Securities Appellate Tribunal
Saurashtra Kutch Stock Exchange ... vs Sebi on 13 July, 2007
IN THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Appeal No. 77 of 2007
Date of decision 13.7.2007
Saurashtra Kutch Stock Exchange Limited ... Appellant
Versus
Securities and Exchange Board of India ... Respondent
Mr. J.J. Bhatt Advocate for the Appellant.
Mr. Rafique Dada Senior Counsel with Dr. Poornima Advani Advocate and Ms. Sejal Shah Advocate for the Respondent. Coram : Justice N.K. Sodhi, Presiding Officer Shri. Arun Bhargava, Member Shri. Utpal Bhattacharya, Member Per: Justice N.K. Sodhi, Presiding Officer (Oral) Challenge in this appeal is to the order dated 5.7.2007 passed by the whole time member of the Securities and Exchange Board of India (for short the Board) withdrawing the recognition granted to the appellant as a stock exchange under section 5 of the Securities Contracts (Regulation) Act, 1956 (for short the Act). The primary ground on which the recognition has been withdrawn is that the appellant exchange has not been functioning as such for the last several years and that no trading had taken place on the platform of the exchange. The inspection team sent by the Board also observed that there were several lapses on the part of the exchange in its basic functioning and administration in terms of the 2 various directives and circulars issued by the Board. It has also been found that the exchange has not been complying with the various circulars issued from time to time.
We have heard the learned counsel for the appellant and also the learned senior counsel appearing for the Respondent. The fact that the appellant is a defunct stock exchange for the last more than nine years is admitted. What is being disputed is that the allegations of various acts of omission and commission as levelled against the appellant exchange are not correct and that the appellant had been complying with the various circulars and directions of the Board issued from time to time. Since the appellant exchange has been lying defunct for the last several years, no useful purpose would be served in continuing with the recognition granted to it under section 4 of the Act. A stock exchange is essentially a market place where the buyers and sellers come in large numbers to trade their securities and the exchange provides them a platform where such trading can take place. Since no trading has taken place on the platform of the stock exchange for the last more than nine years as admitted by the appellant in its reply filed before the Board, we are satisfied that the Board was justified in withdrawing the recognition. Since we are upholding the order on this ground, it is not necessary to examine the other contentions raised by the learned counsel for the appellant.
The learned counsel for the appellant has brought to our notice that his clients filed an application on April 4, 2007 seeking renewal of 3 recognition already granted by the Board and his grievance is that the said application is still pending and that no order has been passed by the Board thereon. In case the application is pending the same shall be disposed of expeditiously by the Board in accordance with law.
In the result, the appeal fails and the same is dismissed with no order as to the costs.
Sd/-
Justice N.K. Sodhi Presiding Officer Sd/-
Arun Bhargava Member Sd/-
Utpal Bhattacharya Member 13.7.2007 bbn