GPSK CAPITAL PRIVATE LIMITED (FORMERLY KNOWN AS MANTRI FINANCE LIMITED) Vs. THE SECURITIES AND EXCHANGE BOARD OF INDIA

JUDGEMENT

(1.) The instant appeal has been filed under Sec. 15(Z) of the Securities and Exchange Board of India Act, 1992(hereinafter being referred to as the "Act 1992 ") assailing the judgment and order dtd. 9/8/2007 passed by the Securities Appellate Tribunal(hereinafter being referred to as the "Tribunal ") affirming the order of the Securities and Exchange Board of India, Mumbai(hereinafter being referred to as the "Board ") dtd. 7/5/2007 holding that the appellant did not satisfy the conditions of clause (4) of Schedule III of the Securities and Exchange Board of India(Stock Brokers and Sub­Brokers) Regulations, 1992(hereinafter being referred to as the "Regulations ") hence the exemption from payment of fees for the period for which the erstwhile individual Srikant Mantri has paid to the Board cannot be converted to the corporate entity MFL.

(2.) The brief facts of the case culled out are that one Srikant Mantri became a member of the Calcutta Stock Exchange(hereinafter being referred to as the "CSE ") and was granted registration as a stock broker on 30/11/1992. Sometime in the year 1997, he decided to transfer his membership card of CSE in favour of Mantri Finance Ltd.­the appellant herein(hereinafter being referred to as the "Company "). It is not in dispute that the company was registered with the Registrar of Companies, Calcutta on 27/12/1998 under the name and style of Ushagram Properties and Finance Ltd. Later, it changed its name to Mantri Finance Ltd. on 13/11/1992. The Company had started the business of stock broking in 1995 and became a member of NSE and thereafter sought registration with the Board as a stock broker and obtained membership of NSE as a stock broker on 17/10/1995. Thereafter, when the membership card of Srikant Mantri was transferred in the name of the Company, the latter became a member of CSE and was registered as a stock broker of CSE on 1/4/1998.

(3.) After obtaining the membership of CSE on transfer of the card from Srikant Mantri, the appellant Company claimed that it should be exempted from payment of registration fee for the period for which Srikant Mantri had already paid the fees. In other words, it claimed the benefit of exemption of the fee already paid by Srikant Mantri. At the same time, also claimed that all the conditions prescribed under para 4 of Schedule III to the Regulations were satisfied and, therefore, it was entitled to claim exemption.