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TMI Blog1997 (2) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... whom which is an actionable claim, under the existing provisions of law under which SEBI functions. This issue is similar to one raised in [Special Civil Application No. 5483 of 1996] DM. Investment. SEBI, which also has been heard along with this petition. 3. The petitioner is a company registered under Indian Companies Act, 1956 and is having its registered office at Ahmedabad. As per the case set out in the petition, in pursuance of notice No. B. 20 of 1996 dated 7-2-1996 issued by the Bombay Stock Exchange ('the Stock Exchange') inviting from the members of the Exchange offers for sale of shares of Magan Industries Ltd. (for short, "MIL") because transaction of purchases of shares of MIL, remaining outstanding for want of availability of adequate number of shares with the sellers to fulfil their corresponding selling obligation. In response to the said notice dated 7-2-1996 (Annexure A), the petitioner who was holding shares in MIL offered 50,000 shares for sale at auction to the Stock Exchange through its member, respondent No. 3 Inderlal Agarwal. The transaction of sale of petitioner's shares at auction was at Rs. 118 per share inclusive of chargeable expenses. After deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a very fundamental issue whether even in case investigation results in indiction of petitioner, SEBI has a jurisdiction to make a final order for confiscating or depriving the petitioner of consid-eration which has already become due in respect of transaction about its scrips and which has been received by Stock Exchange from respective parties from whom consideration was to be received, without there being any specific provision of law to that effect. 6. Keeping in view the pleadings and respective contentions on 6-5-1996 it was directed by way of interim relief that SEBI shall complete the investigation in respect of the share transactions of MIL latest by 3-6-1996 (which was extended later on an application being made in this behalf). Respondent No. 1 was also directed to consider whether the petitioner has any role to play in the alleged irregularities in the transaction under investigation. It was also stated in the order that if the petitioner is not involved in the alleged malpractices and irregularities, respondent No. 2 shall modify its order pertaining to retention of the amount in question by the Stock Exchange and permit the Stock Exchange to release the proceeds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a committee to be set up by SEBI, which would exclude the members of the investigating team to be on adjudicating committee. Though this order was made on 4-7-1996 the same was not communicated to the petitioner or any of the affected parties. However, on the direction of the court a copy of the order was delivered to the counsel for the petitioner by the counsel for the respon- dent in the court during the course of hearing, and thereafter amendment was sought by the petitioner for challenging the order dated 4-7-1996 as well, on various grounds to be noticed hereafter. 9. However, before proceeding further, the learned counsel for respon- dent No. 1 raised preliminary objections which may be considered at this stage. Firstly, it has been urged that as no part of cause of action has arisen within the State of Gujarat, petition under Article 226 challenging the impugned orders are not maintainable, in the High Court of Gujarat. Clause (2) of Article 226 provides that the power conferred by clause (1) to issue directions, orders and writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n his favour." 12. This principle has been approved by the Supreme Court in Oil & Natural Gas Commission v. Uptal Kumar Basu 1994 (4) SCC 711, wherein the Court said after quoting the aforesaid principle: "Therefore, in determining the objection of lack of territorial jurisdiction the court must take all the facts pleaded in support of the cause of action into consideration albeit without embarking upon an enquiry as to the correctness or otherwise of the said facts. In other words the question whether a High Court has territorial jurisdiction to entertain a Writ Petition must be answered on the basis of the averments made in the petition, the truth or otherwise whereof being immaterial. To put it differently, the question of territorial jurisdiction must be decided on the facts pleaded in the petition." 13. If we examine the pleading of the petitioner in this respect, the salient features which may be called bundle of facts of which claim for relief of the petitioner is founded are (1) that on 7-2-1996 petitioner offered 50,000 shares of MIL for sale at auction as per invitation by the Stock Exchange; (2) the price settled for such transaction of auction was at Rs. 118 per shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96 is not disputed and the facts about service of summons, recording of statement, and recovery of documents in connection with the said investigation against the petitioner company at Ahmedabad on 2-4-1996 are also not disputed. 15. In these circumstances, the conclusion is irresistible that holding of investigation in the affairs of buying and selling and dealing with the shares by the petitioner company qua the shares of MIL, is an integral part of the whole cause of action giving rise to the present claim of the petitioner and therefore citus of investigation will obviously be a citus of at least a part of cause of action giving territorial jurisdiction to the court exercising jurisdiction over that citus. On the facts averred by the petition-er, which remain undisputed, lending additional support to the pleadings about investigation, if part of investigation at least has been held at Ahmedabad and the investigation being the foundation of the impugned order and such investigation in the case of petitioner for bringing into existence the impugned order has taken place at Ahmedabad, which undisputedly and undeniably is within the territory over which this Court exercises jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but it was to be served by Stock Exchange its furnishing copy in the court will not furnish cause of action. 18. Once it is held that, as it must be, that the order was required to be served on petitioner, the fact whether author of the order itself effects the service or someone else is directed to discharge the ministerial duty of service will not affect the position. What is required to be seen is where the order was required to be served on person whose rights are affected by it. If the order was required to be served within the territory, where this Court exercises jurisdiction, it will not alter the situation if the order has been served in Court during proceedings at Ahmedabad. Position may be otherwise, if but for court proceedings the order on the affected party would not be served at a place within the court's territorial jurisdiction. 19. In the present case, it is not disputed that petitioner's registered office is at Ahmedabad within the territorial jurisdiction of this Court. The notice of investigation were served at Ahmedabad. Statements in pursuance of that were recorded at Ahmedabad. As a result of said investigation impugned order came into existence affecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (supra) was not a case of service of final order. Nor it was a case where final order was required to be served, nor was it a case of quasi judicial order, which unlike a statutory order of acquiring land does not depend on its efficacy on service. The Court found as a matter of law that order under section 52(2) became effective as soon as it was published inasmuch as the property affected by it vests in State on its publication. A judicial order pronounced in open court becomes effective as soon as it is pronounced. Where the order made by quasi judicial authority, and is not made in the presence of parties ordinarily becomes effective, when served on affected parties. 23. Moreover present case, the order has been made as a result of enquiry. It had been made without hearing of affected parties. It envisaged post- decisional hearing to affected parties. Therefore service of the order, in the very nature of things, was an essential part of whole gamut. To save it from being void for want of fair procedure, in fact, the order itself made it requisite for its effectiveness, that it be served on all members of Stock Exchange and other affected parties. Therefore, in the circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s registered office at Ahmedabad. Citus of its movable property is at Ahmedabad. By impugned order the right of the petitioner company arising out of transaction of that movable proper- ty are affected. Thus applying the test in Modern Food Industries ( India) Ltd.'s case (supra) it can well be said that consequence of the impugned order fell on the petitioner at Ahmedabad where the order was served, where the citus of petitioner's property in share was situated. The princi-ples applicable to determine the jurisdiction of court in a suit for recovery of movable property cannot be applicable, obviously because this lis is not for recovery of movable property. The petition is to protect petitioner's right in movable property which has been impaired not by a person possessed of such property but by an act of statutory authority in purported exercise of its powers under the Act. The citus where such right is affected or where the effect of such order to affect the right becomes the relevant consideration. 26. In Damomal Kausomal Raisinghani v. Union of India AIR 1967 Bom. 355, the issue was raised about territorial jurisdiction of Bombay High Court, in respect of a petition challengin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the territorial limits of this State. We have therefore no hesitation in holding that a part of the cause of action has arisen in the State of Tamil Nadu." (p. 161) 28. This decision gives a clear indication that wherever issuance of a notice is necessary part of setting a machinery in motion for the purpose of affecting the rights of the person against whom the machinery is to be mobilized and the service of the ultimate order affecting the rights of the person concerned, forms part of cause of action, in relation to a dispute challenging the final order affecting the rights affected by that order. Mere issuance of a notice to a person concerned may not be a necessary part of cause of action but where issuance of such notice is a pre-condition for setting the machinery in motion and not the conditions subsequent for the purpose of furthering the cause which has already been set in motion, the service of notice itself becomes part of cause of action. It has also been noticed that the place ultimately where the order is served affecting the rights of the person affected, whether such service be for the convenience of the authority or for some other reason furnishes as a gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned order. The fact that the petitioner instead of availing of the opportunity of post-decisional hearing before the Committee has chosen to challenge the order by invoking extraordinary jurisdiction of this Court does not detract from the fact that order itself envisaged service of the order to furnish a cause of action for challenging the same. 32. In this connection the plea that if the petitioner were to file a suit for recovery of the claim, he might have to file a suit at Bombay has no bearing on the question of jurisdiction in the present case. It has to be borne in mind that present is a case which concern relief about impairing of the right of the petitioner in movable property distinct from a suit for the recovery of the money simpliciter. 33. Hence where suit for recovery of suit against his would lie cannot ipso facto govern the question of jurisdiction about claim where right to such recovery has itself been affected, not by debtor but by an act of statutory function. In the latter case what furnishes ground for impairing such right forms part of cause of action. 