NATIONAL SECURITIES DEPOSITORY LTD. Vs. SECURITIES &

JUDGEMENT

(1.) WHETHER an appeal lies under section 15T of the Securities and Exchange Board of India Act, 1992 (hereinafter called the Act) against the circular dated November 9, 2005 issued by the Securities and Exchange Board of India (for short the Board) reviewing the dematerialization charges and whether the said circular is in the interest of the investors are the two questions which arise for our consideration in this appeal. The first question arises on a preliminary objection raised by the learned Advocate General who contends that since the impugned circular is administrative in nature and has been issued under section 11(1) of the Act to protect the interests of the investors in the securities and to promote the development of and to regulate the securities market, it is not appealable. The argument is that all circulars and policy decisions taken by the Board are beyond the pale of the appellate jurisdiction of this Tribunal. It is submitted that the aforesaid circular was not issued in exercise of judicial/quasi judicial powers and, therefore, no appeal would lie.

(2.) WE will deal with the preliminary objection first. This objection pertains to the scope and ambit of section 15T of the Act. Since the issue is purely legal, we straightaway refer to the relevant provisions of this section which read as under: "15T. (1) Save as provided in sub -section (2), any person aggrieved, (a) by an order of the Board made, on and after the commencement of the Securities Laws (Second Amendment) Act, 1999, under this Act, or the rules or regulations made thereunder; or (b) by an order made by an adjudicating officer under this Act, may prefer an appeal to a Securities Appellate Tribunal having jurisdiction in the matter. (2) . (3) . (4) (5) .. (6).." (emphasis supplied) A reading of the aforesaid provision leaves no room for doubt that any person who feels aggrieved by "an order" made by the Board may prefer an appeal to the Securities Appellate Tribunal (for short the Tribunal). The word "order" according to Blacks Law Dictionary means "a mandate; precept; command; or direction authoritatively given; rule or regulation". The word "order" in section 15T(1) of the Act is preceded by the word "an". "An", according to the same dictionary is the English indefinite article, equivalent to "one" or "any" which is seldom used to denote plurality. The words "an order" are comprehensive enough to include every order or decision taken by the Board. The word order is not a term of art and it has no fixed legal meaning. It is, thus, clear that every order passed by the Board is appealable to this Tribunal under the aforesaid provision. The learned Advocate General took us through the various provisions of the Act to contend that the Board has the power to pass administrative orders under various provisions particularly under section 11 when it carries out its statutory duties to promote the development of and to regulate the securities market. He strenuously urged that while carrying out such functions the Board takes policy decisions and issues circulars from time to time which are meant to be carried out by the intermediaries of the market with a view to regulate the same. Referring to section 11B of the Act he contended that the Board has the power to issue directions to any person or class of persons referred to in section 12 or associated with the securities market or to any company as it may think appropriate in the interests of investors in securities and the securities market. He also referred to the provisions of Chapter VIA to urge that the Board through its officers has also been given the powers to adjudicate disputes that may arise and, therefore, exercises judicial/quasi judicial power. A reference was also made to the provisions of section 30 of the Act and it was argued that the Board has legislative powers as well when it frames regulations thereunder. After taking us through the scheme of the Act the learned Advocate General strenuously contended that an appeal would lie only against those orders which are passed by the Board in the exercise of its judicial/quasi judicial functions and not when it exercises administrative powers and takes policy decisions to regulate the securities market and the intermediaries or when it exercises its legislative functions while framing the regulations. He referred to the provisions of sections 11(4), 11 -B, 11 -D, 12(3) and sections 15 -A to 15 -HB and urged that these are some of the sections under which the Board exercises its judicial power and that the orders passed thereunder would be amenable to the appellate jurisdiction of the Tribunal. He further contended that the Board and its officers also exercise judicial power while issuing directions under various regulations framed by the Board and the exercise of that power too, would be subject to the appellate jurisdiction of the Tribunal. In other words, the learned Advocate General wants the provisions of section 15T of the Act to be read in a restrictive manner so as to limit the right of appeal only to those orders made by the Board in the exercise of its judicial/quasi judicial functions. Another argument of the learned Advocate General is that, in any case, the impugned circular issued by the Board is legislative in character and, therefore, not appealable. He e H placed strong reliance on the judgement of the Supreme Court in Union of India vs Cynamide India Ltd. AIR 1987 SC1802 to contend that the impugned circular was legislative in nature, and, therefore, beyond the appellate jurisdiction of the Tribunal.

(3.) WHILE we agree with the learned Advocate General that the Act provides for integration of power in the Board as an expert body in as much as it performs legislative, executive and judicial/quasi judicial functions, we cannot countenance the plea that the right of appeal under section 15T of the Act is limited only to judicial/quasi judicial orders. The right of appeal is a statutory right and it has necessarily to be governed by the provisions of the Statute which creates it. It is open to the legislature to restrict that right against a specific class of orders or the said right may be given to a certain class of persons or the said right could be restricted or limited in any other manner as the legislature may deem necessary. The legislature could also make such a right conditional and in that event an appeal would lie only on the fulfillment of such conditions as the legislature may impose. In the instant case, the nature and extent of the appeal will have to be determined and controlled by the language used in section 15T of the Act. The legislature was conscious that the Board was an expert body in which vests executive, legislative and judicial/quasi judicial powers and when it made a provision for an appeal in section 15T of the Act it did not limit that right only to orders passed by the Board or its officers in exercise of judicial/quasi judicial powers. There are no such words of limitation in section 15T and we cannot read such words in the statute which are not there. The language used in section 15T is of widest amplitude and makes every order passed by the Board appealable, whether it be in exercise of its administrative, legislative or judicial/quasi judicial powers. Had the intention of Parliament been to limit the right of appeal only to judicial/quasi judicial orders, then it would have said so in clear terms in section 15T of the Act and would not have made every order appealable because it was aware that the Board exercises executive, legislative and judicial/quasi judicial powers. It is pertinent to mention that Parliament has limited the right of appeal where it wanted to. When it provided an appeal to the Supreme Court under section 15Z of the Act against an order of the Tribunal, it has been restricted to a question of law.