9911796707
TMI Blog2015 (11) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial facts which have been correctly recorded in the order under appeal, no useful purpose will be served by recollecting the facts in detail once again. It would suffice to note that in terms of policy decision by respondent no.1, the Securities & Exchange Board of India (for brevity, 'the SEBI') reflected in its circulars dated 26.11.1999 and 16.12.1999, the Vadodara Stock Exchange Ltd. incorporated a subsidiary company named as VSE Securities Ltd. on 24.12.1999. It got membership of Bombay Stock Exchange (BSE) as well as registration under the SEBI resulting in commencement of operation on BSE from 29.5.2000 but failed to get membership of National Stock Exchange (NSE) for the specific reason that it was a company limited by guarantee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the transferor company. Post amalgamation, the appellant obtained fresh registration from the SEBI in respect of its operation on BSE in the month of October 2003. On 30.04.2004, the SEBI granted registration for business on NSE on the usual conditions including payment of fees in the manner provided in the Regulations, particularly Regulation 10(1) read with Schedule III of the Regulations. The appellant paid the provisional fee liability but the demand of final fee by the SEBI was challenged before SAT on the ground that the appellant is entitled to fee continuity benefit in terms of circular of the SEBI dated 30.09.2002. The claim of the appellant, as noticed earlier, was rejected by SAT by the order under appeal. 4. The moot questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court in B.S.E. Brokers' Forum v. Securities & Exchange Board of India (2001) 3 SCC 482 which necessitated amendments in the Regulations to implement the recommendations of R.S. Bhatt Committee. In respect of issues raised in the representations received from brokers in their individual and representative capacities, a circular was issued on March 28, 2002. Since some issues remained pending, they were clarified by the circular dated 30.09.2002. Clause 7 of this circular has been pressed into service by the appellant to claim the benefit of fee continuity. It reads as under : "7. Mergers/ Amalgamations Where mergers/ amalgamations are carried out as a result of compulsion of law, fees would not have to be paid afresh by the result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, 2003 being later in time does not apply to the case at hand. 8. On the question as to what is the compulsion of law for amalgamation of the appellant as a transferee company with the earlier subsidiary company, learned counsel for the appellant has contended that in absence of registration from the SEBI, the appellant like any other entity is prevented by law to carry on its business as a broker and to acquire the registration it had to ensure that in place of two subsidiary companies only one should exist otherwise the Vadodara Stock Exchange Ltd. could not get the benefit of membership of one of the major Exchanges, i.e., NSE. Hence the condition imposed by the SEBI to have only one subsidiary for the purpose amounts to compulsion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NSE; there was no compulsion of law and order under appeal requires no interference. 10. We find that the facts of the case have been properly appreciated by SAT for coming to the conclusion that the amalgamation was not on account of any compulsion of law. The compulsion of the appellant was a business compulsion to do business as a broker with NSE. Initially the Vadodara Stock Exchange Ltd. had chosen to form another subsidiary company limited by guarantee ignoring the circular of the SEBI dated 16.12.1999 and also the bye rules of NSE laying down conditions for membership but later it decided to have a subsidiary company which could get registration as a broker with NSE. Such decision was effected through amalgamation. Such a situation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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