I. S. ISRANI, J. - (1.) IN these writ petitions filed by the petitioners in the above mentioned writ petitions it has been inter alia claimed that certain conditions in the application form for enrolment as member of M/s. Jaipur Stock Exchange Ltd. non-petitioner No. 1, are arbitrary and illegal. Further grievances of the petitioners are regarding the constitution of Screening Committee and that enrolment of 200 members before the recognition of non-petitioner No. 1 is also illegal and should be quashed.
(2.) JAIPUR Stock Exchange Ltd. is a Company registered under the Indian Companies Act. A press advertisement was issued in the year 1983-84 by which the non-petitioner No. l invited applications initially for enrolment of 200 members but in response to the same 1300 applications were received. In view of large number of applications it is stated by non-petitioner No. 1 that Central Government nominated a Screening Committee which scruitinised all applications and approved 316 applications. The Managing Committee of the non-petitioner No. 1 approved the names of 182 persons in November, 1985 and 18 persons were Directors and in this way the membership of 200 was approved. The contention of Shri Kamlesh Kumar, petitioner and Shri Vimal Choudhary, learned counsel for Shri Padam Kumar is five fold. It is contended that formation of Screening Committee is arbitrary and its member cannot be said to be independent and, therefore, their decision will not be impartial. Secondly it is contended that in the application form for enrolment of membership of non-petitioner No. 1 the condition that it should be recommended either by two members two or Directors is arbitrary and gives up due power in the hands of Members/directors. Thirdly it is contended that the discretion with the Council of Management to reject any application even though approved by Screening Committee is illegal and arbitrary and unjustified. It is contended that the selection of 200 Members/before the recognition was given by Central Government to non-petitioner No. 1 is illegal and such members cannot be permitted to remain members. Lastly, it is contended that the applications invited in 1987 88 have not yet been considered and new applications have been invited. Notice of the petition was given to non-petitioner No. 1 and Shri U. N. Bhandari, learned counsel for the non-petitioner No, 1 has appeared on their behalf. It is also given out by him that Union of India non-petitioner No. 2 has authorised non-petitioner No. 1 to look after their interest also and appear in this Court on their behalf. It is contended by Shri Bhandari that D. B. Civil Writ Petition No. 259/88 was earlier filed by Manju Lata Jain and petitioner Kamlesh Kumar which was disposed of by this Court vide its order dated March 16,1988. It is contended that similar contentions were raised in that petition also and, therefore, the present petitions do not lie. It is also contended that non-petitioner No. 1 does not fall within the ambit of "state" as defined in Article 12 of the Constitution and, therefore, also the petitioners are not entitled to file any writ petition against non-petitioner No. 1. It is further contended that in the earlier writ petition mentioned above this Court has already upheld the Validity of initial membership of 200 persons of non-petitioner No. 1 and that the matter of Screening Committee was also approved, and, therefore, these contentions cannot be raised again by the petitioner in the present petition. It is further contended that even in the earlier application form for membership, the condition of recommendation of the applicant by two Directors/members was thee and since no objection was raised against the same in the earlier writ petition, the petitioner Kamlesh Kumar now cannot challenge the same in this petition. Apart from this it is contended by the learned counsel that there is nothing arbitrary or illegal in keeping such condition as the members of non-petitioner No. 1 have to be carefully selected as they will be dealing with securdities of the public and, therefore, it is only just and reasonable that every person whoever makes an application should not be allowed to be approved and some enquiry regarding his background etc. should be made. It is also contended that Screening Committee includes-representatives of State as well as Central Government and, therefore, cannot be said to consist such members who are not independent. It is also pointed out that those persons who had applied for enrolment as members in the year 1987-88 have been supplied with fresh forms free of cost and if they choose to apply for membership as per the conditions laid down in the new form for application which has been approved by the Cental Government, shall also be considered. Thus, there can be no grievance to such applicants who had filed an application in the year 1987-88 and that the drafts given by them regarding membership etc, were not encashed and have been returned to them. We have heard both the parties and have also gone through the pleadings and the documents on record. As the outset it may be stated that this Court in D. B. Civil Writ Petition No. 259/88 decided on March 16, 1988 held that "since the aforesaid selection of 182 persons for membership was made by non-petitioner No. 1 on the basis of the selection made by the Screening Committee constituted by the Central Government, it cannot be said that non-petitioner No. I acted arbitrarily in the matter of selecting applicants for its membership. Therefore, we find no reason to again go into the question of validity of 182 members and 18 Directors, the selection of which has been also upheld by this Court and this contention has, therefore, no merit.
(3.) IT may be pointed out that Stock Exchanges are recognised by the Central Government in exercise of its powers conferred upon it under section 4 of the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as 'the Act')- The non-petitioner Company submitted an application under Section 3 of the Act for recognition which was granted to it under Section 4 of the Act from January 9, 1989 for a period of one year. A form has been prescribed under the Securities Contracts (Regulation) -Rules, 1957 (hereinafter referred to as 'the Rules'), wherein it is prescribed in Column 6 that it has to be mentioned in the said application the number of members at the time of making the applica-tion. Therefore, the contention of the petitioners that no members could be made before the recognition was granted to the non-petitioner No. 1 has no force. In Column 8 of the form there is mention regarding minimum qualifications and experience before enrolling new members. In column 7 there is mention regarding the limit of the number of members proposed to be enrolled. Under Sec. 5 of the Act it is provided that if the Central Government is of the opinion that the recognition granted to the Stock Exchange, in the interest of trade/public interest, be withdrawn, it can do so after serving notice and giving opportunity of hearing in this respect. Section 6 of the Act empowers the Central Government to make any enquiry in the prescribed manner relating to the affairs of the governing body of the Stock-Exchanges or any member thereof. Thus, in short it can be said that under the Act and the Rules framed there under Central Government has powers to keep complete control over the work of the Stock Exchange which have been recognized in the country. So far as the contention of the petitioners that the condition of the recommendation by 2 Members/directors of non-petitioner No. 1 is illegal and arbitrary. We consider that this has no force as even in many voluntary organisations/clubs it is necessary that the application of a person for enrolment as member has to be recommended by an existing member, so that the management can be reasonably satisfied, regarding antecedents and desirability of having such person as member. The membership of non-petitioner No. 1 will confer certain rights on the member and he will be dealing with securities of public. It is, therefore only necessary that the antecedents and credintials of the applicants should be seen and checked before they are given' membership of non-petitioner No. 1. A reference has also been made by learned counsel for the non-petitioner No. 1 to Madbubhai Amathalal Gandhi vs. Union of India (1), in which similar matter came up for consideration. While considering this question regarding obtaining recommendation/ nomination of the existing members, it was held by the Apex Court that such restrictions were unreasonable having regard to the importance of Stock Exchanges in the country's national economy and having regard to the magnitude of the mischief sought to be remedied in the interest of the general public. We are, therefore, of the considered opinion that there is nothing arbitrary or illegal in haying such condition in the application form. ;