LexPREMIUM GLOBAL SECURITIES PVT. LTD. & ORS. versus SECURITIES & EXCHANGE BOARD OF INDIA & ANR.
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• [2015] 14 S.C.R. 201
PREMIUM GLOBAL SECURITIES PVT. LTD. & ORS.
A
v.
SECURITIES & EXCHANGE BOARD OF INDIA & ANR.
(Civil Appeal No. 3682 of 2006)
DECEMBER 09, 2015
[VIKRAMAJIT SEN AND SHIVA KIRTI SINGH, JJ.]
B
Securities Contract (Regulation) Rules, 1957: rr.8(1 )(f),
8(3)(f)- Fee Continuity Benefit- Circular dated 27.09.2002 c
contemplated that transfer of membership to group company/
100% subsidiary company would not attract any fresh
payment of registration fees - In view of bar under r.8(1 )(f),
transfer of membership to appellant company- SEBI refused
to grant fee continuity benefits to the appelfant - Whether D
there was any compulsion of law to transfer brokerage
business and whether appellant can be granted benefit of
fee continuity- Held: The restriction imposed under-circular
was to not have fund-based and trading activities together
under one roof- Thus, any action taken by the appellants to E
comply with restriction of not participating in both the activities
simultaneously would be under compulsion of law -
Appellants entitled to fee continuity benefits - Securities and
Exchange Board of India Act, 1992- s. 11 (2).
F
Disposing of the appeals, the Court
HELD: 1. It is beyond cavil that SEBI, as a trade
regulator in the securities market, is entitled to charge
registration fees for enabling it to carry out its functions
as stipulated in Section 11(2) of the SEBI Act, 1992. G
However, it appears at present that SEBI has pounced
at the opportunity to charge fresh registration fees
choosing to ignore the exemption$ assured by it. [Para
12] [209-D·E]
201
H
•
202
SUPREME COURT REPORTS
[2015) 14 S.C.R.
A
2. The restriction imposed was to not have fund·
based and trading activities together under one roof.
Thus any action taken by the Appellants to comply with ·
restriction of not participating in both the activities
simultaneously would be under compulsion of law. The
B compulsion of law under the 1957 Rules is directed
towards the desired end and not concerned with the
means, and it would be wrong for us to ascribe
otherwise. [Para 13] [209-F, G·H]
c
D
SEBl.v. BSE Brokers' Forum (2001) 3 SCC 482;
Ratnabali Capital Markets Ltd. v. Securities
Exchange Board of India 2007 (11) SCA 629 :
(2008) 1 sec 439 - referred to.
Case Law Reference
c2001 > 3 sec 482
2007 (11) SCA 629
referred to
referred to
Para 8
Para 9
E
CIVIL.APPELLATE JURISDICTION: Civil Appeal No.
3682 of 2006.
F
From the Judgment and Order dated 15.06.2006 of the
Securities Appellate Tribunal, Bombay in Appeal N.o. 192 of
2004
C.A. No. 3686 of 2006
C. A. No. 231 o of 2007
C. A. No. 6394 of 2009.
WITH
G
S. Ganesh, Sr. Adv., Sameer Parekh, Ms. Rukhmini
H
Bobde, Ms. Nandita Bajpai, Ms. Aakanksha Nehra,
M/s. Parekh & Co., Anand Sukumar, S. Sukumaran, Bhupesh
Kumar Pathak, Ms .. Meera Mathur, Ashok Mathur for the
Appellants.
PREMIUM GLOBAL SECURITIES PVT. LTD. v.
203
. SECURITIES & EXCHANGE BOARD OF INDIA
C. U. Singh, Sr. Adv., Bhargava V. Desai, Ms. S. A
Mehrotra, Dhawal Mehrotra, Rishi Gautam for the
Respondents.
The Judgment of the Court was delivered by
VIKRAMAJIT SEN, J.
CIVIL APPEAL NO. 3682 OF 2006, CIVIL APPEAL
NO. 3686 OF 2006 AND CIVIL APPEAL NO. 6394 OF 2009
B
1. These Appeals arise against the common Judgment C
of the Securities Appellate Tribunal ('SAT' for brevity) which
affirmed the stance of SEBI refusing to grant fee continuity
. benefits to the Appellants herein. Common question of law and
facts arise and for the sake of convenience we shall keep in
perspective the factual matrix in Civil Appeal No. 3682 of 2006; D
in which the arguments in the main have been addresse.d.
2. Premium Capital Market & Investments Pvt. Ltd. was
incorporated on 24.6.1992, which on 9.2.1994 changed its
name to Premium Capital Market & Investments Ltd
(hereinafter 'PCMIL', Appellant No. 3). On an application for E
Trading Membership of National Stock Exchange of India Ltd.
(hereinafter 'NSE') in the Capital Markets Segment by PCMIL,
vide letter dated 16.5.1994, NSE sent them an offer of
membership subject to certain conditions enclosed in Annexure F
'A'. In its letter dated 4.10.1994 SEBI made observations on
the Draft Prospectus for Public Offer submitted by PCMIL,
including the conditions for NSE membership, namely that the
company could not carry on any other activities apart from
broking. Pursuant to this observation, the draft prospectus was G
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