34. The learned counsel for the respondent in support of their preliminary objections have relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case in the present case, as discussed above. Therefore, for the reasons discussed above, the case is clearly distinguishable on facts. 37. I therefore find no substance in the preliminary objection about lack of territorial jurisdiction and the same is hereby overruled. 38. Another contention is that the petitioner has no privy of contract with respondent No. 1 SEBI. He has dealt in Stock Exchange only through respondent No. 3, a member of Stock Exchange. All dealings having been done through respondent No. 3, and respondent No. 3 having accepted the position that all disputes relating to dealing at Bombay Stock Exchange are subject to Bombay Courts, the petition can avail of remedy only at Bombay and not any where else. Argument look felicitous but is fallacious. The petition is not to enforce the agreements. What is the subject matter of the petition? According to petitioner transaction of 50,000 shares of Magan Industries offered by him for sale at auction has culminated in certain right accruing to him in the form of a right to actionable claim against one or more persons who can be said to be privy to contract. His such right, existence of which is not in dispute, to enforc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-1996 be treated only as an interim order until decision is taken on the representa- tion made before it by respondent No. 1, the petition is premature and must not be entertained. Having carefully read the impugned order, I am unable to sustain the objection. Firstly, the order read as a whole leaves no room of doubt that the authority has reached its conclusion finally about the course of action to be adopted by it of impounding that part of auction proceeds received by Stock Exchange on completion of transaction in question could be used as per its (SEBIs) directions which represents the difference between the price which it considers to be the fair market price to be paid to the petitioner for the shares offered by him at auction for sale, to complete the pending transaction and the actual price received by the Stock Exchange by concluding the pending transactions by delivering those shares to the purchasers on recovering the purchase price from the purchasers at the transaction rate and difference from the short sellers, which according to respondent No. 1 represents profits earned by peti- tioner but tainted with illegality. This conclusion is not revisable or reviewable by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... post-decisional hearing has been offered to those who are desirous of availing the opportunity of post-decisional hearing for review of their cases but is not an interim order as such subject to final decision after hearing all concerned. It may be noticed that so far as SEBI, it has not even thought it fit to inform about this order to affected parties when it admits of the fact that members as well as other persons are affected, nor even discloses who are the affected parties but left it to Stock Exchange to find out and inform such parties about the order. 41. Secondly, the contention which has been raised and requires consid-eration in the present petition and the other petition which has been heard along with it is whether SEBI had authority of law to make such order which results in depriving a person of his property. If it is not authorised by law, the authority cannot have such power to bring this result by way of interim order as well. Without going into the merits of the contention at this stage, suffice it to say that the contention which goes to the root of the matter about authority to make any order of impounding at all whether by way of interim order or final order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kateswaran, Collector of Customs v. Ramchand Sobhraj Wadhwani AIR 1961 SC 1506 may be usefully referred to. The Court said: "The rule that the party who applies for the issue of a high prerogative writ should, before he approaches the court, have exhausted other remedies open to him under the law is not one which bars the jurisdiction of the High Court to entertain the petition or to deal with it, but is rather a rule which courts have laid down for the exercise of their discretion. The wide proposition that the existence of an alternative remedy is a bar to the entertainment of a petition under Article 226 of the Constitution unless (1) there was a complete lack of jurisdiction in the officer or authority to take the action impugned, or (2) where the order prejudicial to the Writ Petitioner has been passed in violation of the principles of natural justice and could, therefore, be treated as void or non est and that in all other cases, courts should not entertain petitioners under Article 226, or in any event not grant any relief to such petitioners cannot be accepted. The two exceptions to the normal rule as to the effect of the existence of an adequate alternative remedy are by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellate authority has sustained the authority of respondent No. 1 SEBI to impound proceeds of a transaction recovered by the Stock Exchange whether as a result of having recourse to auction or on closing up of transactions as a whole or in part on the ground of not permitting the holders of security, excess profits which tainted with illegality or are result of abnormal market conditions in the view of SEBI. Thus apart from the fact that ordinarily after matter has been argued fully on merit, it is not desirable to throw out the petition solely on the ground of availability of alternative remedy, insisting upon the present petitioner to avail of alternative remedy, before the appellate authority whose views are already known will be a futile exercise. 51. In my opinion, therefore in the circumstances of the present case, it is not a case, in which discretion ought to be exercised in favour of the objectors. Therefore this preliminary objection is also overruled. 52. It was faintly urged in both the cases that the impugned orders of retaining the amount of difference between purchase price and the market price recovered from the short sellers on closing up of the transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y shares of the RIL and during the same period he sold 32,900 shares of the RIL through Lloyds Brokerage Ltd. As a net result of these transactions petitioner was to receive delivery in all of 61,900 shares of RIL through Lloyds Brokerage Limited at an overall price of Rs. 471.06. Because of the failure of sellers in honouring their commitment about the delivery of shares, petitioner received only 5,200 shares resulting into transactions for purchase for remaining 5,6700 shares remain outstanding, for which petitioner was to pay consideration of Rs. 2,67,09,102. On 25-10-1995, that is to say after the date when petitioner had already entered into transac- tions of purchases and sales SEBI (Prohibition of Fraudulent and Unfair Trade Practice Relating to Security Markets) Regulations, 1995 (herein after called the Regulations of 1995) were promulgated. On 30-10-1995, Chairman of the Board directed that an investigation about buying and selling of the RIL shares is to take place. It also directed that no notices to persons to be investigated is to be given. On the same day, trading in the shares of RIL were suspended until further order. The area of investiga- tion under the order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is being taken against the persons involved in the price manipulation under sections 1 IB and 24 of the Act for violation of the Regulations of 1995, and the trading in RIL was allowed to continue from 29-1-1996. The petitioner was not named as a person responsible for alleged manipulated market condition. This order was made without affording an opportunity of hearing to the petitioner and resulted in forfeiting his claim to get the difference price collected by the Stock Exchange as a result of closing up of a transaction at Rs. 565. 57. The petitioner appealed before the Central Government who by its order dated 22-5-1996 (Annexure A) were rejected. The appellate author- ity did not decide the question raised by the petitioner that since Regula-tions of 1995 promulgated and came into force after the close of trading period, during which the transactions aforesaid were conducted and therefore had no application to these transactions on the ground that since the impugned order of transferring the difference price in the investors protection fund is not punitive in character, it is not necessary to be decided. For the same reason it also held that the fact that the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves by closing out the transactions at Rs. 565, the price prevailing on 24-10-1995 instead of at Rs. 669, the highest price prevailing before the date of closing out. Suffice it to say that so far as this contention of the petitioner was concerned, another investor has on earlier occasion come before this Court challeng- ing fixation of the price at which squaring up has taken place by way of Special Civil Application No. 9450 of 1995 which was rejected by order of this Court dated 22-1-1996. Moreover, that act of violating the SEBI direction is attributed to National Stock Exchange which is not a party before us in this Special Civil Application. 62. In its reply the facts about the issuance of direction of SEBI on 30-10- 1995, the transactions having been ultimately settled by way of closing out at the price referred to above, and collection of the difference in transac- tion price and the closing up price from the short sellers by the Stock Exchange, the passing of order of transferring the same amount to the investors protections fund and absence of affording an opportunity to hearing to the petitioners have not been disputed. It has also been specifically pleaded that there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious cities including Ahemdabad whereby the members have been provided full-fledged trading facilities through National Stock Exchange terminal installed in the offices of the respective members situated in various cities including the cities of Ahmedabad, Calcutta, Delhi, Madras, etc., it was under the said set up the petitioner placed his orders for purchase of share of RIL with Lloyds Brokerage Limited, Ahemdabad, a member of NSE at Ahmedabad only it was in furtherance of the said orders of the petitioner that the said member of National Stock Exchange through its National Stock Exchange Terminal at Ahmedabad entered into a contract for pursuance of 94,800 equity shares on behalf of the petitioner against the payment made by the petitioner at Ahmedabad for the said equity shares. Respondents have not thought it fit to deny these averments in the rejoinder affidavit of B.A. Gandhi which was furnished with the permission of the Court, by any counter. In view of the aforesaid undisputed facts, and for the reasons already discussed, while considering the like objections hereinabove in cognate matter Special Civil Application No. 2224 of 1996 which is being heard and decided along w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... medies in accordance with law to enforce his claims in appropriate forum if occasion for the same arises. 66. It was also urged that at best the impugned order can be treated to be cancellation of the transaction of purchase entered by the petitioner and by cancellation of transaction he has suffered no loss, nor he has deprived of any of his property because he has never acquired shares or right in the shares delivered of which was not available. At best if the order of transferring the price recovered by the Stock Exchange is held to be illegal, the persons entitled to refund would be short sellers. 