Delhi Stock Exchange Limited vs Sebi

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date of Decision: 24.06.2016

Appeal No. 85 of 2015

Delhi Stock Exchange Limited DSE House, 3/1, Asaf Ali Road, New Delhi- 110 002 ...Appellant

Versus

Securities and Exchange Board of India, SEBI Bhavan, Plot No. C-4A, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 ...Respondent

Mr. Paras Parekh, Advocate with Mr. Dhaval Kothari, Advocate i/b J. Sagar Associate for the Appellant.

Mr. Kumar Desai, Advocate with Mr. Anubhav Ghosh, Advocate i/b The Law Point, for the Respondent.

CORAM: Justice J.P. Devadhar, Presiding Officer Jog Singh, Member Dr. C.K.G. Nair, Member

Per: Justice J.P. Devadhar (Oral)

1.

Appellant is aggrieved by the order passed by the Whole Time

Member ("WTM" for short) of Securities and Exchange Board of India

("SEBI" for short) on November 19, 2014. By the said order, recognition

granted to the appellant to function as Stock Exchange is withdrawn and

the appellant is directed to take all necessary steps consequential to the

said de-recognition.

2. In the appeal the appellant has prayed for the following reliefs:-

a) That this Hon'ble Tribunal be pleased to set aside the Impugned Order (Exhibit 1 hereto) or expunge the Remarks;

2 b) That this Hon'ble Tribunal be pleased to direct the Respondent to allow the Appellant to continue with its voluntary de-recognition in accordance with the Respondent's circular dated May 30, 2012;

c) For such other and further reliefs as the nature and circumstances of the case may require.

3. It is not in dispute that the voluntary de-recognition sought by the

appellant in accordance with SEBI circular dated May 30, 2012 is being

considered by SEBI. However, counsel for SEBI submitted that since the

appellant has failed to furnish fee liability relating to some of the brokers,

there is delay in finalizing the amounts payable by the appellant to SEBI

under the voluntary de-recognition mechanism.

4. Counsel for appellant on instruction states that requisite particulars

sought by SEBI would be furnished within three months from today. The

said statement made by counsel for appellant is accepted.

5. In view of the aforesaid statement, we direct SEBI to complete the

voluntary de-recognition process within a period of five months from

today by determining the quantum amount payable and the time within

which the said payment is to be made.

6. It is made clear that if the appellant fails to pay the amount

quantified by SEBI within the stipulated time under the voluntary

de-recognition mechanism, then SEBI would be entitled to complete the

de-recognition under the impugned order dated November 19, 2014. 3

7. In the impugned order it is held that the present management of the

appellant have failed to take any action against the erstwhile directors of

the appellant for committing various violations. According to the

appellant, the violations committed by the erstwhile directors came to the

notice of the present management only after receipt of show cause notice

of SEBI dated May 10, 2013 and therefore the present management

cannot be held guilty of not taking any action against the old

management.

8. In our opinion, without recording any reason/reasons for rejecting

the contention of the present management of the appellant that they came

to know about the violations committed by the erstwhile management

only after receipt of show cause notice, SEBI, is not justified in holding

that the present management of the appellant has failed to take action

against the erstwhile directors of the appellant. In this view of the matter,

we expunge the remarks made in the impugned order to the extent it is

held that the appellant has failed to take action against the erstwhile

directors of the appellant.

9. Appeal is disposed of in the above terms, with no order as to costs.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Jog Singh Member

Sd/-

Dr. C.K.G. Nair Member 24.06.2016 Prepared & Compared By: PK