After SEBI had withdrawn the recognition, SKSE had appealed to the Securities Appellate Tribunal (SAT) that functions under the SEBI Act, 1992. The tribunal upheld the SEBI move, following which SKSE approached the Gujarat High Court, which again directed them to move the Supreme Court by way of a statutory appeal.

A bench headed by Justice B N Agarwal issued notices to SEBI and the Finance Ministry on the petition that had upheld SEBI's order withdrawing the recognition. Haresh Raichura, counsel for SKSE later said that the tribunal (SAT) had dismissed the SKSE plea on the ground that no trading had taken place on its platform for several years.

The SKSE was established in 1989. SEBI had withdrawn recognition a day before the due date of renewal—July 9, 2007—on the ground of misappropriation of funds by the management.

Raichura said that at least three members of the board should have taken a decision instead of just one member. But what SEBI did was sub-delegate the power to a single member, he said.

At the time of cancellation, nearly 80 of its 400 registered members were active on the exchange through its subsidiary—SKSE Securities Ltd. It had submitted that SKSE Securities Ltd was set up under the Saurashtra Kutch Stock Exchange Ltd (Corporation and De-mutualisation) Scheme, 2005 and approved by the SEBI. Its purpose was to revive smaller stock exchanges. Almost 25,000 investors are trading through sub-brokers affiliated to it today.

SKSE also argued that the daily turnover of its subsidiary company on the National Stock Exchange and the Bombay Stock Exchange is between Rs 50 crore and 60 crore and that it had demat accounts worth Rs 450 crore in the trading accounts.