India apex court has issued a notice to the central government over Public Interest Litigation (PIL) that challenges the authority of the union Finance minter in nominating two members in the search and selection board for appointment of SEBI chairman and full time members.

The court has not agreed to stay a rule of the Securities and Exchange Board of India (Terms and Conditions of Service of Chairman and Members) Rules, 1992 that allows the finance minister to nominate two members. The order came on the PIL filed by former IPS officer Julio Ribeiro and other members of civil society.

The PIL claimed that the government plans were in contradiction to the SEBI Act. Mr. Ribeiro had earlier challenged the appointment of U K Sinha as SEBI chairman on similar grounds. However, the court had not agreed with the allegations because it observed that the allegations were of personal in nature.

He later filed a new petition only challenging the Finance Minister's power to nominate two members and a bench headed by S S Nijjar issued a notice to the central government over the matter.