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Magnum Equity Services Ltd. & Ors. v/s Securities & Exchange Board of India

    Appeal No.329/2004

    Decided On, 04 May 2006

    At, SEBI Securities Exchange Board of India Securities Appellate Tribunal

    By, MEMBER
    By, R. N. BHARDWAJ
    By, MEMBER

    Appellants – Represented by Mr. Ravikumar Varanasi, Advocate. Respondent – Represented by Mr. Dipan Merchant, Advocate.

Judgment Text

Per: Justice N. K. Sodhi, Presiding Officer (Oral)

Appellant No.2 was a partnership firm carrying on its business as a stock broker and that firm got corporatised on 29/5/1997. As a corporate entity it claimed benefit of exemption from payment of registration fee for the period for which the erstwhile partnership firm had already paid the fees. This claim was not accepted by the Securities and Exchange Board of India (for short the Board) only on the ground that the appellant got corporatised prior to 21.1.1998, the date on which paragraph 4 of Schedule III to the Securities and Exchange Board of India (Stock Brokers and Sub Brokers) Regulations, 1992 (for short the Regulations) was introduced. It is against this rejection of the claim that the appellant has filed the present appeal.

Similar matters came up before us yesterday and the learned counsel appearing for the Board made a statement that the Board as per its circular dated March 28, 2002 had already clarified that individuals/partnership firms which got corporatised after April 1, 1997 are entitled to the benefit of paragraph 4 in Schedule III of the Regulations provided they satisfy the other requirements. In view of this statement, action of the Board in rejecting the claim of the appellant cannot be sustained. The learned counsel for the Board however, points out that the appellant does not satisfy the other requirements of paragraph 4. If this is so, the Board should consider the claim of the appellant and pass appropriate order in this regard after affording the appellant an opportunity of hearing.

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In view of statement made before us yesterday on behalf of the Board, the present appeal has become infructuous and is disposed of accordingly subject to the aforesaid observations.