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TMI Blog1994 (1) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of Delhi Stock Exchange did not constitute a homogeneous group and condition in regard to higher deposit from those belonging to first category as compared to those belonging to second category was constitutionally valid - Held, yes - Whether as selection of members of Expert Committee was purely by members of Board of Directors, it would be wrong to say that constitution of Expert Selection Committee was arbitrary - Held, yes - Whether selection of members of Stock Exchange could be set aside merely on ground that a large number of chartered accountants were selected and merely because some of them had qualified only recently - Held, no - Whether Supreme Court can issue a mandate for enhancing number of members of stock exchange - Held, no - CIVIL APPEAL NOS. 4711 -12 OF 1990 AND WRIT PETITION (C) NO. 878 OF 1989 - - - Dated:- 14-1-1994 - A.M. AHMADI AND M.M. PUNCHHI, JJ. Ashwani Kumar, H.N. Salve, V.C. Mahajan, R.P. Bhatt, R.K. Jain, Sandeep Bhuraria, P.N. Gupta, Ms. Smitha Inna, S.S. Shroff, Sudarsh Menon, Manoj Swarup, D.N. Mishra, N.P.S. Panwar, S.N. Bhat, Rajiv Sahai Endlaw, Navin Prakash, K.B. Rohtagi, S. Ganesh, Ms. Lata Krishnamurti, Ashok Mathur, Prem Pd. J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount was to be utilised by the Delhi Stock Exchange for making provision to improve the services and providing a better infrastructure. The selection of 250 members was to be made on an objective criteria taking into consider- ation the experience, professional qualifications and other relevant factors through an Expert Committee to be constituted for that purpose. The issue of shares through dilution of existing members was, however, restricted to authorised assistants of members of the Delhi Stock Exchange, daughters/sons or direct dependents of the members. The Delhi Stock Exchange was directed to take immediate steps to increase the membership on the aforesaid terms and conditions. By a subsequent letter dated 12-2-1987, the Central Government modified the terms in regard to the deposit money by making it transferable. While this correspondence was in progress, a writ petition was filed by one Mr. Saigal, being Civil Writ Petition No. 12223 of 1985, in which certain interim orders were made. It is, however, not necessary to refer to the same because after the Central Government's approval conveyed by the letter of 5-2-1987, that writ petition became infructuous and was so dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Expert Committee did not select him. It may here be mentioned that the Expert Committee con- sisted of nine members but, according to the petitioner/appellant, he was interviewed on 16-1-1988, by ( i ) Mr. Prem Chand Jain, (ii ) Mr. Paul Joseph, ( iii ) Mr. R.N. Bansal, and ( iv ) Mr. R.K. Pandey. Mr. Prem Chand Jain was the President of the Expert Committee, Mr. Pandey was the executive director of the Delhi Stock Exchange whereas the other two members were the nominees of the Central Government on the board of directors of the Delhi Stock Exchange. The case put up by the petitioner/appellant in the High Court was that he had answered all the questions correctly and had denied the averment that he was not able to answer questions put to ascertain his knowledge in current laws affecting capital issues, norms for debentures, protection of shareholders, guidelines for bonus issues, etc., etc., which knowledge was essential for the effective function-ing of the stock exchange and control of capital issues. A bald contention was raised in the petition that he was put only one question, namely, 'What are specified shares' to which he had given an appropriate and correct answe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Expert Committee had wrongly rejected his application for being admitted to the membership of the stock exchange and he has also prayed that the total membership should be increased to 500 and a fresh advertisement inviting applica- tions from members of the public should be issued thereafter. The learned counsels appearing for the respective parties were heard at length. We find from the judgment of the Delhi High Court in Rajesh Kumar Maheshwari v. Union of India AIR 1992 Delhi 68, that the Division Bench rejected the contention on the ground that the approval granted by the Central Government by the letter of 5-2-1987, was violative of article 14 and those seeking membership through public issue of shares constituted a class by themselves only and distinct from the class comprising those seeking membership through dilution of shareholding of existing members. Therefore, the condition in regard to higher deposit from those belonging to the first category as compared to those belonging to the second category cannot be said to be unconstitutional. This is how the High Court answers the contention in its judgment: "It appears to us that the argument regarding discrimination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difficult to accept the contention that they acted in an unreasonable or arbitrary fashion. The constitution of the Expert Committee itself shows that Shri Bansal was not in a position to influence the other members of the Committee so as to tilt the balance in favour of the members of his fraternity, that is, the chartered accoun-tants. The allegation that as many as 69 selected persons who were chartered accountants found their way in the selected list merely because Shri R.N. Bansal was a chartered accountant and favoured persons belonging to his fraternity must be rejected for want of reliable material on record. It is true that amongst the chartered accountants selected by the Expert Committee there were those who had passed in 1985, 1987 and 1988, as for example, Mahesh Chand Gupta, Satish Kumar Chhabra, Anup Jain, Ashok Gupta, Arun Kumar and Shyam Lal Sharma. Merely because a large number of chartered accountants were selected and merely because some of them had recently qualified, is no ground to set aside the selection. The respondents have rightly emphasised that since chartered accountants had special knowledge of the working of financial institutions and the mechanics ..... X X X X Extracts X X X X X X X X Extracts X X X X
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