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TMI Blog2007 (10) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... and Sub-Brokers) Rules and Regulations, 1992 (for short "the Rules & Regulations of 1992"). The facts are taken from Civil Appeal No. 2565 of 2005. Although in the writ petition several other points were also taken but at the time of argument before the High Court, the learned counsel appearing for the writ petitioners confined his submissions to the question of vires of the rules and regulations only. 3. Principal challenge to the Rules & Regulations of 1992 is based on the contention that the Rules & Regulations were not laid before each Houses of the Parliament as mandated by section 31 of the Securities and Exchange Board of India Act, 1992 (for short "the Securities and Exchange Act") . It will therefore be essential to reproduce section 31 of the said Act as the entire argument is placed on the requirement of the said section. Section 31 reads as under : "Rules and regulations to be laid before Parliament.-Every rule and every regulation made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court to this Court while staying the other cases pending before the various high courts. After hearing the said case, this Court upheld the vires of Regulation 10 of SEBI Regulation as well as the levy of turnover fee. This Court while deciding the said case, had also taken into consideration the 'Bhatt Committee report' which had been submitted by an expert committee constituted by SEBI to examine the issue of turnover fee. This is BSE Brokers Forum v. SEBI [2001] (3) SCC 4821. On the basis of the judgment rendered by this Court, all other similar writ petitions pending in the various high courts were disposed off. Having failed in their challenge to the levy of turnover fee, the brokers and sub-brokers have been repeatedly filing petitions on one or other grounds while their actual grievance is the turnover fee imposed by the Regulation 10 which has been upheld by this Court. In the writ petition from which the present appeal arises, similar attempt has been made. 6. In the present case, rules and regulations in question were laid on the table of the Lok Sabha on 27-11-1992 while on the table of the Rajya Sabha on 16-12-1992. The copies of the proceedings in both the Houses s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case. Wherever the period required to be completed under the statute under which a rule or regulation may have been framed has to be completed in one session only, sub-clause 2 of rule 234 would not apply. In the present case, the rules and regulations in question have been framed under section 31 of the SEBI Act. The said section of the SEBI Act clearly provides that the requisite period of 30 days for which a rule or regulation framed under the Act is required to be laid before the Houses may be completed in one session or in two or more successive sessions. It further provides that if both the Houses agree to make any modification or reject the said rule/regulation then the rule/regulation would be enforced in the said modified form or would be annulled in accordance with the decision of the Houses. 10. In addition to the above, rule 234 of Rules of Procedure of Conduct of Business in Lok Sabha has been further clarified in para 2.4 of the Book of Parliamentary Procedure Volume 2, page 1701 where it has been clearly stated as under :- "2.4 Where a statute provides that the Rule framed thereunder should be laid on the table for a certain period which may be compris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of section 31 of the SEBI Act has been met with, the rules and regulations in question cannot be declared ultra vires on this ground. 13. This apart the issue relating to the laying down of rules/regulations on the table of the Houses for the period provided under the statute under which they are so framed has been dealt with by this Court in various cases. Some of these cases are Jan Mohammad Noor Mohammad Bagban v. State of Gujarat 1966 (1) SCR 505, Atlas Cycle Industries Ltd. v. State of Haryana [1979] 2 SCC 196, Hukum Chand v. Union of India [1972] 2 SCC 601, and Bank of India v. O.P. Swarnakar [2003] 2 SCC 721. In a recent judgment, this Court followed the view taken in Atlas Cycle Industries Ltd.'s case (supra) and Prohibition & Excise Superintendent v. Toddy Tappers Cooperative Society [2003] 12 SCC 738. 14. In all these cases, the issue relating to laying down and interpretation of the said regulation was examined. It has been held in all these cases that the laying of the rule before both the Houses of Parliament is merely a directory rule and not mandatory. In the case of O.P. Swarnakar (supra), the provision providing for laying the rules before the Legislative was e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing down of the rules before the Parliament could not be a ground to declare the rules/regulations framed under the statute as ultra vires. 16. Although in the present case the rules were laid before both the Houses as required under section 31, as discussed in the earlier paragraph of the judgment but even if it is assumed that the rules/regulations in question did not complete the requisite period of 30 days, the provisions of section 31 of the SEBI Act not being mandatory and merely directory, as has been held by this Court in the aforementioned cases, the rules/regulations cannot be held to be ultra vires on the ground of non-completion of 30 days period after laying of the rules before both the Houses of Parliament. 17. Respondents with their reply have placed on record the three judg-ments of Delhi High Court in CWP No. 2942 of 2003 dated 18-9-2002, CWP No. 6920 of 2003 dated 3-11-2003 and CWP No. 2876 of 2001 dated 22-2-2002, wherein a challenge was raised to the rules and regulations under challenge was rejected. Counsel for the appellant appearing before us had also appeared before the Delhi High Court in the said writ petition. In CWP No. 6920 of 2003, counsel who is ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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