67. Arguments on the fact of it though felicitious does not stand the test of scrutiny. Firstly, this cannot be termed as preliminary objection but concerns the merit of the order. Secondly, orders having come into existence as a result of holding an enquiry and/or subject to further appeal it does indicate the quasi-judicial nature of the orders. It is now well established that where an authority whether in exercise of its administra- tive functions or qua-judicial functions makes an order the order speaks for itself and reasons cannot be supplied, by reading something in it which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to comply with any of the provisions relating to delivery, payment and settlement of deals or on any failure to fulfil the terms and conditions subject to which the deal has been made. Closing out for deals settled through Clearing House is dealt with in clause 9.3 which entitles Stock Exchange to close out the transactions against any party in default on behalf of the receiving or delivering member as the case may be. Clause 9.8 says that the closing out by buying-in or selling-out shall be effected by Exchange initiated auction or by any other method which the Executive Committee or delegated authority may decide from time to time. Clause 9.9 makes it clear that save as otherwise provided the member at whose instance or on whose behalf the buying-in or selling-out is effected by the Exchange for the purpose of closing-out shall be responsible for the deal made and no liability or responsibility shall attach to the Exchange or its employees for any deal made in pursuance of such closing-out. This clause makes it abundantly clear that closing out transactions affected the rights and liabilities of transacting parties alone and not in any manner holds Stock Exchange responsible fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not only gets refund of his part of consider-ation paid but also the difference recovered from short sellers. 70. Auction procedure or closing out is a method by which outstanding transactions are concluded, and not a process of cancellation of transac- tion and the purchaser who is entitled to buy the securities becomes entitled to such amount as a result of conclusion of his contract of purchase by closing out. It also clearly indicates that price at which closing out is to take place is highest prevalent price during last six months, that is to say on failure of short sellers to deliver the scrips, the ingredient of earning profit at the difference of highest price prevailing during last six months and the transaction price is the legitimate expectancy of profit, in case of close out. No ground for assuming a windfall of illegitimate profit can be attributed to a person who enters the market, unless he himself is found to be guilty of fraud, or unfair market practice to that end. Every investor enters the market for earning goods profit on his investment. How much he is able to make or lose may depend on his own judgment and market at the time of transactions. Therefore, becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the offerer of scrips at the auction or the purchaser whose transaction has not been honoured and forms his property which as a result of directives of the Board to retain that amount to be utilised at the directions of the Board instead of it being paid to the persons who are entitled to it. As the rights of the petitioner to enforce such actionable claim is adversely affected by intervention of SEBI, their locus standi to maintain this petition cannot be doubted. 73. Before proceeding further to the discussions, it may be noticed common premise about which there is no dispute between the parties. Firstly, on the culmination of the transactions in the manner they have been culminated, the amount affected by the impugned orders would be property of the respective petitioners as their actionable claim which they were entitled to recover, but for the orders under challenge. Secondly, the impugned orders results in depriving the petitioners of that property. Thirdly, it is the constitutional requirement under Article 300A that no person can be deprived of his property save by authority of law. Requirement as to authority of law 74. On the aforesaid premise, apart from various gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle 31 both were omitted by 44th Amendment. Article 31 clause (1) was re-enacted by inserting it as Article 300A reproduced hereinabove. This omission from part III and insertion as Article 300A affected the remedies available to citizen against its violation and took the right away from the inhibition of Article 13. At the same time, it did not alter the precondition required before a person is deprived of his property that there must exist authority of law. The scope and ambit of this requirement, did not alter with aforesaid amendment. 77. First question that calls our attention is what is meant by deprivation of property. Deprivation of property may take place in various ways. It may take place by way of destruction of property, by way of confiscation; by way of revocation of property rights granted by a private proprietor; it may be by way of seizure of goods or immovable property from the possession of an individual or it may result on account of taking over control of the business by State. Compulsory acquisition being one of the form of deprivation was specifically dealt with by clause (2) of Article 31. While property had its character as fundamental right, acquisition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h authorises their acts." 82. In Rai Sahib Ram Jawaya Kapur v. State of Punjab [1955] (2) SCR 225, Mukherjee, C.J., speaking for the court while considering the provisions of Article 266(3) of the Constitution which provides that no money out of the consolidated fund of India or consolidated fund of the State shall be appropriated except in accordance with law opined: "...Under article 266(3) of the Constitution no moneys out of the consolidated funds of India or consolidated fund of the State shall be appropriated except in accordance with law and for the purposes and in the manner provided in this Constitution. The expression 'law' here obviously includes the Appropriation Act...." (p. 238) 83. In Bishan Das v. State of Punjab AIR 1961 SC 1570 the Court reiterated its view in Wazir Chand's case (supra) that State or its executive officers cannot interfere with the rights of citizens unless they can point to some specific rule of law which authorises their acts. 84. In Ghulam Hussain Haji Yakoob & Sons v. State of Rajasthan AIR 1963 SC 379 question arose whether the Collector, Sirohi had authority of law to levy and collect custom duty on export of Char Coal out of State of Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales tax though not exigible to the public exchequer punitively. The Court, while generally agreeing with the principles enunciated in R. Abdul Quader & Co.'s case (supra) , drew a distinction between the ratio laid down in Abdul Quader & Co. 's case (supra) on the ground that while it was construing a provision providing for recovery simpliciter, the case is Bombay Sales tax arose out of a provision for forfeiture of sum collected by a dealer which was not tax payable under the Act was construed as punitive measure for something done by the dealer contrary to the provisions of sales tax concerning the authority of the dealer to collect the amount of tax payable to the State exchequer of sales transacted by him from the purchasers. The Court opined that since the authority of the dealer to collect the tax payable on a transaction was a part of substantial law authorising levy and collection of tax, if a tax has been collected in breach of that law, and law provide for penalty for such breach of law, such penalty provision is incidental to main provision of levy and collec-tion. The legislative competence to enact on a particular subject includes authority to enact in respect of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcising its executive power which is coexten-sive with legislative power. The Court repelled the contention and explained the observation made in Rai Sahib Ram Jawaya Kapur's case (supra) by pointing out that though the action in Rai Sahib Ram Jawaya Kapur's case (supra) was not supported by legislation but it did not operate to prejudice of any citizen and the court had held that by the action of State Government no rights of the petitioners were infringed since a mere chance of having particular customers cannot be said to be a property or to any interest or undertaking. It is clear that the State of Punjab had done no act which infringed a right of any citizen; the State has merely entered upon a trading venture, it did not infringe their rights and concluded: "...Viewed in the light of these facts the observation relied do not support the contention that the State or its Officer may in exercise of the executive authority infringe the right of the citizen merely because the Legislature of the State has the power to legislate in regard to the subject on which the executive order is issued." (p. 1174) 90. This decision was further reaffirmed and clarified in a latter decision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew stated in Wazir Chattel's case (supra) and Bishan Das's case (supra) that an illegal seizure amounts to deprivation of property without authority or law. It clearly spells that an order of seizure of property by any authority dealing with enforcement of law or as an investigating agency as a measure of making law effective amounts to deprivation of property and unless such seizure is authorised by statute under which it is acting, the seizure will be illegal and cannot be considered authorised by law which could be saved, merely because it can be said to be to fulfil the object of the enactment as being remedial against breach of law. 94. From the aforesaid authorities it is abundantly clear that whether it is a question of finding whether a tax is authorised by law or a person is deprived of his property by authority of law or appropriation of consoli-dated fund is in accordance with law, the law in the context means an act of Parliament or of a State Legislature or a rule or statutory order having force of law, i.e., a positive or State made law and not a mere executive instructions or guidelines issued in exercise of the executive power of the State or in exercise of such po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d wide amplitude of section 62(2)( h) and section 28 and condition of licence, all we need to say is that though under section 28 licences are issued on the prescribed forms and on payment of such fee as prescribed and licences containing such particulars as the State Government may direct etc., this power even though wide is yet confined within its frame and can in no event assume the power to impose or levy a tax or excise duty by means of a rule without the sanction of the Act...." (p. 1397) 98. In Ahmedabad Urban Development Authority v. Sharadkumar Jayantikumar Pasawalla AIR 1992 SC 2038, affirming the view taken by this Court in Sharadul Kumar Jayanti Kumar Pasawala v. Ahmedabad Urban Development Authority AIR 1984 Guj. 60 held that since there is no express provision for imposition of fee and the State Government has not delegated any power to the Development Authority to impose fee for development, the regulations framed for such imposition of fees and the demands made therefore are wholly unauthorised and illegal and reiter-ating the view taken by the Supreme Court in Hingir Rampur Coal Co. Ltd v. State of Orissa AIR 1961 SC 459, Jagannath Ramanuj Das v. State of Orissa A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isting penal provision. It is a clear indication that even where a provision for levy of penalty exists and is ambiguous in its expression a person cannot be subjected to such provision by stretching the same. Therefore, it is not possible to subject a person to penal consequences of his acts without there being a specific provision at all on the basis of intendments alone. 