- (1.) This appeal under Section 15Z of the Securities and Exchange Board of India Act, 1992 (for brevity, "the SEBI Act") has been preferred by the Securities and Exchange Board of India (for brevity, "the SEBI") to challenge the judgment and order dated 14.08.2006 passed by the learned Securities Appellate Tribunal (hereinafter referred to as "the SAT") in Appeal No.56 of 2004.
(2.) The substantial question of law falling for determination involves interpretation of the term "annual turnover" as it finds mention in the Explanation after paragraph 3 of Schedule III to the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992 (for brevity, "the Regulations"). The aforesaid Explanation reads as follows : "Explanation. " For the purpose of paragraphs 1, 2 and 3, "annual turnover" means the aggregate of the sale and purchase prices of securities received and receivable by the stock broker on his own account as well as on account of his clients in respect of sale and purchase or dealing in securities during any financial year."
(3.) The factual matrix may be noted only in brief. The respondent is a stock broker in the wholesale debt market segment of the National Stock Exchange and deals in debt market securities. The stand of the respondent is that the price of the dealt with securities would not form part of the concerned broker's "annual turnover" and the same cannot be the basis for computing the registration fee of stock brokers like the respondent. This stand is based on a circular of Reserve Bank of India (for brevity, "RBI") dated June 20, 1992, issued with a view to regulate the wholesale debt market. The dispute in respect of quantum of registration fee demanded by the SEBI was brought before the SAT by way of challenge to SEBI's order dated November 28, 2003 directing the respondent to pay Rs.33,51,45,620/- towards principal and Rs.3,78,29,623/- towards interest as on November 30, 2003. As noticed above the SAT allowed the appeal of the respondent and set aside the order passed by SEBI vide its judgment and order under appeal.;