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TMI Blog1996 (5) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... for membership and the exclusion, suspension, expulsion and readmission of members therefrom or thereinto. The Exchange in its extraordinary general body meeting, on 24-8-1992, however, introduced an amendment to its articles of association and increased the maximum number of members from 200 to 300. In another general body meeting dated 8-10-1992, it has fixed entrance fee at Rs. 7,51,000 for new members or as may be decided by the general body. On 1-12-1992 it sent proposal of approval of the Screening Committee constituted by it to SEBI and also a proposal for a written test for approval. SEBI in its turn on 18-2-1993 approved the amendment, authorised it to charge admission fee of Rs. 6 lakhs for new members and directed it to follow the guidelines of the Government of India and SEBI and the provisions of the Securities Contracts (Regulation) Act and the rules framed thereunder. However, on a fresh representation by the Exchange on 4-3-1993 SEBI agreed to its proposal on 23-3-1993 for the admission fee for the new members of Rs. 7,51,000. Further correspondence finally resulted in a letter from SEBI, dated 17-6-1993, approving the procedure for selection of the members by a wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the members in the sense that those who fully qualified and fulfilled all the criteria and performed better than many who failed to qualify in the written test, have been denied the membership whereas persons who failed to qualify in the written test have been admitted as members by the Exchange. Petitioners have alleged that those who have wielded power in the Exchange had filled it with their relatives and nominees as candidates for membership and when they found that such persons were likely to be eliminated on account of their failing to qualify in the written test, they managed to introduce the so-called moderation for benefiting them. The Exchange, however, has maintained that there has been good reasons for moderation and the same is a recognised mode of evaluating merit and to make up or compensate for any disadvantage suffered by the examinees in securing the marks on account of unreasonable and stiff question paper set by the examiner or for having included a question or questions outside the syllabus in any question paper or for such other valid reasons considered good by the concerned University or the academic body. The Exchange has produced on the record the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in other matters connected therewith. A 'stock exchange' is defined under section 2(j) of the said Act to mean - 'any body of individuals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities'. 'Contract' has been defined under the said Act to mean 'a contract for or relating to the purchase or sale of securities'. 'Securities' under section 2(h) included shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate. Any Stock Exchange, section 3 of the Act says, which is desirous of being recognised for the purposes of this Act may make an application in the prescribed manner to the Central Government and every application shall contain such particulars as may be prescribed, and shall be accompanied by a copy of the bye-laws of the stock exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stock exchange and in particular to the governing body of such stock exchange, its constitution and powers and managem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired by the Central Government." 6. The Act also contains the definition of 'Rules' under section 2(g) to mean 'with reference to the rules relating in general to the constitution and management of a stock exchange, to include in the case of a stock exchange which is an incorporated association, its memorandum and articles of association'. Section 8 of the Act provides as follows : "Power of Central Government to direct Rules to be made or to make rules.-(1) Where, after consultation with the governing bodies of stock exchanges generally or with the governing body of any stock exchange in particular, the Central Government is of opinion that it is necessary or expedient so to do, it may, by order in writing together with a statement of the reasons therefor, direct recognised stock exchanges generally or any recognised stock exchange in particular, as the case may be, to make any rules or to amend any rules already made in respect of all or any of the matters specified in sub-section (2) of section 3 within a period of two months from the date of the order. (2) If any recognised stock exchange fails or neglects to comply with any order made under sub-section (1) within the perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of investors in securities and to promote the development of, and to regulate the securities market by such measure as it thinks fit. This Act has made provisions for registration of stock-brokers, sub-brokers, share transfer agents, etc., and it is conceded, the Exchange is one such person registered with SEBI for it is involved in the business of contract for or relating to the purchase or sale of securities. 