104. Decision in Indian Council for Enviro Legal Action v. Union of India, AIR 1996 SC 1446 was also referred to, where the Apex Court in a petition under article 32 directed the Central Government to recover costs of remedial measures from Companies to urge that recovery of cost from polluting company amounted to depriving the company of its property under general power of taking remedial measures to prevent pollution. In my opinion, their contention is not well founded. It is to be noticed that the Court in the said case applied law enunciated in Oleum Leak Case AIR 1987 SC 1088 (sic) holding respondents companies Nos. 4 to 8 liable to compen-sate for harm caused by them to villagers and bound to take all necessary measures to remove the sludge and other pollutions lying in the affected area and to defray the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial costs of preventing or remedying damage caused by pollution should lie with the undertakings which cause the pollution. Under the principle it is not the role of Government to meet the costs involved in either prevention of such damage, or in carrying out remedial action, because the effect of this would be to shift the financial burden of the pollution incident to the taxpayer......."(p. 1466) 105. Thus the obligation to defray the cost of remedial measures of removing pollution was held to be of the polluter under common law. Issuing directions for recovery of such cost was therefore held to be implicit in provisions of sections 3 and 4 of the Environment Protection Act, 1986. 106. Thus liability to incur cost being already implicit in existing law no new or fresh authority was required in this regard. It was not a case where the Court has countenanced any forfeiture as a penal measure for breach of some provisions without any pre-existing authority of law to bring that effect. 107. Reference was made to Jilubhai Nambhai Khachar v. State of Gujarat AIR 1995 SC 142. The issue related to acquisition of agrarian and mineral rights under Bombay Land Revenue Code and Tenure Abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he light of its own facts and setting. The phrase 'deprivation of the property of a person' must equally be considered in the fact situation of a case. Deprivation connotes different concepts. Article 300A gets attracted to an acquisition or taking possession of private property, by necessary implication for public purpose, in accordance with the law made by the Parliament or of a State Legislature, a rule of a statutory order having force of law... Public interest has always been considered to be an essential ingredient of public purpose. But every public purpose does not fall under article 300A nor exercise of eminent domain an acquisition or taking possession under article 300A. Generally speaking preservation of public health or prevention of damage to life and property are considered to be public purposes. Yet deprivation of property for any such purpose would not amount to acquisition or possession taken under article 300A. It would be by exercise of the Police power of the State. In other words, article 300A only limits the power of the State that no person shall be deprived of his property save by authority of law. There is no deprivation without any sanction of law. Depriv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itated provision of article 31 in article 300A on the question of requirement of payment of compensation on assuming eminent domain of any property by way of acquisition. The question of finding the ambit and scope of deprivation through taking possession or acquisition of property by assuming eminent domain not arising in this case. The question, whether impounding, full or part of amount, otherwise recoverable in law from a person, amounts to depriva-tion was not the subject matter of issue in Jilubhai Nambhai Khachar's case (supra) . However, this much can be said that decision in Jilubhai Nambhai Khachar's case (supra) reaffirms the principle firstly that there cannot be deprivation of property without authority of law, secondly what amounts to deprivation of property cannot be subject to any abstract principle. No hard and fast rule can be laid down. Each case must depend upon its own facts, and that the word 'law' used in article 300A must be an act of Parliament or of State Legislature rule or statutory order having force of law. 113. The learned counsel for the respondent urged to draw distinction between imposition of tax required to be authorised by law under article 265 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the decision in Ahmedabad Urban Development Authority on the ground that the Supreme Court itself has distinguished the two cases relied on by the Ahmedabad Urban Development Authority in its favour to come to a different conclusion. The fact that the decision in Ahmedabad Urban Development Authorities case distinguishes the two authorities does not lead to the conclusion that it supports the respondents plea about inferring an authority of law without there being specific provision merely from the entitlement of the Board to take appropriate measures without actually taking such measure which can properly be permitted as law prescribing the deprivation of property which could be permitted as a legislative measure prescribing for such consequences by law. As pointed out by the Supreme Court itself the decision in District Counsel of the Jowai Auto-nomous District's case (supra) was justified on the ground that authority to levy fee by the District Counsel flew from the special provisions of the Constitution itself under which it was constituted. The Court notwithstanding holding that the District Counsel could levy fee under paragraph 3 of the 6th Schedule to the Constitution, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a person of the property and in exercise of power in the field of administrative law by way of making orders incidental or ancillary power actually conferred on it." 117. In view of the consistent view taken by the Supreme Court as discussed above whether under article 265 or article 31 as it existed prior to its deletion in Constitution 44th Amendment Act, 1978 or under article 300A it is not possible to accept the plea of distinguishing the scope and ambit of authority of law required under article 300A by separate rules of construction. 118. The authority of law envisaged under the constitutional provisions has a pre-condition before imposition of tax or sustaining said action depriving a person of his property there must exist an authority of law in the form of a positive or State made law whether as an Act of Parliament or of a State Legislation or rule or a statutory order having the force of law, that is to say a rule of conduct framed by some legislative process or under some legislative authority having the force of law and such law must be specific in conferring such authority, on the State functionaries imple-menting the law. There is no room for intended authority, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to impose tax on sales/purchase of goods it can exercise taxing power under Entry 54 of List II so long as it does not militate against the legislative field occupied by the Central Government under the IDR Act or any other enactment made under Entry 53 of List I proceeded on complete misconception of taxing powers of State. In fact as stated earlier the entire theory of occupied field or State legislation being repugnant to Central Legislation is available when the two legislatures exercise their powers under Concurrent List. Therefore, the order of the High Court striking down the levy cannot be upheld." 120. The decision in Synthetics & Chemicals 'case (supra) nowhere against the earlier views expressed by the Apex Court about the requirement of specific provision of law whether of an Act of Parliament or State Legislature or rules or regulations or Statutory order having force of law by way of positive State made law or that while examining the issue about the existence of a law authorising deprivation of property different yardstick about finding out the existence of law be applied is not sustain able for the reasons discussed above. 121. It was strenuously urged by the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x requires a specific power before it can be imposed. What is contended by the learned counsel is that interpretation of a taxing provision, with this well accepted principle of being strictly construed and requiring of a specific power before a tax can be imposed, is a different proposition compared to the interpretation of a remedial legislation concerned inter alia while taking action to remedy a breach of Regulation and Act. Pausing here it is the constitutional mandate that no tax shall be imposed without authority of law. It is also constitutional mandate that no person shall be deprived of his property unless authorised by law. So far as this requirement of the Constitution of existence of authority of law before tax can be imposed or a person can be deprived of his property, in my opinion, cannot be different in either cases, and the existence of authority of law as distinguished from the question of mere acceptance of the fact that such authorisation it made may be justified being incidental to the object of the Act cannot be accepted. If authority of law for the purposes of imposition of tax is required to be specific because of the Constitutional mandate, the authority o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l words are capable of two constructions, one of which is likely to defeat or impair the policy of the Act whilst the other construction is likely to assist the achievement of the said policy, then the Courts would prefer to adopt the latter construction. It is only in such cases that it becomes relevant to consider the mischief and defect which the Act purports to remedy and correct. 127. In a recent case from House of Lords in Maunsen Olins 1975(1) All ER 16, Lord Simon explained that the rule in Heydon's case is available at two stages primary and secondary. The primary rule of construction is to consider the plain meaning and if there is no plain meaning mischief rule is the most important rule amongst the secondary cannons of construc- tion. 128. As we shall presently see a number of authorities have been cited by the learned counsel for the respondents in this regard but none relates to a situation where question had arisen in the context of satisfying the constitutional requirements for sustained the said action particularly in the field of requirement of authority of law, nor such authority support the contention that for finding whether authority of law exist for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sputes Act. 132. It is in the context of the said contention, the court made it clear: "... the Court is not to make inroads by making etymological excursions. 'Void ab initio', 'invalid and inoperative' or call it what you will, the workmen and the employer are primarily concerned with the consequence of striking down the order of termination of the services of the workmen. Plain common sense dictates that the removal of an order terminating the services of workmen must ordinarily lead to the reinstatement of the services of the workmen. It is as if the order has never been and so it must ordinarily lead to backwages too...." (p. 424) The Court further made it clear: "... But there may be exceptional circumstances which make it impossible or wholly inequitable vis-a-vis the employer and workmen to direct reinstatement with full back wages...." (p. 424) Obviously, present is not a case of this nature. 