Mumbai: The Securities Appellate Tribunal (SAT) will hear an application filed by an investor group on Wednesday as part of its hearing into a plea filed by Sahara Group challenging a SEBI order asking it to refund the money raised from public.

City-based Investors and Consumer Guidance Society wants to be a party to the plea against the company.

The matter came up before the quasi-judicial body SAT after two Sahara group companies - Sahara India Real Estate Corporation and Sahara Housing Investment Corporation – had appealed against an order by the Securities and Exchange Board (SEBI) to refund the money raised through an issue of optionally fully convertible debentures (OFCDs).

The government too supported SEBI's view in an affidavit filed at the SAT last week.

Hearing on the Sahara plea on Tuesday, SAT presiding officer N K Sodhi said Section 55A of the Companies Act does not curtail the powers vested on SEBI by Sections 11 and 11A of the SEBI Act.

Sahara's counsel Fali S Nariman had argued on Tuesday that the market watchdog had no right on unlisted entities and hence its order was not binding on his clients. Nariman also argued that Section 55A of the Companies Act limited the powers of SEBI to do so.

He also contended that the Sahara companies had stated in their prospectus that they did not intend to list the OFCDs, and hence would not come under SEBI's jurisdiction.

Pointing out that OFCDs are 'hybrid' products and hence do not come under the definition of securities, Nariman questioned the manner in which the Registrar of Companies (RoC) rejected the debenture issue prospectus, after sitting on it for nearly 30 months.

Terming RoC's stand as "irresponsible", he said RoC is not merely a "record keeper", and is legally bound to refuse documents filed by companies if these are not in order.

"You can't come to me after two-and-a-half years and say all my documents are false and illegal," Nariman said.