8. The Central Government has made rules in exercise of the powers conferred by section 30 of the Act which included qualifications for membership of a recognised stock exchange. Rule 8 thereof reads as follows: "8. Qualifications for membership of a recognised stock exchange : The rules relating to admission of members of a stock exchange seeking recognition shall inter alia provide that- (1) No person shall be eligible to be elected as a member if- (a)he is less than 21 years of age; (b)he is not a citizen of India : Provided that the governing body may in suitable cases relax this condition with the prior approval of the Central Government; (c)he has been adjudged bankrupt or a receiving order in bankruptcy has been made against him or he has been proved to be inso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of application for recognition or subsequently admitted as a member shall continue as such if- (a )he ceases to be a citizen of India: Provided that nothing herein shall affect those who are not citizens of India but who were members at the time of such application or were admitted subsequently under the provisions of clause (b) of sub-rule (1) of this rule, subject to their complying with all other requirements of this rule; (b)he is adjudged bankrupt or a receiving order in bankruptcy is made against him or he is proved to be insolvent; (c)he is convicted of an offence involving fraud or dishonesty; (d)and (e) ****** (f)he engages either as principal or employee in any business other than that of securities except as a broker or agent not involving any personal financial liability, provided that- (i)the governing body may, for reasons to be recorded in writing, permit a member to engage himself as principal or employee in any such business, if the member in question ceases to carry on business on the stock exchange either as an individual or as a partner in a firm, (ii)in the case of those members who were under the rules in force at the time of such application permit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r providing merchant banking services, buying and selling securities and other similar activities. (4A) A company as defined in the Companies Act, 1956 (1 of 1956), shall also be eligible to be elected as a member of a Stock Exchange if- (i)such company is formed in compliance with the provisions of section 12 of the said Act; (ii )such company undertakes to comply with such financial require-ments and norms as may be specified by the Securities and Ex-change Board of India for the registration of such company under sub-section (1) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992); (iii). . . . Omitted (iv)the directors of the company are not disqualified for being members of a stock exchange under clause (1) except sub-clause (b) and sub-clause (f) thereof or clause (3) [except sub-clause (a) and sub-clause (f) thereof] and the Director of the company had not held the offices of the Director in any company which had been a member of the stock exchange and had been declared defaulter or expelled by the stock exchange; and (v)not less than two directors of the company are persons who possess a minimum two years' experience- (a)in dealing in se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for eliminating such applicants who appear to possess the minimum educational qualifications, experience or to fulfil other condi-tions, a formula of fixing marks at a uniform level for each criterion except for interview for which 20 marks were reserved, SEBI and the Exchange allotted ten as the minimum to qualify for the interview and the selection including for the written test. Although there is some argument before us that a person possessing the minimum of the wealth making him or her fit to be admitted as a member of the Exchange can be found to be more suitable for the purpose of the business of the Exchange than one who is very rich but not possessed of the requisite calibre, we do not propose to detain ourselves to deal with this and other similar arguments before us except observing that what is contemplated for the purposes of scrutiny and which in some respects appear to go beyond the rules of eligibility or ineligibility for being admitted as a member of the Exchange, cannot be called wholly inadmissible or uncalled for the purposes of scrutiny of the candidates for membership of the Exchange. 11. In Writ Petition No. 6591 of 1994 a challenge is thrown to SEBI to jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge inviting applications and whether in scrutinising the applications or eliminating applicants the Exchange has committed any illegality or violated any of the rights of the applicants. 12. The learned counsel for the Exchange, however, has urged rather forcefully that the Exchange being a body incorporated under the Companies Act, 1956, and so being not 'a state' under article 12 of the Constitution of India, is not amenable to the writ jurisdiction of this Court. The appellant and the writ petitioners who have sought interfer- ence of the Court in the selection of the members by the respondent -Exchange, have raised a private dispute of a sort. The Exchange is neither a statutory body nor an instrumentality or agent of a State, nor has any public duty to perform in admitting members to itself. 13. Part-III of the Constitution of India contains article 12 which defines 'the State' to include the Government and the Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India. What started in 1960s almost as a dissenting voice in a Kerala five Judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l control in the discharge of their functions. What then are the tests to determine whether a Corporation established by statute or incorporated under law is an instrumentality or agency of Government? It is not possible to formulate an all-inclusive or exhaustive test which would adequately answer this question. There is no cut and dried formula which would provide the correct division of Corporations into those which are instrumentalities or agencies of Government and those which are not." (p. 1639) The Supreme Court in this judgment has proceeded to consider various factors such as whether the operation of the Corporation is an important public function, and concluded : "19. It will thus be seen that there are several factors which may have to be considered in determining whether a Corporation is an agency or instrumentality of Government. We have referred to some of these factors and they may be summarised as under : Whether there is any financial assistance given by the State, and if so, what is the magnitude of such assistance whether there is any other form of assistance, given by the State, and if so, whether it is of the usual kind or it is extraordinary, whether there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bs or entering into contracts or otherwise and it cannot act arbitrarily and enter into relationship with any person it likes at its sweet will, but its action must be in conformity with some principle which meets the test of reason and relevance. 