133. In Works Manager v. Vishwanath AIR 1970 SC 488, the Court was required to consider whether the timekeepers who were preparing pay sheets of workshop staff maintained leave account, disposed of settlement cases, maintained records for statistical purposes, maintained attenda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invalid State law which is outside the State list, such a Validating Act would be invalid. It is for the Constitution, not Parliament, to confer competence on State Legislatures. But where Parliament which has power to enact on a topic actually legislates within its competence but, as an abbreviation of drafting, borrows into the statute by reference the words of a State Act, not qua State Act but as a convenient shorthand, as against a long hand writing of all the sections into the Central Act, such Legislation stands or falls on Parliament's legislative power, vis-a-vis the subject. The distinction between the two legal lines may sometimes be fine but always is real." (p. 1389) 136. In its Validation Act, the Parliament clearly stated two things, firstly, that the laws specified in the Schedule shall be and shall be deemed always to have been, as valid as if the provisions contained therein had been enacted by Parliament and secondly that they shall be deemed to be valid as if the provisions contained therein had been enacted by Parliament. 137. Therefore, clearly it was a case of Parliament adopting language of the statute framed by State Legislature as if it was enacted by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a manner which will make the particular provision purposeful...." (p. 2328) 139. In saying so that Court referred to its earlier decision in M. Pentiah v. Muddala Veeramallappa AIR 1961 SC 1107, wherein the court quoted with approval the words of Lord Denning's illustrating the role of interpreter in such cases by holding that: "... A Judge must not alter the material of which the Act is woven, but he can and should iron out the creases...." (p. 1115) 140. In the context of the present controversy, it is not the contention of the any of the parties that any provision or Act, Regulation or Rules is not compatible with each other and requires harmonious construction requi- ring the ironing out of creases with reference to the requirement of article 300A, the remnant of article 19(1)(g) and article 31 since deleted, is that the authority of law for depriving a person of his property requisitioned under the Constitution need be specifically through a law framed by legislative process. No decision contrary to the one referred to above have been cited at Bar. If that be so, the question whether the court should supply the authority which is not existing in the Act, Rules or Regula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt after referring to the principle enunciated by Lord Denning referred to above, and considering the meaning of penalty has stated categorically that while considering the scope of section 14(2A) they have proceeded adhering to the language of the section: "We are therefore satisfied that some of the conditions subject to which the exemption was granted have been violated. So this part of section 14(2A) is satisfied. Now we shall see whether the cancellation under section 17(4) is a penalty provided by or under the Act." (p. 1297) 143. The Court did not read existence of a provision providing conse-quence in the clause providing for breach itself. It looked for another provision for supporting the consequential punitive measure. It was only on finding that other provision authorises penalty, that the court upheld the action. It do support that there must exist a provision for inflicting consequence of penalty on the subject. 144. It was urged that in construing the provisions of a statute which is remedial in nature to suppress certain mischief at its object ought not to be placed at par with statutes with object of taking or deprivation of property. To put it other way the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m any depositor/ subscriber to any schemes run by the company, with or without his consent, any amounts towards processing or maintenance charges or any such charges, by whatever name called, for meeting its revenue expenditure: Provided that a company may charge to a new depositor a one time initial sum not exceeding Rs. 10 towards cost or expenses for issuing brochures/ application form, servicing the depositor's account, etc." 147. The background of this controversy was that in order to regulate the activities of non-banking companies in receiving deposits from public on large scale, RBI Act, was amended by Act No. 55 of 1963 by inserting Chapter 11B containing sections 45H to 45Q. Section 45J of the Act empowers the Bank to regulate or prohibit issue of prospectus or adver-tisement by a non-banking institutions soliciting deposits of money from the public. Section 45K enables the Bank to collect information from non-banking institution as to deposits and give directions to such institution. Paras 6 and 12 of the 1987 directions issued under these provisions were challenged before Supreme Court and repelled. 148. After Peerless II case upholding paragraphs 6 and 12 of the 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of conduct to be applied by persons who could be dealt with by it under the Act, and also prescribes consequences of breach thereof, the question will be SEBI's competence to lay such code of conduct with all ancillary and necessary incident which is quite distinct from and the question whether the SEBI could act in a manner affecting rights of people in a manner without affecting rights of people in a manner without prescribing such provision which results in depriving any person of his property. While the former may be sustained with reference to section 11, the latter cannot be. 150. In this context statement of law in State of Kerala v. P.J. Joseph AIR 1958 SC 296 may be usefully referred to, which brings out clearly the distinction. 151. In P.J. Joseph's case (supra) question arose about validity of demand of additional payment of 20 per cent on sale of liquor from licence in pursuance of an endorsement made by the Government on a reference made to it by the board of revenue. The Court held that the endorsement was not a statutory order passed by State in exercise of statutory power under the statute. It was nothing more than what is purported to be namely a departmental i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port for the plea of the learned counsel to read the provision of statute to include power to forfeit even if the same does not exist or to confer power on the statutory authority created under the Act or by other courts in India. The court clearly observed that provisions of forfeiture of property of those in office indulging in corrupt practice is needed to make part of law. It said: "May we say in parenthesis that a law providing for forfeiture of properties acquired by holders of public office (including the offices/posts in the public sector corporations) by indulging in corrupt and illegal acts and deals, is a crying necessity in the present state of our society. The law must extend not only to as does SAFEMA properties acquired in the name of the holder of such office but also to properties held in the names of his spouse, children or other relatives and associates........ It is for the Parliament to act in this matter, if they really mean business." 155. These observations of the Court negates the learned counsel's contention that in the matter of conforming authority for depriving a person of his profits by impounding or forfeiture, the statute should be read in expansiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e process. Legislation itself signifies the act of giving or enacting laws, the function of the Legislature is to frame and enact laws or formulation of rules for the future, that is to say, in the first place, rules governing a particular course of conduct are framed and thereafter any conduct which is governed by the sphere of such rules is to be adjudged, whether it is valid or ultra vires of the rules on the touch stone of those rules. 159. In Black's Law Dictionary Vth edition, the word 'legislative' has been stated to mean making or giving laws pertaining to definition of law given or to the process of enactment of law. It also says actions which relates to subject of Parliament or general character are legislative. 160. Legislative Act in the same book has been stated to mean 'one which prescribes what the law shall be in future cases arising under it'. 161. So also legislation has been explained to mean the act of giving or enacting laws, the power to make laws; the act of legislating preparation and enactment of laws; formulation of the Rules for the future. 162. Law generally has been understood to mean a rule of action to which men are obliged to make their conduct c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le, regulation or custom, we hold that a law cannot come into being in this way. Promulgation or publication of some reasonable sort is essential...." (p. 468) 166. The fact that law is to be published and made known in someway, before it become operative to affect the subjects implies that before any action can be subjected to test of Code of Conduct provided by law and he visited with consequence that may follow breach of such Code of Conduct or law, Code of Conduct which is required to be followed, and consequenc-es that are to follow on its breach, both must be made known. This inhers in it specific provision for depriving one of its property by forfeiture or other penal measures. Unless law making such specific provision is made known, the law cannot be held to exist for sustaining such action. 167. Somewhat similar view was expressed by the Supreme Court again in Khemka & Co. (Agencies) (P.) Ltd. v. State of Maharashtra AIR 1975 SC 1549: "The imposition of a pecuniary liability, which takes the form of a penalty or fine for a breach of a legal obligation cannot be relegated to the region of mere procedure and machinery, for the realisation of tax. It is more than that. Suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n enquiry, it is satisfied that it is necessary in the interest of investors or orderly development of the securities market or to prevent the affairs of an intermediary or other persons referred to in section 12 being conduct- ed in a manner detrimental to the interest of investors or securities market or to secure the proper management of any such intermediary or persons. The persons referred to in section 12 are stock brokers, sub-brokers, share transfer agents, banker to an issue, trustee of trust deed, registrar to an issue, merchant banker, under writer, portfolio manager, investment advisor and such intermediary which may be associated with the securi- ties market. Section 29 confers authority on the Central Government by notification to make rules for carrying out the purposes of this Act and particular reference to the matters in respect of which rules can be framed have been referred to in section 29(2). Section 30 of the Act empowers the Board to make regulations consistent with the Act and the Rules made thereunder to carry out the purposes of this Act. Apart from generality of the provisions enabling the Board to make Regulations. Sub-section (2) of section 20 also enu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in provision of section 11B which empowers the Board to issue such direc-tions as may be appropriate in the interest of the investors in securities and the securities market to any person which include any person associated with the securities market where the Board is satisfied after making or causing to be made an enquiry about the necessity of issuing such directions. In this context, it has also been urged that the Regulations framed under section 30 are a specific of subordinate legislation and have binding force as statute after the same are laid before the Parliament and have not been modified and not disapproved by the Parliament and if modified by Parliament in its modified form. 172. It is contention of none of the parties that there is any specific provision whether under the Act, Rules or the Regulations for making of the order for impounding monies by the Board like the one which has been made in the present case. Thus in view of the requirement of specific authority of law as laid in Wazirchand's case (supra) and reaffirmed in later decisions, the issue would have ended here. However, it was urged that this authority of law for depriving a person transacting at Sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a legislative act or direction which may be issued on arising of such a situation having relation to the objectives of the Statute. Obviously, in the former case, if a plan or course of action has been chartered which can be said to have force of law, it must satisfy the test of being a valid law enforceable. In latter case, where action is guided subsequent to happen- ing of the event to deal with a situation arising from such happening to be collated to the plan adopted by the Board, as a remedial act to repair the breach, or to create situation conductive to the plan. Former falls in the sphere of adopting legislative measure for achieving the objectives of the statute and the latter falls in the sphere of administrative actions to achieve the purposes of the Act. If the latter action results in depriving a person of his property, unless it is backed by proper legislative sanction, the action would fail. In the former case, adoption of legislative measure by the Board, if it is empowered to legislate on the subject, will not fall for want of authority to legislate. 