RAJESH KUMAR MAHESHWARI Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner is a citizen of India and a graduate m commerce and law and has the requisite educational and professional qualifications to become a. member of the Delhi Stock Exchange. He is praying for a writ of ceitiorari to quash the letter dated 5th February, 1987 written by the Government of India to the President of the Delhi Stock Exchange regarding increasing the membership and dilution of share holding of the said Exchange.

(2.) In order to appreciate the matter, it is necessary to set out the background of the case. The Delhi Stock Exchange Association Ltd. was incorporated on 25th Juna, 1947. The existing building was constructed in 1950 out of funds contributed by members. Initially, it was only necessary to hold one share to become a member but sometime in 1963 the eligibility criteria was changed to two shares. On 20th February, 1957, the Securities Contracts (Regulation) Act, 1956 (Act 42 of 1956) came into force. The object of the Act was to prevent undersirable transactions in securities by regulating the business of dealing therein, by prohibiting Operations and by providing for certain other matters connected therewith. The Central Government granted recognition to the Delhi Stock Exchange under secion 4 of the said Act.

(3.) As the volume of work increased, the Delhi Stock Exchange sought the Government of India's permission to dilute every members share-holding from two to one and admit as members authorised assistants etc. who had worked for a long period in the Stock Exchange. The Union of India, however, was anxious that the membership of the Delhi Stock Exchange be increased by induction of members of the public generally.