15. Dealing with a case of an Engineering College under the management of a society registered under the Jammu and Kashmir Registration of Societies Act, 1898 and the Memorandum thereof and referring parti-cularly to one of the clauses of the memorandum of association which provided for making rules for the conduct of the affairs of the society and to add, to amend, vary or rescind them from time to time with the approval of the Government of Jammu and Kashmir State and the Central Government and such other provisions which appear to subject the Society to the directions and control of the State Government and the Central Government, the Supreme Court in Ajay Hasia v. Khalid Mujid Sehravardi AIR 1981 SC 487 has said : "... Where constitutional fundamentals vital to the maintenance of human rights are at stake, functional realism and not facial cosmetics must be the diagnostic tool, for constitutional law must seek the substance and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral other judgments of the Supreme Court on the subject, but before we refer to a very important aspect of the law with reference to the power of this Court under article 226 and some leading judgments of the Courts, including the Supreme Court, we may point out that 'State' as defined under article 12 alone is not covered by the expansive jurisdiction of the Court under article 226. Article 226 reads : ". . . every High Court shall have power, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs,..." 17. The use of the expression 'any person or authority' and including in the expression 'authority' in appropriate cases 'any Government' indicates the expansion of the power of the Court and that the expression 'all local or other authorities within the territory of India' in article 12 of the Consti-tution is an expression that may be found included in the expression 'authority' under article 226, but is not the same as the 'authority' in the latter provision which is more expansive and wider in reach and purport. 18. In S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n these words : "11. The essence of the attack on the maintainability of the writ petition under article 226 may now be examined. It is argued that the management of the college being a trust registered under the Public Trusts Act is not amenable to the writ jurisdiction of the High Court. The contention in other words is that the trust is a private institution against which no writ of mandamus can be issued. In support of the contention, the counsel relied upon two decisions of this Court: (a) Executive Committee of Vaish Degree College, v. Lakshmi Narain AIR 1976 SC 888 and (b) Deepak Kumar Biswas v. Director of Public Instruction [1987] 2 SCC 252. In the first of the two cases, the respondent institution was a Degree College managed by a registered cooperative society. A suit was filed against the college by the dismissed principal for reinstatement. It was contended that the Executive Committee of the college which was registered under the Cooperative Societies Act and affiliated to the Agra University (and subsequently to Meerut University) was a statutory body. The importance of this contention lies in the fact that in such a case, reinstatement could be ordered if the dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service conditions of the academic staff. When the University takes a decision regarding their pay scales, it will be binding on the management. The service conditions of the academic staff are, therefore, not purely of a private character. It has super-added protection by University decisions creating a legal right-duty relationship between the staff and the management. When there is existence of this relationship, mandamus cannot be refused to the aggrieved party. 15. The law relating to mandamus has made the most spectacular advance. It may be recalled that the remedy by prerogative writs in England started with very limited scope and suffered from many procedural disadvantages. To overcome the difficulties, Lord Gardiner (the Lord Chancellor) in pursuance of section 3(1)(e) of the Law Commission Act, 1965, requested the Law Commission to review the existing remedies for the judicial control of administrative acts and commissions with a view to evolving a simpler and more effective procedure. The Law Commission made their report in March 1976 (Law Com. No. 73) it was implemented by Rules of Court (Order 53) in 1977 and given statutory force in 1981 by section 31 of the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... territories directions, orders or writs, including (writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari) or any of them for the enforcement of any of the rights conferred by Part III and for any other purpose.' ****** 18. The scope of this article has been explained by Subba Rao, J., in Dwarkanath v. Income-tax Officer AIR 1966 SC 81 at pp. 84-85): "This article is couched in comprehensive phraseology and it ex facie confers a wide power on the High Courts to reach injustice wherever it is found. The Constitution designedly used a wide language in describing the nature of the power, the purpose for which and the person or authority against whom it can be exercised. It can issue writs in the nature of prerogative writs as understood in England; but the use of the expression 'nature', for the said expression does 'not equate the writs that can be issued in India with those in England, but only draws an analogy from them. That apart, High Courts can also issue directions, orders or writs other than the prerogative writs. It enables the High Courts to mould the reliefs to meet the peculiar and complicated requirements of this country. Any attempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not imposed by the statute. Commenting