177. This is so because apart from generality of provision, there is a specific provision empowering the Board to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Synod of the Church of England to take measures as under: "1226. General Synod Measures. The General Synod of the Church of England may frame and pass legislative proposals, termed Measures, concerning the Church of England. A measure agreed to by the General Synod is submitted by its Legislative Committee to the Ecclesiastical Committee of members of both Houses whose duty it is to report to Parliament upon the nature and legal effect and expediency of the Measure. The report and the text of the Measure are laid before Parliament, and a resolution is submitted to each House directing that the Measure, in the form laid before Parliament, be presented to Her Majesty. When this resolution has been passed by each House and the royal assent signified, the Measure has the force and effect of an Act of Parliament. Parliament has thus no power to amend a Measure, but either house, by declining to agree to the resolution, is able to effect its rejection." 181. Reference in this context may be made to Attorney General v . Witts United Dairies Ltd. 1922 (127) LT 822. It was a case where the Food Controller, during war period, was empowered by the Defence of the Realm Regulations to make r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to regulate and make any order it deem appropriate and expedient to achieve the objec- tive include the authority to burden the subject with monetary liability without express provision of statute to that effect. The fact that the action has nexus to achieve the objective for which authority is conferred on Board, does not absolve the requirement of an express statutory authority in that regard, when it comes to deprive a person of his property. The view found its approval in A Venkata Subbarao v . State of Andhra Pradesh AIR 1965 SC 1773. 183. Here we may notice one of the contention of the learned counsel for the SEBI was that no element of punishment is involved in the directions of the Board. The direction only deprive the petitioner of windfall profit arising out of manipulated market and is not a measure of penalty. The plea is also raised to support the contention that for this reason no hearing was required to be given. 184. If the order has direct nexus with any act of petitioner to befell him with its consequences, it will undoubtedly be a penalty requiring specific provision of law providing for forfeiture of confiscation as noticed in the case of Wazir Chand ( supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collated as ancillary to regulating stock market but primarily to get funds for its activity. That is in the nature of raising money. This amounts to levy of fees or tax. The Act does not authorise levy of fees on tax, for any purpose. The delegation of authority under parent statute does not get such power by necessary intendment, which is not even authorised by parent of statute. 189. It is to be seen that in its order dated 5-7-1996 in Special Civil Application No. 2224 of 1996 the Board has ordered to impound the proceeds with Stock Exchange by directing that the auction proceeds and close out proceeds which has been withheld by the Stock Exchange, to the extent it represents difference between auction price/close out price and standard price be not given to offers/buyers and should be impounded. The Exchange was directed to credit the monies impounded to its Investor Protection Fund. In Special Civil Application No. 5483 of 1996, the Board in its order dated 25-1-1996 has ordered simpliciter to transfer the monies collected in adherence to its earlier order dated 30-10-1995 to Investor Protection Fund of the concerned Stock Exchange. 190. Impounding has definite meaning in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n itself is not part of main provision, ancillary authority conferring power to deprive a person of any property on acting against prohibitory measure, which is ancillary to mean power cannot be inherently inferred in the enabling provision. Such provision can only follow the prescription of prohibiting measure. Obviously measure here refers to legislative measure in the sphere covered by section 11(2)(e ). 193. For the purpose of adopting measures of legislative character, Board has been conferred with power to frame Regulations under section 30 which in order to be effective, has to be placed before each House of Parliament during its session for a period of 30 days. Parliament has necessary power to modify or decline to agree with the same. In case the Parliament decides to modify the Regulation in its entirety or a part of it, the Regulation becomes effective in its modified form. If Parliament declines to pass it, it ceases to have any effect, but it the Parliament does not interfere in either way, Regulations continue to have force of law and are binding as Statute as per the provision of main Act. But unless the same are placed before Parliament and continuity remain before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... field of State authority left uncovered by legislative enact-ments. Hence, contentions of Mr. Shelat cannot be accepted in abstract, where the question is in the context of deprivation of property of a person, which under Constitution can only be sustained if authorised by law, law in the context means positive statutory law. Therefore unless the power to make any order or issue direction which results in depriving a person of his property, is traceable to some specific provision of law, the same cannot be upheld. 198. It may further be pertinent to notice if conferment of such enabling powers to take appropriate measure on authority entrusted with the duty to achieve objective in respect of which law could be framed by itself were to satisfy the requirement of authority of law needed under article 31 or now under article 300A, executive power on the Union of India or the State as the case may be, co-existing and co-existence with the legislative power of the Parliament and the State Legislature envisaged under articles 73 and 162 respectively would not have fallen short of the authority of law required under article 31 or for that matter under article 300A enabling the State to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. The Court negatived this contention and held it is manifest that if the power existed it must be exercised according to valid principles consistent with the provisions of the Act and the language of section 49 showed that the power was exercised without making any Regulation. As discussed above, the question was not about absence of power but the manner of exercise of power according to the provisions of the Act. Prescribing higher rate for consumption of excess quota on introduction of rationing, was considered to be part of the existing power. Power to impose ration was an executive policy decision of law to distribute existing supply equitably and prescribing price of supply of electric supply. It was a case of recovery of a particular price in exchange of commodity supplied. In a given case on certain conditions existing higher or lower rates may be charged for supply of commodity. Objective behind prescrib-ing higher rate was to enforce that the order of rationing is properly complied with by the consumers. Decision neither enunciates a principle that an act can be permitted in the name of enforcement of the objective of the Act itself, without there being any authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intermediary or persons. As such, section 11B does not envisage the adjudication and making an order adverse to a person having a casual connection between the finding recorded against that person and consequences to be visited upon that person. For that, under the scheme of the Statute, separate provision have been made for imposing penalties and visiting the con-cerned person with punishment of imprisonment and fine by making such an act as an offence punishable with imprisonment and fine after appro-priate trial. 203. Chapter VIA provides for penalties and adjudication. Section 24 makes contravention or attempt to contravene or abetment to contra- vene the provisions of the Act or to any rules or regulations made thereunder as an offence punishable with imprisonment for a term which may extend to one year or with fine or both, which are to be tried by ordinary courts not inferior to Metropolitan Magistrate or Judicial Magistrate, Ist Class and cognisance of which is not taken except on the complaint made the Board under section 26. Thus, while action against the person involved in contravention of the Regulations, rules or provisions of the Act, is to be dealt with separately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y incorporating such measures in rules through Central Govern- ment in exercise of its power to frame rules, section 11B empowers the Board to issue such guidelines for the purposes, of regulating conduct of the persons named in section 11B with reference to its satisfactions about the matters referred therein, on the basis of an enquiry which has been conducted by itself or which it has caused to be conducted. In other words it can be said while section 11 operates in the field of laying down general regulatory measures as a matter of policy section 11B operates in the field of prescribing specified code of conduct in relation to specified person or clause of person referred to in section 11 or associated with the securities market or to any company in respect of matters specified in section 11A as the case may be referable to its finding in enquiry. That is to say it can direct such persons to do or not to do certain acts in a particular manner. But certainly power to impose penalties or punishments as a result of such enquiry without there being any specification to the nature of penalties or punishments that can be visited cannot be inferred. 207. In this connection it would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 11 if the same can be treated as ancillary and incidental to achieve the main objective and are otherwise within other constitutional limits. 212. The next question that arises is whether the Regulations of 1995 of the SEBI provide for such ancillary measure. It has been pointed out by the learned counsel for the respondent that Regulations 11 and 12 read together confer such specific authority of depriving the person of consid-eration of the completed transactions. For the ready reference Regula- tions 11 and 12 are quoted below: "11. Power of the Board to issue direction.