TMI Blog2015 (11) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... y bygone. In the present case the provisions do not create any obligation or liability. They only confer benefits by way of fee continuity on account of fees already paid by the earlier entity before its conversion into a new corporate entity. Even if we were to apply the test of fairness, no exception can be taken to extention of the benefit of fee exemption as provided by the relevant provision in the Regulations. Since the policy behind grant of benefits is to encourage corporatization of individual or partnership members of a stock exchange, the action of extending such benefits without any curb on the basis of date of conversions cannot be held as unfair. As noted earlier the SEBI itself extended the benefit to those converting not only from 21.1.1998 but from 1.4.1997. There is nothing in paragraph 4 or in the explanation to support the stand of the SEBI that the benefits must be confined to conversions taking place after a particular date when no such date finds place in the Regulations. As a result, appeals preferred by SEBI are dismissed and the judgments and orders under appeal passed by SAT are upheld. - Civil Appeal No. 4493 of 2006, C. A. No. 4743 of 2006 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by the Stock Broker. 1. Every stock broker shall subject to paragraphs 2 and 3 of this Schedule pay registration fees in the manner set out below : (a) where the annual turnover does not exceed rupees one crore during any financial year, a sum of rupees five thousand for each financial year; (b) where the annual turnover of the stock-broker exceeds rupees one crore during any financial year, a sum of rupees five thousand plus one hundredth of one per cent of the turnover in excess of rupees one crore for each financial year; (bb) (c) after the expiry of five financial years from the date of initial registration as a stock-broker, he shall pay a sum of rupees five thousand for every block of five financial years commencing from the sixth financial year after the date of grant of initial registration to keep his registration in force. 2. Fees referred to in clauses (a) and (b) of paragraph 1 above shall be paid - (a) in respect of the financial year 1992-93 within one month of the commencement of these regulations; (b) in respect of the financial year beginning on the 1st day of April, 1993 and the following financial yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants that the SAT has erred in granting retrospectivity to the provisions of para 4 by granting the benefit of fee continuity even to entities which acquired corporate membership on conversion even prior to 1.4.97. 6. The submission of Mr. C.U. Singh, learned Senior Counsel for the SEBI, are to the following effect:- (1) SEBI cannot make retrospective Regulations. (2) Rules and regulations are generally prospective unless explicitly made retrospective. (3) While bestowing a new benefit, the concerned statutory authority can always choose a cut off date. (4) Unless the cut off date suffers from arbitrariness, there can be no interference. (5) Materials like press statement or letter cannot act as estoppel against the statutory provisions such as the Regulations. 7. In support of the first and second submission it has been pointed out that Section 30 of the SEBI Act vests the Board with the power to make regulations consistent with the Act and the rules made thereunder so as to carry out the purposes of the Act and there is nothing specific in this Section granting power to frame regulations with retrospective effect. To further support this pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of para 4 will be effective from an earlier date, viz., 1.4.1997. By relying upon some case laws such as in the case of National Council For Teacher Education v. Shri Shyam Shiksha Prashikshan Sansthan (2011) 3 SCC 238 it has been contended that appellant is entitled to fix a cut-off date such as 1.4.1997. It has been highlighted that fees are to be computed and paid for every financial year hence introduction of the concession under paragraph 4 w.e.f. beginning of a financial year 1997-1998 is reasonable and serves a purpose. Appellant emphasized the reasons for introducing incentive for corporatisation of individual or partnership entities for carrying out business of brokerage in shares etc. by referring to a speech of the then Finance Minister as well as a Memorandum explaining the provisions in the Finance Bill, 1997. It was argued on behalf of appellant that capital gains exemptions were granted as a one time measure during the concerned financial year to encourage corporatisation of stock brokers cards and hence the action of SEBI in introducing paragraph 4 of Schedule III in the Regulations needs to be construed only as a prospective measure and not as one con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e words levy and collect . The Court went on to hold that these words are not synonymous terms. This distinction was required to be made in that case because certain provisions had been declared illegal only prospectively. In that context it was held that while levying would mean the assessment or charging or imposing of tax, collection would mean the fiscal realization of the tax levied or imposed. It was also pointed out that ordinarily collection of tax is a stage subsequent to the levy of the same. It is not necessary to multiply case laws cited on these points. 12. Respondents referred to a Press Release dated 28.12.2001 publicising the decisions that were taken in the meeting of the SEBI Board on that date. In subpara (e) of para 2 it is disclosed that the SEBI Board considered the representations made by the brokers in the light of relevant materials and decided the following : 2. Broker Fees Amendment to SEBI (Stock Broker and Sub Broker) Regulations a. .. .. .. b. .. .. .. c. .. .. .. d. .. .. .. e. the fee-continuity benefit which was given to all brokers, who had corporatised after January 21, 1998 (the date on w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction is different. If a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as retrospective. In Govt. of India v. Indian Tobacco Assn., (2005) 7 SCC 396 the doctrine of fairness was held to be relevant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation. The same doctrine of fairness, to hold that a statute was retrospective in nature, was applied in Vijay v. State of Maharashtra, (2006) 6 SCC 289. It was held that where a law is enacted for the benefit of community as a whole, even in the absence of a provision the statute may be held to be retrospective in nature. However, we are (sic not) confronted with any such situation here. The Court then concluded that In such cases, retrospectivity is attached to benefit the persons in contradist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. On a careful consideration of rival submissions and keeping in view the relevant case laws relied upon by the parties we have examined analytically and carefully paragraph 4 as well as the explanations thereto in Schedule III of the Regulations. We find that para 4 was no doubt inserted through an amendment with effect from 21.1.1998 but it does not disclose, either explicitly or even by necessary implication, that although possessing the required qualifications, a corporate entity formed earlier to 21.1.1998 would not be exempted from payment of fee for the period for which the erstwhile individual or partnership members has already paid the fees. In respect of a legislation of fiscal character such as the present provision which relates to fees, it will not be proper or permissible to read into or delete words which do not exist in the provision. Further even if there is any scope of doubt, the benefit of such doubt will go to the subject i.e., the stock brokers and not to authority, in this case the SEBI. We further find that the explanation to para 4 introduced with effect from 20.2.2002 takes complete care of any doubt, if at all it could exist, by providing a deeming f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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