on the development of this law, professor De Smith states: 'To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have been imposed by charter, common law, custom or even contract.' (Judicial Review of Administrative Act, 4th Edn. p. 540). We share this view. The judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into water-tight compartment. It should remain flexible to meet the requirements of variable circumstances. Mandamus is a very wide remedy which must be easily available to reach injustice wherever it is found'. Technicalities should not come in the way of granting that relief under Article 226. We, therefore, reject the contention urged for the appellants on the maintainability of the writ petition." (pp 1610-1613) The above judgment has shown, what at a mere glance to the language used in article 226 shows, that the Court has got power throughout the territories in relation to which it exercises jurisdiction to issue to any person or authority including inappropriate cases any Government withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he use of this extraordinary remedy and High Courts will not go beyond those wholesome inhibitions except where the monstrosity of the situation or other exceptional circumstances cry for timely judicial interdict or mandate. The mentor of law is justice and a potent drug should be judiciously administered. Speaking in critical retrospect and portentous prospect, the writ power has, by and large, been the people's sentinel on the qui vive and to cut back on or liquidate that power may cast a period to human rights. We hold that the award here is not beyond the legal reach of article 226, although this power must be kept in severely judicious leash." (p. 429) 21. The Supreme Court has made these observations in a case in which the award of an arbitrator was under challenge. The arbitrator was appointed under a memorandum of agreement under which the man agement as well as the registered Union and two unregistered Unions were parties. One of the contentions before the Court was that an award under section 10A of the Industrial Disputes Act savours of a private arbitration and is not amenable to correction under article 226 of the Constitution and, even if there be jurisdiction, a di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time being in force are clearly incumbent upon such person or court in his or its public character or Corporation in its corporate character." 24. The Court in this judgment has quoted from Halsbury's Laws of England, Third Edition, Vol. 2, at page 84, which is as follows : "The order of mandamus is an order of a most extensive remedial nature, and is, in for a command issuing from the High Court of Justice, directed to any person, corporation or inferior Tribunal, requiring him or them to do some particular thing therein specified which appertains to his or their office and is in the nature of a public duty. Its purpose is to apply defects of justice; and accordingly it will issue, to the end that justice may be done, in all cases where there is a specific legal right and no specific legal remedy for enforcing that right." 25. The above in fact is echoed in Judicial Review of Administrative Action by Professor De Smith, 4th Edition at page 540, in these words : "Mandamus lies to secure the performance of a public duty in the performance of which the applicant has a sufficient legal interest. The applicant must show that he has demanded performance of the duty and that performa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one who applies for it has a sufficient legal interest. Therefore, the condition precedent for the issue of mandamus is that there is one claiming it a legal right to the performance of a legal duty by one against whom it is sought. An order of mandamus, is, in form, a command directed to a person, corporation or inferior Tribunal requiring him or them to do a particular thing therein specified which appertains to his or their office and is in the nature of a public duty. It is, however, not necessary that the person on the authority on whom the statutory duty is imposed need be a public official or an official body. It is, therefore, clear that a writ of mandamus is an extraordinary remedy. It is in form a command directed to a person, corporation or an inferior Tribunal requiring him or them to do a particular thing therein specified which appertains to his or their office and is in the nature of a public duty. So long as the duty that is sought to be performed is in the nature of a public duty, it is not necessary that the person or the authority on which the duty is imposed should be a public official or an official body. It is further necessary that the person claiming a wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a writ petition and a suit; there will be choas. As pointed out by a Constitution Bench of the Supreme Court in T.C. Basappa v. T. Nagappa AIR 1954 SC 440 though the power of the High Court under Art. 226 need not be constricted by the technical rules applicable to these prerogative writs in English law, it is yet necessary to "keep to the broad and fundamental principles that regulate the exercise of jurisdiction in the matter of granting such writs in English law." Similarly, it was pointed out in Dwaraka v. ITO AIR 1966 SC 81 that "Article 226 is couched in comprehensive phraseology and it ex facie confers a wide power on the High Court to reach injustice wherever it is found. A wide language in describing the nature of the power, the purpose for which and the person or authority against whom it can be used, was designedly used by the Constitution. But this does not mean that the High Court can function arbitrarily under this Article. There are some limitations implicit in the Article and the others may be evolved to direct the Article through defined channels." The object behind Art. 226 was to strengthen the then existing judicial system, to make it more effective and not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the