-The Board may after consideration of the report referred to in Regulation 10, and after giving a reasonable opportunity of hearing to the person concerned, issue directions for ensuring due compliance with the provisions of the Act, Rules and Regulations may thereunder, for the purposes specified in Regulation 12. 12. Purpose of directions.-The purposes for which directions under Regulation 11 may be issued are the following, namely - (a) directing the person concerned not to deal in securities in any particular manner; (b)requiring the person concerned to call upon any of its officers, other em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consideration received by the Stock Exchange it was a direction to the petitioner not to sell his securities above that price. As a corollary of this argument, it was further contended that if contention to this extent is acceptable then what happened to excess price received by the Stock Exchange is no concern of the petitioner and therefore issue of direction to pay the petitioner a part of the price received by the Stock Exchange should be deemed to be governed by clause (a) and rest of it namely impounding of the excess price received by the Stock Exchange to be invested in the investors protection fund is nobody's concerned least of it of the petitioner. 215. In the background of facts noticed above this contention of my opinion is not well founded. 216. Firstly clause (a ) read in isolation independent of the purpose of restoring status quo ante only refers to issuing directions in respect of dealing in securities subsequent to the issuance of directions and not before. Here, we are concerned with a case of making an order in respect of a transaction that has been completed even before any directives of the Board were received by the Stock Exchange, in respect of the deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned to dispose of any such security acquired in contravention of these regulations in such manner as the Board may deem fit. This provision in its clear term applies only to the securities acquired in contravention the regulations. In respect of securities acquired by a person concerned, he can be directed to dispose of it in a manner so as to restore status quo ante. The directives envisaged under clause (d) cannot go beyond these two limits. This also clearly envisages that pre-condition of this are as a result of contravention of any provisions of the Act, Rules or Regulations the person concerned has acquired some securities. 220. The person concerned only in that event can be directed to dispose of those securities in a particular manner, and that manner of disposal under the directions of the Board must be aimed at restoring status quo ante in respect of those securities. Obviously when the acquisition of securities and its disposal of such securities as per the directions to restore status quo is the basic requirement of clause (d) , one cannot accept the contention of Mr. Raval that the securities here must mean to include proceeds of securities. Securities have been d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghts in such proceeds right to which has vested in him. Such direction cannot be considered to be a direction to deal with proceeds by the person concerned but amounts to exaction of money by the Board. Direction to deal with envisage something to be done by person concerned with the subject of direction to bring status quo ante but cannot be an authority exact money for itself. That is not a dealing with proceeds by person concerned. 223. I need not dwell much on clause (b) or (c) of regulation 12 inasmuch as neither it is the case of any of the learned counsel for the respondents nor it can be that the impugned directions could be covered under clause (b) and clause ( c). Clause (b) is applicable to the officers or other employees or representatives of the person concerned in clause (a) about whom a person concerned may be required to issue directions to them to refrain from dealing in securities in any particular manner and clause (c) relates to prohibiting the person concerned from disposing of any of the securities acquired in contravention of these regulations at all. Obviously, the two provisions have nothing to do with the authority of the Board in issuing directions to im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of profits is authorised under any of the regulations referred to by the respondents. 226. Considering the act of impounding as a casual consequence of any breach of regulation the question may be viewed from yet another angle. 227. The statute itself has provided for penalties and transaction, for committing breach of the regulations. Section 24 makes contraventions or attempt to contravening the provisions of the Act, Rules or Regulations as offence punishable with imprisonment with fine and as provided under Chapter IV-A penalties for various contravantions of Act, Rules or Regulations. This makes it abundantly clear that so far as exercise of providing for incidental matters in achieving the objectives of the Act through the levy of penalty and imposing punishments for breaches of provision of Act, Rules and Regulations the Legislature itself has occupied the field by specifically providing for specific penalties and punishments for breach of Act, Rules or Regulations wherever it felt necessary. Therefore, power to impose penalty or punishment for breach of Regula-tion cannot be considered to be part of powers of the Board to take measures as it thinks fit for achieving it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 49(4) of the 1948 Act and in exercise of its power the Board would have to abide by regulation'. Exercise of executive power within the province of administrative discre-tion of the authority extends only to the extent the field is not occupied by statutory provision is well established by decisions of Supreme Court in Sant Ram Sharma v. State of Rajasthan AIR 1967 SC 1910 and State of Haryana v. Shamsher Jang Shukla AIR 1972 SC 1546. On this view of the issue also the Board is not entitled to act beyond the sphere circumscribed by the provisions of Regulation, 1995 in the matters connected therewith. 230. It was also urged in the alternate that the impounding of such amount is not by way of penalty or punishment, but a measure to stablise the market condition by depriving the person concern of his profit, which the SEBI considers to be unduly high due to abnormal market condition, to give a message to dealers to refrain from operating with abnormal market condition. This, according to Board's counsel need not be in respect of any person, concerned with prohibited practices but irrespective of that. 231. If the action of depriving a person of his consideration that has ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not get undue or ill gotten profits arising out of rigged/manipulated price. Reach of the order, is clearly intended to curb the extent of profits that are earned by a party to transaction. Likewise in Special Civil Application No. 5483 of 1996 though order of Board does not say anything like that, the Central Government in its appellate order speaks that while in the normal course the purpose of investment is to make financial gains, when the conditions prevalent are abnormal the denial of windfall profits can hardly be described as dencal of a right because such gains can only be made at the expense of another. It is SEBI's obligation to ensure that its dispensation are equitable between the various parties on market. In reply affidavit also in para 10.4 it has been unequivocally stated that the direction only deprive the windfall profit arising out of manipulated market and is not a measure of penalty. 234. The order and averments are clearly indicative that they are directed to deprive the petitioners of the profit, which are considered abnormal, though right to make gains at market is granted. Thus in spite of all contentions to contrary it must be accepted that the acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but amounted to tax or fee. So also in State of Madhya Pradesh v. Ranojirao Shinde AIR 1968 SC 1053, the court drew the distinction between deprivation of property and taxing powers and held that power under article 31 cannot be utilised for enriching the coffers of the State. 236. The purpose of the aforesaid discussion about Board's authority to take legislative measures is confined to question whether there exist authority of law for the Board to make the order like the impugned order which result in deprivation of property and not to declare on validity or otherwise of any law that may be made in future. That will have to be tested on its own strength within the constitutional precincts, as and when occasion for the same may arise. 237. As a result of aforesaid discussion, it must be held that the Board had no authority under any provisions of the Act, Rules or Regulations under which it functions to impound whole or any part of consideration of a completed transaction to which the person entitled to receive consider- ation have acquired right to claim. Natural Justice 238. The orders have been challenged on the ground of having been made in breach of principles of natural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elled without affording an opportunity of hearing to the affected students or candidates. Particular reliance was placed on Union Territory of Chandigarh v. Dilbagh Singh AIR 1993 SC 796; Krishan Yadav v. State of Haryana AIR 1994 SC 2166; Union of India v. Anand Kumar Pandey AIR 1995 SC388 and alternatively it was urged that at any rate the Board is prepared to give post decisional hearing now therefore illegality, if any, in the procedure adopted by the Board in making the impugned orders may be permitted to be cured by affording post decisional hearing. Reliance was placed on the Supreme Court decisions in Mohinder Singh Gill v. Chief Election Commissioner 1978 (1) SCC 405; Mrs. Maneka Gandhi v. Union of India 1978 (1) SCC 248; Olga Tellis v. Bombay Municipal Corpn. 1985 (3) SCC 545 and Charan Lal Sahu v. Union of India AIR 1990 SC 1480. 240. So far as the first contention of the respondents is concerned, it is sought to be supported on the principle which has been applied to cancellation of examinations or selections en masse in a case of mass scale illegality or irregularity having been noticed in the conduct of such examination without affording an opportunity of personal he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bear the brunt. Under these circumstances, the Tribunal was right in not issuing notice to the persons who are said to have been selected and given selection and appointment." The case is on par with Krishan Yadav (supra) . 244. Another case relied on by the Counsel Hanuman Prasad v. Union of India JT 1996 (8) SC 510 was also a case where examinations/selections were cancelled after perusal of CBI report disclosing mass scale malpractices in writing examinations. As in Dilbagh Singh's case (supra) the Court held that selection committee recommendation do not give vested right or legitimate exception to candidates till they are appointed according to rules. 