IN THE SECURITIES APPELLATE TRIBUNAL

MUMBAI

 

 Appeal No.199/2004

 

Date of Decision

04.05.2006

 

In the matter of:

 

M. D. Saraf Securities Pvt. Ltd., & Anr.	Appellants – Represented by Mr. Arvind Rathod, Advocate
Versus
1. Securities & Exchange Board of India. 2. Bombay Stock Exchange	Respondent – Represented by Mr. Dipan Merchant, Advocate Respondent – Represented by none.

 

Coram:

 

          Justice N. K. Sodhi, Presiding Officer

          C. Bhattacharya, Member

          R. N. Bhardwaj, Member

 

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

 

 

          This order will dispose of appeal nos.199 and 202 of 2004 in which common questions of law and fact arise.  Learned counsel for the parties are agreed that the decision in appeal no.199/2004 will govern the other appeal as well.  Since arguments were addressed in appeal no.199 the facts have been taken from this appeal.

          The proprietorship concern of M. D. Saraf was corporatised on 11/11/1999 and the only ground on which the appellant has been declined the benefit of  fee continuity in terms of paragraph 4  of Schedule III to Securities and Exchange Board of India (Stock Brokers and Sub Brokers) Regulations, 1992 (for short the Regulations) is that M. D. Saraf did not become a whole time director in the corporate entity.  Information in this regard  was sent by the Bombay Stock Exchange to the Securities and Exchange Board of India (for short the Board).  The Board accepted that statement and declined the benefit of fee continuity.  Admittedly, no hearing was afforded to the appellant.   The  learned counsel for the appellant points out that M. D. Saraf all through has been a whole time director of the company and he has produced Form No.32 issued by the Registrar of Companies showing him as a director.  Since the appellant has not been afforded any opportunity of hearing by the Board we have no option but to set aside the demand notice issued by  it claiming registration fee from the appellant for the period for which it claims exemption in terms of paragraph 4  of Schedule III.  The case is remitted back to the Board for a fresh decision in accordance with law  after affording an opportunity of hearing to the appellant.   The appellant through its counsel is directed to appear before the Board on May 15, 2006 for further proceedings.

 

 

Sd/-

Justice N. K. Sodhi

                                                                       Presiding Officer

Sd/-

C. Bhattacharya

                                      Member

Sd/-

                                      R. N. Bhardwaj

                                                Member

  04 /05/2006.