technical rules which have hampered the development of the English law. While we do not for a moment doubt that every action of the State or an instrumentality of the State must be informed by reason and that, in appropriate cases actions uninformed by reason may be questioned as arbitrary in proceedings under article 226 or article 32 of the Constitution, we do not construe article 14 as a charter for judicial review of State actions and to call upon the State to account for its actions in its manifold activities by stating reasons for such actions. For example, if the action of the State is political or sovereign in character, the Court will keep away from it, the Court will not debate academic matters or concern itself with the intricacies of trade and commerce. If the action of the State is related to contractual obligation or obligations arising out of the contract, the Court may not ordinarily examine it unless the action has some public law character attached to it. Broadly speaking, the Court will examine actions of State if they pertain to the public law domain and refrain from examining them if they pertain to the private law field. The difficulty will lie in demar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent angle as well. After the decision of the Constitution Bench of this Court in Ajay Hasia v. Khalid Mujib Sehravardi AIR 1981 SC 487 the aided school receiving 95 per cent of expenses by way of grant from the public exchequer and whose employees have received the statutory protection under the 1969 Act, and who is subject to the Regulations made by the Education Department of the Union Territory of Chandigarh as also the appointment of Headmaster to be valid, must be approved by the Director of Public Instruction, would certainly be amenable to the writ jurisdiction of the High Court. The High Court, unfortunately, did not even refer to the decision of the Constitution bench in Ajay Hasia's case rendered on 13-11-1980 while disposing of the writ petition in 1983. In Ajay Hasia's case, Bhagwati, J speaking for the Constitution Bench inter alia observed that the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character. Added to this, the existence of deep and pervasive State control which may afford an indication that the corporation is a St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r may cast a peril to human rights"; (4 )Mandamus, certiorari and prohibition are recognised as public remedies. They are not available to enforce private law rights; (5)The word 'authority' in article 226 of the Constitution of India is not restricted to the same meaning as the words 'other authorities', should receive in the definition of the 'State' in article 12 of the Constitution of India. The former must receive a liberal meaning. The latter is relevant only for the purpose of enforcement of fundamen- tal rights. The High Court's power under article 226 of the Constitu-tion, however, unlike the power of the Supreme Court under article 32 of the Constitution is more pervasive in the sense that it can issue writs for enforcement of fundamental rights as well as non-funda-mental rights. The words 'any person or authority' used in article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on that body. The duty must be judged in the light of positive obl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the case in Mrs. Sejal Rikeen Dalal v. Stock Exchange AIR 1991 Bombay 30, which relates to the Bombay Stock Exchange. In that case their Lordships were of the opinion that the functions of the Stock Exchange were in public interest and for the benefit of the investors. In that context they observed that for safeguarding the public interest, the Court could reasonably exercise its jurisdiction under article 226. We do not propose to go into this technical aspect of the matter any further and for the present we accept that if any public interest is involved and the facts and circumstances so demand a writ could be issued on respondent No. 1." (p. 62) 36. A single Judge of the Karnataka High Court in R. Jagadeesh Kumar v. P. Srinivasan AIR 1995 Kar. 420 has expressed a contra view, it appears, because the facts of the case indicated that the Stock Exchange had taken action to expel a member and the Court was of the opinion that it did not involve performance of any public duty or disregard of any law which imposed upon the Exchange any public duty. A Bench of the Kerala High Court in Satish Nayak v. Cochin Stock Exchange Ltd. AIR 1995 Ker.373 has apparently shown dissent to the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of us (P.S. Mishra, J.) as the Judge of the Madras High Court, speaking for the Court has said : "A Court cannot have any idea of the degree of difficulty existing at the level of average as well as students proficiency or the effect of the handicaps available with the CBSE. Experts alone should be left with the task of judging the difficult factors that influence the overall performance of the students touching the ill-prepared as well as bright students. This would have deterred us from entering into the desirability of awarding of the additional marks aforementioned besides the marks awarded to the students by their respective examiners had we not been put to a measure that prior year pass/fail data is a reasonable index for standardisation marks. How, as stated on behalf of the CBSE the factors or 'any difficulty caused during, answering the questions due to vagueness, incorrectness or capable of different performances, misinterpretation causing lack of reply, consumption of time for other questions or error' reconciled with the prior pass/fail data, prompted us for a further probe and we categorically asked learned counsel for the CBSE to inform the Court as to what were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th a frequency distribution similar to that shown in Table 1(b). This might be the kind of distribution for an assistant examiner with one of the examining boards". After the table of frequency distribution