LexSECURITIES & EXCHANGE BOARD OF INDIA versus M/S. PREBON YAMANE (I) LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2015] 10 S.C.R. 250
A
SECURITIES.& EXCHANGE BOARD OF INDIA
B·
v.
MIS. PREBON YAMANE (I) LTD.
Civil Appeal No. 7607 of 2005
NOVEMBER 03, 2015
[VIKRAMAJIT SEN AND SHIVA KIRTI SINGH, JJ.]
Securities & Exchange Board of India (Stock Brokers
c and Sub-Brokers) Regulations, 1992: Regulation 1 O;
Schedule Ill clause 4- Fee Continuity benefit- SEBI issue ·
a provisional fee liability statement - Payment under protest
by respondent- SAT directed SEBI to refund the amounts-
Held: Respondent was not an entity as envisaged in clause
D 4 of Schedule Ill - Hence not entitled to fee continuity benefit
-
Securities & Exchange Board of India Act, 1992.
Allowing the appeal, the Court
E
HELD: As per Clause 4 of Schedule Ill, the
Respondent was not an 'entity' as envisaged in the
Regulations as would be entitled to "fee continuity" or
exemption from payment of fees. The Regulation clearly
refers to a newly formed entity through conversion from
F either a sole proprietorship or a partnership to a limited
Company, which alone has been bestowed the benefit
of continuity. Given that the Respondent is barred by the
provisions, the Appellant's internal file notings are of no
consequence and the Appellant is not estopped from
G coming to a contrary conclusion. The Respondent's
argument that the Appellant experienced a change of
heart after the issuance of the Circular dated 28.3.2002
is untenable, because if that was indeed what the
Respondent believed, it would not have written a letter
H requesting fee continuity on 4.2.2002, a date prior to the
250
SECURITIES & EXCHANGE BOARD OF INDIA v. M/S.
251
PREBON YAMANE (I) LTD.
issuance of the circular dated 28.3.2002. Thus, the A
Respondent has failed to prove that it believed it was
granted fee continuity, in light of its letter to the Appellant
requesting the same. Further, it appears that the
Respondent was an entity quite distinct from Oracle, with
the consequence that it would be bound to pay the fee B
in accordance with Schedule Ill, Clause (a) or (b) as the
case may be, and would not be entitled to claim the
advantage of Clause (c). In fact, this is the very
understanding of the Respondent since fees were
deposited by them under Clause (a) in sharp C
contradistinction of Clause (c). [Para 13] [264-C-H]
B.S.E. Brokers Forum vs. SEBI (2001) 3 SCC
482; Sethi Auto Service Station vs. Delhi
Development Authority 2009 (1) SCC 180: 2008
(14) SCR 598 - referred to.
Case Law Reference
(2001) 3 sec 482
2008 (14) SCR 598
referred to.
referred to.
Para 7
Para 8
elVILAPPELLATE JURISDICTION: Civil Appeal No.
7607 of2005
From the Judgment and Order dated 17.08.2005 of the
Securities Appellate Tribunal Mumbai in Appeal No. 338 of
2004.
D
E
F
Chander Uday Singh, Dhaval Mehrotra, Bhargava V.
G
Desai, Saumya Mehrotra, Rishi Gautam for the Appellant.
C. A. Sundaram, Mayank Mishra, Tishampati Sen,
Dheeraj Nair for the Respondent.
The Judgment of the Court was delivered by
H
252
SUPREME COURT REPORTS
[2015) 10 S.C.R.
A
VIKRAMAJIT SEN, J. 1. This Appeal assails the
Judgment dated 17.8.2005 pronounced by the Securities
Appellate Tribunal (hereinafter 'SAT') directing the Appellant
as well as the National Stock Exchange (NSE for brevity) to
continue to grant the Respondent the "fee continuity benefit"
B as was available to them before the NSE decided to permit
segmental surrender of membership to its members. In
response to the fee demanded by the Appellant, namely the
Securities and Exchange Board of India (SEBI for short), the
Respondent has paid, albeit under protest, the principal
C amount of {4,37,20,256/- together with 26,96,590/- being the
interest accrued thereon. The factual matrix is that on
27 .5.1994, Oracle Stocks and Shares Ltd. (hereinafter 'Oracle')
was registered by the NSE as a Trading member in two
0
segments, that is the Wholesale Debt Market (WDM) as well
as in the Equity Market/Capital Marke.t (EM/CM).
Subsequently, on 14.1.1999, Oracle informed the NSE that it
had entered into a 50:50 Joint Venture with Prebon Holdings
B.V. (Prebon Group), namely Prebon Yamane (India) Ltd. (the
E Respondent), but restricted in respect to the WDM segment
alone. NSE advised Oracle to bifurcate the WDM and the
EM/CM segments whereupon Oracle forwarded a proposal
in writing seeking the approval of NSE for the segreg~tion of
its Membership of\/VDM and of the EM/CM segments. By its
F letter dated 11.2 .1999, NSEExcerpt shown. Read the full judgment & AI analysis in Lexace.