Ors.
Case No.: Appeal No. 1 of 2026
Coram: Justice P.S. Dinesh Kumar, Ms. Meera Swarup, Dr. Dheeraj Bhatnagar