LexS.E.B.I. versus ALLIANCE FINSTOCK LTD. & ORS. ETC. ETC.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2015] 10 S.C.R. 145 S.E.B.I. v. ALLIANCE FINSTOCK LTD. & ORS. ETC. ETC. (Civil Appeal No. 4493 of 2006) NOVEMBER 03, 2015 [VIKRAMAJIT SEN AND SHIVA KIRTI SINGH, JJ.] . Securities & Exchange Board of India (Stock Brokers A B and Sub-Brokers) Regulations, 1992 - Schepu·le Ill c Paragraph 4 - Stock brokers convert their individual! partnership membership into a corporate entity prior to April 01, 1997 - Entitlement to fee continuity benefit- Held: Stock brokers entitled to the benefits <?f the continuity in terms of paragraph 4 of Schedule Ill of the Regulations - SEB/ en-ed D in denying the stock brokers the benefit of fee continuity. Dismissing the appeals, the Court HELD: 1.1 Para 4 of Schedule Ill to the Securities & Exchange Board of India (Stock Brokers and Sub- E Brokers) Regulations, 1992 was no doubt inserted through an amendment with effect from 21.1.1998 but it does not disclose, either explicitly or even by necessary implication, that although possessing the required F qualifications, a corporate entity formed earlier to 21.1.1998 would not be exempted from payment of fee for the period for which the erstwhile individual or partnership member has already paid the fees. In respect of a legislation of fiscal character such as the instant G provision which relates to fees, it will not be proper or permissible to read into or delete words which do not exist in the provision. The explanation to para 4 introduced with effect from 20.2.2002 takes complete care of any doubt, if at all it could exist, by providing a H 145 146 SUPREME COURT REPORTS [2015] 1 O S.C.R. A deeming fiction that in the case of conversion of entities having individual or partnership membership card into a corporate entity, the corporate entity shall be deemed to be a continuation of the entity in respect of collection of fees from the converted corporate entity. Further, an B embargo has been created against collection of fees again from the converted corporate entity. This explanation is statutory in nature and like para 4 it also does not restrict the benefits of conversion to entities converted on or after any particular date. The C explanation does not talk of making any refund nor does it render the initial levy or assessment of fee as bad but forbids the collection of such fees if the converted corporate entity is entitled to fee continuation benefit in 0 terms of paragraph 4 of Schedule Ill to the Regulations. [Para 18] [160-D-H; 161-A-C] 1.2 The legislative intention is to put an embargo on collection in f_uture, in case the converted corporate entity is found entitled to the benefits of fee continuity. E Such embargo is clearly to operate prospectively even if there existed some kind of liability in the past on account of fees leviable prior to· insertion of paragraph 4 of Schedule Ill to the Regulations. In any cas-e the F rationale in not permitting retrospective operation of laws is only to ensure that subjects are not adversely affected by creation of legal liabilities and obligations for a period already bygone. In the instant case the provisions do not create any obligation or liability. They G only confer benefits by way of fee continuity on account of fees already paid by the earlier entity before its conversion into a new corporate entity. Even if the test of fairness is applied, no exception can be taken to extention of the benefit of fee exemption as provided by H the relevant provision in the Regulations. Since the S.E.B.I. v. ALLIANCE FINSTOCK LTD. 147 policy behind grant of benefits is to encourage A corporatization of individual or partnership members of a stock exchange, the action of extending such benefits without any curb on the basis of date of conversions cannot be held as unfair. [Para 19, 20] [161-D-H; 132-A] K Narayanan v. State of Kamataka 1993 (2) Suppl. SCR 105: 1994 Supp. (1) sec 44; Mohd. Rashid Ahmad v. State ofU.P. 1979 (2) SCR 826: (1979) 1 SCC 596; Mahadeo/a/ Kanodia v. The Administrator General of West Bengal (1960) 3 SCR 578: AIR 1960 SC 936; K.S. Paripooman v. State of Kera/a & Ors. 1994 (3) Suppl. SCR 405: (1994) 5 SCC 593; C. Gupta v. Glaxo- Smithkline Pharmaceuticals Ltd. 2007 (7) SCR 800: (2007) 7 SCC 171; National Council For Teacher Education v. Shri Shyam Shiksha Prashikshan Sansthan 2011 (2) SCR 291: (2011) 3 SCC 238; Mathuram Agrawal v. State of Madhya Pradesh 1999 (4) Suppl. scR 195: (1999) 8 sec
Excerpt shown. Read the full judgment & AI analysis in Lexace.