16th November 2005




Members are hereby informed that SEBI vide its letter Ref No. MIRSD/Fee Cell/53449/05, dated November 08, 2005 has forwarded an order passed by the Honíble High Court of Gujarat in SCA No. 13946 of 2004 and allied matters in Ramesh Chandra Bansal Vs SEBI and Ors informing that while dismissing the aforesaid petitions filed before the Honíble High Court and vacating the interim relief granted the Honíble High Court of Ahmedabad has made, among others, the following observations.Accordingly, the Exchange has been directed to bring the contents of the Order to the notice of all brokers of the Exchange.


a)      The scheme floated by SEBI viz., SEBI (Interest Liability and Regularisation) Scheme, 2004 floated by SEBI is absolutely true, correct and legal and in consonance with the Act, 1992;

b)      The calculation of registration fees, adopted by SEBI in absence of break-up turnover and in absence of auditorís report before the cut-off date is true, correct, legal, and in consonance with the Act, 1992 and Regulation, 1992;

c)      If any stock broker wants to avail the benefit of concessional rate of registration fees, for those exceptional transactions, the burden is upon such claimant i.e. upon the petitioners. If they fail to prove the existence of such exceptional transactions and if they fail to separate those turnovers from the gross turnover, SEBI can calculate registration fees at 0.01% of gross annual turnover, as per clause (b) of clause (1) of paragraph I of Schedule III to the Regulations, 1992;

d)      The cut-off date is an integral part of the benefit under the Scheme. Cut-off date, in facts of this case is not an arbitrary;

e)      That the conditions attached with the SEBI Scheme, 2004 are reasonable and can not be labelled as capricious or whimsical;

f)       The cut-off date prescribed by SEBI for supply of bifurcated data of turnover is true and correct and there will always be cut-off date in such type of scheme, which gives concession, rebate, or remission or which is in the nature of settlement Scheme or regularization Scheme;

g)      Court can not be more charitable than the law or the Scheme floated from time to time under the law;

h)      It is a composite Scheme and, therefore, concession given and conditions imposed can not be segregated;

i)        It is a matter of Government policy, that what to give as a concession, for, what is to be achieved promptly, without keeping the open ended policy;

j)        Normally in such policy matter, a Court of law will not interfere unless the policy is shown to be contrary to law, inconsistent with the provisions of the Constitution or otherwise arbitrary or unreasonable;

k)      The Scheme is optional. It is in consonance with the Act, 1992 and the Regulations, 1992.


The members are requested to take note of the above and act accordingly.