LALIT KUMAR MARODIA Vs. UNION OF INDIA UOI

JUDGEMENT

(1.) The brief facts in this matter are as follows : The petitioner is a stockbroker and as such is registered with the Securities and Exchange Board of India (hereinafter referred to as SEBI) and is also a member of the Calcutta Stock Exchange Association Ltd. (hereinafter in short as "the CSE"). He has been asked to pay registration fees sought to be levied by respondent No. 2 on the basis of the provisions of Regulation 10 read with Schedule III of the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to as "the said Regulations"). In this application, the petitioner has challenged this demand for payment of registration fees total of each trade, whether of purchase or sale carried by a stockbroker during the year.

(2.) The sum and substance of the grievance of the petitioner is that, the SEBI as well as the CSE upon giving wrong interpretation and/or meaning of the words "annual turnover" have been realising astronomic and absurd amount of registration fees.

(3.) Mr. S. K. Kapoor, now the Additional Solicitor General, appearing with Mr. Ranjan Deb learned senior advocate appearing for the petitioner submits that the basis for the realisation of registration fee is "annual turnover", as defined in Schedule III to the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992. The petitioner is not challenging the validity of the "annual turnover", being a measure of the registration fees, but the construction and/or interpretation of the words "annual turnover" sought to be given by respondents Nos. 2 and 3. According to the petitioner, the true and plain interpretation of "annual turnover", occurring in Schedule III to the said regulations is the net position of the sale and purchase transaction as on a given date. In other words, annual turnover will be the figure calculated on the basis of the difference between the amount received and receivable by the stockbroker from the stock exchange and the amount paid and payable by the stockbroker as on a given date. The SEBI authorities contrary to the aforesaid clear expression and meaning of turnover are taking aggregate of the sale and purchase value of all transactions during a financial year, adding up the two and calculating registration fees on the basis of that aggregate. The petitioner's interpretation would be clear from the words used in the definition of "received" and "receivable", the words "paid" or "payable" do not occur in the said definition. Hence, there is no scope for including the words "paid" or "payable" by the stockbroker to the exchange in calculating "annual turnover". That would amount to adding words to the Regulations and doing violence to its language, which is not permissible in law. The definition of "annual turnover" is an exhaustive definition and this has to be found within the four corners of the language used therein.