- (1.) These Appeals arise against the common Judgment of the Securities Appellate Tribunal ('SAT' for brevity) which affirmed the stance of SEBI refusing to grant fee continuity benefits to the Appellants herein. Common question of law and facts arise and for the sake of convenience we shall keep in perspective the factual matrix in Civil Appeal No. 3682 of 2006, in which the arguments in the main have been addressed.
(2.) Premium Capital Market & Investments Pvt. Ltd. was incorporated on 24.6.1992, which on 9.2.1994 changed its name to Premium Capital Market & Investments Ltd (hereinafter 'PCMIL', Appellant No. 3). On an application for Trading Membership of National Stock Exchange of India Ltd. (hereinafter 'NSE') in the Capital Markets Segment by PCMIL, vide letter dated 16.5.1994, NSE sent them an offer of membership subject to certain conditions enclosed in Annexure 'A'. In its letter dated 4.10.1994 SEBI made observations on the Draft Prospectus for Public Offer submitted by PCMIL, including the conditions for NSE membership, namely that the company could not carry on any other activities apart from broking. Pursuant to this observation, the draft prospectus was amended with an undertaking that PCMIL would promote a new company to which it would transfer the NSE membership. Thereafter on 16.12.1994, PCMIL was admitted to the membership of NSE and was registered as a stock broker with SEBI.
(3.) On 27.4.1995 SEBI reaffirming the applicability of Rule 8(1)(f) and 8(3)(f) of Securities Contract (Regulation) Rules, 1957 (hereinafter '1957 Rules') to corporate members, via a letter directed all corporate members to "sever connections with businesses other than securities business forthwith" and requested NSE to report on compliance. In order to comply with this direction, Premium Global Securities Ltd. (later Premium Global Securities Pvt. Ltd., hereinafter 'PGSL', Appellant No. 1) was incorporated on 16.5.1995 for taking over the membership card of PCMIL. On 30.9.1995 PCMIL ceased all its fund-based activities. On 8.8.1996 NSE was informed about the formation of PGSL and an application was made for transfer of NSE membership from PCMIL to PGSL. On 14.3.2000 NSE issued a show-cause notice to PCMIL under Rule 8(1)(f) and (3)(f) of the 1957 Rules in pursuance of a complaint that PCMIL was not allowed to engage in any business other than that of securities. To this PCMIL replied that PCMIL had not transacted any other business and that the last leasing transaction was carried out in September 1995 and that PCMIL was only receiving lease amounts.;