B.S.CHAUHAN, J. - (1.) THIS writ petition has been filed for quashing the orders dated 8.10.2003 and 15.10.2003 (Annexures -5 and 7) passed by the respondents imposing a penalty of Rs. 1 lakh and not to hear the appeal till the said amount is deposited.
(2.) FACTS and circumstances giving rise to this case are that the petitioners are registered members and share -brokers of the U.P. Stock Exchange Association Ltd., Kanpur, respondent No. 1, hereinafter called the 'Association'. The Board of the Association stood superseded as per the orders of the Securities and Exchange Board of India, respondent No. 3, hereinafter called the 'SEBI' vide order dated 12.5.2002. Association issued show cause notices dated 18.12.2002 to the petitioners as to why they should not be suspended for unauthorised carry forward transactions. They submitted the replies, which were considered and the matter was referred to the Disciplinary Committee of the Association, respondent No. 2. Petitioners were heard in person. Respondent No. 2 passed order dated 8.10.2003 imposing the penalty of Rs. 1 lakh on each petitioner and directed them to deposit the same by 15.10.2003. Being aggrieved, petitioners preferred appeals before the appellate forum. The same are pending but their stay applications have been rejected vide order dated 15.10.2003 with a remark that appeals shall be entertained only if petitioners deposit the penalty imposed. Preliminary objection has been raised by Shri Manish Goyal and Sanjai Goswami, learned counsel for the respondents, regarding maintainability of the writ petition, contending that respondent No. 1 is merely an Association. It does not perform any public function/duty nor the State has any pervasive control nor it is given financial assistance, fully or partly. It is an association of private businessman and even if the Board superseded by the SEBI appointing Administrator, i.e., it is only a regulatory measure and not a control to the extent that it becomes State or other authority or agency or instrumentality of the State, against which the writ petition may be entertained. It is submitted that it is just like a co -operative society, which has consistently been held to be not amenable to the writ jurisdiction. The Association is not governed by any statutory Rules. The Memorandum of Articles do not have any statutory force and the orders impugned cannot be challenged in the writ jurisdiction.
(3.) ON the contrary, Shri Somesh Khare, learned counsel for the petitioners has submitted that if SEBI has a power to supersede the Board and appoint the Administrator, it is not only a regulatory major but having complete control on the functions and the activities of the Association, though the Association may not be receiving any financial help but it is amenable to writ jurisdiction. The action of the respondents is arbitrary and whimsical and not hearing the appeal of the petitioners till the penalty imposed is deposited, is in violation of the Rules/Bye -laws, as the same do not provide for pre -deposit condition. Therefore, the orders impugned are liable to be quashed.;