of marks, it is stated, "One cannot have a lenient view or severe marker for objective tests, or one who is inclined to bunch marks, because the marking is completely objective. It is quite possible, however, to have this state of affairs with essay-type examinations and impression assessment, as Hartog and Rhodes et al have found. Such errors may be serious where the marking does not conform to a reasonably specific mark scheme, or where no attempt is made to minimize them by scaling the marks." and it proceeds to add, "Where leniency or severity or differential spreading of the marks is suspected, it is important to scale the marks so that the subjective error of the marker is minimized. The process of scaling or standardization of marks is to ensure that the frequency distributions from various markers conform to an agreed standard, so that each candidate receives a mark which has been effectively corrected for any anomalies in the marking. In team marking the agreed distr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in the case of Umesh Chandra v. Union of India AIR 1985 SC 1351. That was a case in which after the answer books at the written examination were valued, it was decided to add two marks to the marks obtained in each paper by way of moderation to all candidates who had appeared for the examination for selection of officers for being appointed in the Delhi Judicial Service. The Supreme Court in the said judgment has observed as follows : "13. The question for consideration is whether the High Court in the circumstances of this case had the power to add two marks to the marks obtained in each paper by way of moderation. It is no doubt, true that the High Court is entrusted with the duty of conducting the competitive examination under rule 13 of the Rules. It is argued on behalf of the High Court that the power to conduct an examination includes the power to add marks either by way of moderation or by way of grace marks if it feels that it is necessary to do so, and reliance is placed by the High Court on its own past practice, and the practice prevailing in a number of Universities in India, where marks are awarded either as moderation marks or as grace marks. It is tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be 40 per cent in each written paper and 50 per cent in the aggregate. Addition of any marks by way of moderation to the marks obtained in any written paper or to the aggregate of the marks in order to make a candidate eligible to appear in the viva voce test would indirectly amount to an amendment to clause (6) of the Appendix. Such amendment to the Rules can be made under article 234 only by the Lt. Governor (Administrator) after consulting the High Court in that regard. In the instant case the resolving to add two marks to the marks obtained in each answer book by a candidate has virtually amended the Rules by substituting 48 per cent in the place of 50 per cent which is required to be secured in each written paper and 58 per cent in the place of 60 per cent which is required to be secured in the aggregate in the case of candidates not belonging to Scheduled Castes, Tribes and 38 per cent in the place of 40 per cent in each written paper and 48 per cent in the place of 58 per cent in the aggregate in the case of candidates belonging to Scheduled Castes, Tribes. The adverse effect of the moderation on the candidates who had secured the required qualifying marks at the exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to make bad law. In the circumstances, we lean in favour of a strict construction of the Rules and hold that the High Court has no such power under the Rules. We are of the opinion that the list prepared by the High Court after adding the moderation marks is liable to be struck down. The first contention urged on behalf of the petitioners, has, therefore, to be upheld. We, however, make it clear that the error committed by the High Court in this case following its past practice is a bona fide one and is not prompted by any sinister consideration." (p. 1357) 42. Attempt is made before us to distinguish the judgment of the Supreme Court in Umesh Chandra's case (supra) on the ground that there has been no such rule as one for the judicial service with which the Supreme Court was concerned which laid down any condition as to who may be called for the viva voce. What, however, is revealed in the case in hand is that the Exchange had started with a clear representation that those who shall qualify in the written test by obtaining more than ten marks alone shall be called for interview, provided, however, that they also qualified in other criteria. Uniform moderation marks has resulted i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... institutional business for which the institu- tion must enjoy the confidence of the people. The Government of India and SEBI shall do service to the people by seeking a declaration of assets of members of the Stock Exchanges and also information as to the source from which assets have been procured and evolve some method by which profits by the members of the Stock Exchanges and their agents are kept under watch and control so that they do not take advantage of the position of the member of the Exchange and repeat scams at the cost of the fair name of the country. In the applications which we dispose of to-day, we have such statements which show wealth of the petitioners therein which creates doubt about their genuineness. The respondent -Exchange, SEBI and the Central Government thus, in our opinion, shall be taking the blame of permitting such persons to become members, if proper precautionary measures are not introduced by way of rules, bye- laws or even guidelines issued either by SEBI or the Central Government. 45. For the reasons stated above, we hold that respondents 4 to 34 in Writ Petition No. 12250 of 1995 have been wrongly admitted as members of the Exchange. As a cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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