245. In fact transactions out of which sale proceeds have reached Stock Exchange are not tainted with any illegalities or irregularities. Transaction of squaring up the transactions by auction in Special Civil Application No. 2224 of 1996 has already taken place in accordance with the practice and bye laws of the Stock Exchange concerned, on invitation of concerned Stock Exchange before intervention by SEBI. Order does not deal with any transaction prior to auction. No illegality or irregularity has been attached to that act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensure that a statutory authority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power. The rules of natural justice can operate only in areas not covered by any law validly made. The general principle as distinguished from an absolute rule of uniform application is that where a statute does not in terms exclude this rule of prior hearing but contemplates a post-decisional hearing amounting to a full review of the original order on merits then such a statute would be construed as excluding the audi alteram partem rule at the pre-decisional stage. If the statute conferring the power is silent with regard to the giving of a pre-decisional hearing to the person affected the administrative decision after post-decisional hearing was good." (p. 1486) 248. It offers answer to both the contentions of the learned counsel for the respondent for excluded of need of hearing and the offer of post decisional hearing to cure the defect. The principle that post decisional hearing in certain circumstances can cure the defect of not affording a pre- decisional hearing applied in the case of Mohinder Singh Gill ( supra) and Mrs. Maneka Gandhi's c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on notwithstanding emergent nature of action required to be taken. It was also taken to be well settled that rules of natural justice are not inflexible and can be moulded being sufficiently flexible to permit modifications and variations to suit exigencies of myriad kinds of situation which may arise. In the circumstances of emergent nature of taking action in impounding passport to prevent a person from leaving country the Court countenanced post decisional hearing a proper compliance of the rule of audi alteram partern. It said, "it would not be right to conclude that the rule is excluded merely because the power to impound a passport might be frustrated if prior notice and hearing were given to person concerned. The passport authority may impound the passport without giving any prior opportunity to the person concerned but as soon as the order impounding the passport is mode an opportunity of hearing remedial in aim should be given. 253. It may be noticed that it was a case in which there was no specific statutory requirement of pre-decisional hearing and the court has coun-tenanced post decisional hearing, not as a rule, but only in exceptional circumstances like the one wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power is likely to fail. That too in cases where the rule of natural justice are required to be followed as an inherent ingredient of fair play and not as a part of statutory requirement. All the cases relied on by the respondent are cases where the need to adhere to principles of natural justice was read into requirement to act with reasonableness even in the absence of any statutory requirement. Also the Court did not permit the prehearing to be an easy causality. However, none of the cases, lay down that even where statute requires pre-decisional hearing the authority can insist on post decisional hearing to cure initial defect. Even in the case of Union of India v. Tulsiram Patel AIR 1985 SC 1416, the Court read requirement of post decisional hearing where the natural justice was held to have been excluded in cases covered by proviso to article 311(2). 256. Under section 11B to which power to issue directions are traced empowers the Board to issue directions only on it being satisfied about the conditions referred to in the provision, as a result of making or causing to be made an enquiry. The very fact that before issuing directions an enquiry is required to be made and concl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances of the cases under consideration and it is held that in the present cases, post-decisional hearing cannot cure the invalidity attached to the impugned orders having been made for want of adherence to principles of natural justice. 257. It cannot be doubted that post decisional hearing itself is fraught with danger of inherent unfairness of procedure and can be resorted to only in exceptional circumstances. Ordinary rule of natural justice, whether under statute or on general principle is that an opportunity to be heard is intended to be afforded to the person who is likely to be prejudiced when the order is made before making the order. Post decisional hearing is only a substitute of pre-decisional hearing in cases where requirement of hearing is not part of express provision of statute, in very emergent and exceptional circumstances. 258. In this connection reference may be made to K.I. Shepherd v. Union of India 1987 (4) SCC 431 wherein services of employees were terminated without opportunity of hearing, when rules required such hearing to be precondition. A learned Single Judge of Kerala High Court proposed a post decisional hearing R.N. Mishra, J. speaking for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring; instead of fair trial followed by appeal, the procedure is reduced to unfair trial followed by fair trial." 262. In Leary v. National Union of Vehicle Builders 1971 Ch. 34 Megarry, J. said: "If one accepts the contention that a defect of natural justice in the trial body can be cured by the presence of natural justice in the appellate body, this has the result of depriving the member of his right of appeal from the expelling body. If the rules and the law combine to give the member the right to a fair trial and the right of appeal, why should he be told that he ought to be satisfied with an unjust trial and a fair appeal? Even if the appeal is treated as a hearing de novo, the member is being stripped of his right to appeal to another body from the effective decision to expel him. I cannot think that natural justice is satisfied by a process whereby an unfair trial, though not resulting in a valid expulsion, will nevertheless have the effect of depriving the member of his right of appeal when a valid decision to expel him is subsequently made. Such a deprivation would be a powerful result to be achieved by what in law is a mere nullity; and it is no mere triviality that mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rating in the market, besides the fact whether the persons concerned are themselves responsible for the prevalent market conditions or not, since it has resulted in windfall profits, the parties who are entitled to receive such profits otherwise cannot be allowed to retain the same. This reason is very much apparent on the face of the impugned orders. If the matter rests with the correctness of the reasons alone, it would be for the appellate authority to examine its validity, wherever statutory appeals are provided against the order. But in such cases, the order cannot be attributed with the vice of absence of reason. The impugned action is impounding of the proceeds as a result of squaring up of the transactions, end of transaction period because of the reason that in the opinion of the Board prevailing prices are manipulated one should ensure for the benefit of anyone. Whether there is authority for taking such decision or not and whether such orders are otherwise lawful and sustainable are clearly different questions than to say that the impugned action is founded on orders which does not disclose the reasons for its making. However, the learned counsel for the petition are rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xact such enrichment by executive authority. 270. The principle of unjust enrichment has been applied where the money has already been recovered by the State authority under the existing provisions of law which may ultimately be held to be ultra vires and such money in fact is given circumstances may not belong to a person who has actually paid but belong to third persons who are entitled thereto or at whose cost he has become unjustly rich. It is in such cases or where tax is assumed to have been passed on to consumers or to the persons from whom actually the tax payer is assumed to have collected so that by retaining such amount there is no deprivation of the property of the person concerned by the State which is not authorised by law, inasmuch as an amount which is held not to be belonging to the claimant and who is claiming refund on the ground that he may be refund it to the actual claimants really do not result in depriving that person of anything which can be said to be a property of the claimant. 271. In State of Madhya Pradesh v. Vyankatlal AIR 1985 SC 901, the Court after referring to its earlier decisions in the cases STO v. Kanhaiya Lal Makund Lal Saraf AIR 1959 SC 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... just enrichment, and the retention by the statutory functionary in the public interest is counte- nanced only where the sum in question does not belong to the person from whom it has been recovered. 275. Circumstances of the present case reveals obvious lack of circum stances in which doctrine of unjust enrichment does not arise in this case at all. As has been noticed that the impugned orders in either cases does not impinge upon any act referable to any party in respect of the transactions in question as a result of which the alleged windfall profits have arisen to parties concerned. In Special Civil Application No. 2224 of 1996 at the close of period offer at auction was invited by the Stock Exchange. On the date when offer was invited, the market price prevailing during past six months was very well known to all concerned. The scrips were offered in pursuance of the invitation by the Stock Exchange had recovered the money from the purchasers and short sellers respectively as per the prices known on that date. It is not the case that such invitation by Stock Exchange was in any way part of manipulation. It was open to Stock Exchange not to intervene. Therefore, so far as the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce by Stock Exchange will not at all arise. Nor Stock Exchange receives such amount for itself. Nor it is anybody's case that amount impounded rightfully belong to short sellers. In the case of auction sale transaction of sell and purchase has actually taken place in which scrips of offerer has been sold by Stock Exchange at a particular price and recovered the same from those who were responsible to make the payment. To such amount the offerer could only be lawfully entitled to and none of the other parties involved viz., parties to outstanding transaction or Stock Exchange could lay any claim or for that matter the Board, could say that it was a profit belonging to someone else at whose expense the offerer of shares has been benefited. Since the impugned order nowhere impinges upon the directions as a result of which the sale proceeds or the different proceeds have reached the Stock Exchange the person concerned are entitled to get that consideration as a result of a valid transaction. In my opinion, without attacking the validity the said transaction on any ground whatsoever the proceeds or profits arising out of such transactions cannot be considered to be an undue or unlawful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the paramount repository of public interest and it does not want to return for individual benefit, which lawfully does not belong to him. It may be noticed that denying relief on principle of unlawful or unjust enrichment has been enunciated with respect to cases where a person has either collected taxes from persons which were not leviable or prices in excess of regulatory prices fixed under statutory orders, which lawfully otherwise did not belong to him, or was an illegal exaction in the hands of person himself. Where such amounts had already reached public coffers and a claim to such amount was laid on the ground that levy having been held to be unauthorised, the State has no power to retain it and the same may be returned to the person who has paid it into State exchequer, irrespective of the fact whether he himself is entitled to it or not. A distinct line of authorities have come in existence to deal with two situations. One where such proceeds are in the hands of recipient, there in the absence of specific provision of law, the claim of authority to recover the same has been repelled. On enacting such law, same has been upheld only in case it is falling in category of anc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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