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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 ..... Nikilesh Ramachandran for the Respondent. JUDGMENT Ashok Bhan, J. - This judgment shall dispose off Civil Appeal No. 2565 of 2005 directed against the judgment of the High Court of Bombay in Writ Petition No. 1414 of 2004 dated 29-6-2006 and Civil Appeal No. 7574 of 2005 directed against the judgment of the High Court of Uttaranchal at Nainital in Civil Misc. Writ Petition No. 606(M/B) of 2002 dated 17-10-2003. The point involved being the same, the appeals are disposed off by a common order. 2. By the impugned judgments, the High Court of Bombay and Uttaranchal have upheld the vires and constitutionality of SEBI (Stock Brokers 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 ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, any such modification or annulment shall be without prejudice to the validity of any act previously done under that rule or regulation. 5. Before proceeding further, it may be mentioned that under Regulation 10 of the SEBI Act, 1992, the Registration fee is levied on the annual turnover of the stock brokers and sub-brokers. Levy of turnover fee as well as the vires of Regulation 10 was challenged in different high courts by filing writ petitions soon after the said regulation came into force. In a transfer petition filed by the SEBI before this Court for consolidating the said cases, this Court had transferred one such petition from the Bombay High 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 482 1 . On the basis of the judgment rendered by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Constitution or of Legislative functions delegated by parliament to a subordinate Authority is laid before the House, the period specified in the Constitution or the relevant Act for which it is required to be laid shall be completed before the House is adjourned sine die and later prorogued unless otherwise provided in the constitution or the relevant Act. (2)Where the specified period is not so completed, the regulation, rule, sub-rule, bye law etc. shall be re-laid in the succeeding session or sessions until the said period is completed in one session." 9. From the perusal of the above mentioned rule, it is clear that Rule 234(1) is applicable in the facts and circumstances of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n further clarified by the Rajya Sabha Secretariat in its letter dated 9-10-2002 wherein the Secretariat has clarified that in the case of rules and regulations in question under section 31 of the SEBI Act, no relaying was necessary as the statute permitted the requisite period of 30 days to be completed in one or more sessions and therefore, the rules/regulations in question after having been initially laid are deemed to lie in the succeeding sessions till the specified period is completed. Besides this the Ministry of Parliamentary Affairs vide its letter dated 9-10-2002 further clarified that no modification/rejection of the regulations and rules in question was done by either House. The requirement 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 Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be different. This aspect of the matter has been considered by this Court in High Court of Judicature for Rajasthan v. P.P. Singh and Anr . 2003 (4) SCC 239 stating : (SCC p. 255, para 40). 40. When an approval is required, an action holds good. Only if it is disapproved it losses its force. Only when a permission is required, the decision does not become effective till permission is obtained. [ See U.P. Avas Evam Vikas Parishad and Anr. v. Friends Coop. Housing Society Ltd. and Anr. [1995] Supp (3) SCC 456], In the instant case both the aforementioned requirements have been fulfilled. " 15. It was observed that provision was merely directory and not mandatory and even if the rules were not laid before the House at all even then the non-compliance with the laying 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 ..... 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