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TMI Blog2009 (7) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... r mutual contract. The scheme enforces and provides that there will be no entry load for all mutual funds. SEBI is an expert body, which is entitled to regulate the market and has now issued circular dated 30-6-2009. In economic matters and matters relating to finance, courts are reluctant to interfere unless clear violation of Article 14 is made out. Appeal dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... tock exchanges and any other securities markets; (b)registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner; [(ba)registering and regulating the working of the depositories, [participants,] custodians of securities, foreign institutional investors, credit rating agencies and such other intermediaries as the Board may, by notification, specify in this behalf;] (c)registering and regulating the working of [venture capital funds and collective investment schemes],including mutual funds; (d)promoting and regulating self-regulatory organisations; (e)prohibiting fraudulent and unfair trade practices relating to securities markets; (f)promoting investors' education and training of intermediaries of securities markets; (g)prohibiting insider trading in securities; (h)regulating substantial acquisition of shares and take-over of companies; (i)calling for information from, undertaking inspection, conducting inquiries a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2A); (v )issuing commissions for the examination of witnesses or documents.] (4) Without prejudice to the provisions contained in sub-sections (1), (2), (2A) and (3) and section 11B, the Board may, by an order, for reasons to be recorded in writing, in the interests of investors or securities market, take any of the following measures, either pending investigation or inquiry or on completion of such investigation or inquiry, namely:- (a )suspend the trading of any security in a recognized stock exchange; (b )restrain persons from accessing the securities market and prohibit any person associated with securities market to buy, sell or deal in securities; (c )suspend any office-bearer of any stock exchange or self-regulatory organization from holding such position; (d )impound and retain the proceeds or securities in respect of any transaction which is under investigation; (e )attach, after passing of an order on an application made for approval by the Judicial Magistrate of the first class having jurisdiction, for a period not exceeding one month, one or more bank account or accounts of any intermediary or any person associated with the securities market in any manner involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Under section 11(2)(b), SEBI has the power to regulate and control the working of the intermediaries like the distributors. It is difficult to accept that under section 11(2)(b) SEBI can regulate the working of stock brokers, sub-brokers, intermediaries only if they are registered and not unregistered intermediaries like distributors. The power conferred under section 11(2)(b) upon SEBI relates to both registration as well as the regulation. It is not possible to accept the contention that without registration of distributors, SEBI cannot control or regulate their working. 6. The second contention raised by the learned counsel for the petitioners is that the circular infringes Articles 19(1)(g) and 21 of the Constitution of India as the petitioner's right to carry on trade and livelihood is violated. The contention has no merit. There is no prohibition in the circular which prevents the petitioners for carrying on trade and earn livelihood as a distributor. The petitioners are at a liberty to interact with the investors and fix the amount payable to them by the investor as per mutual contract. The petitioners have not been prohibited or barred from acting as distributors. 7. Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be no entry load for all mutual funds. SEBI is an expert body, which is entitled to regulate the market and has now issued circular dated 30-6-2009. In economic matters and matters relating to finance, courts are reluctant to interfere unless clear violation of Article 14 is made out. Sufficient latitude and play in the joints is required. In the case of R.K. Garg v. Union of India [1981] 4 SCC 675, it was observed as follows : "8. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J. that the Legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the Legislature. The court should feel more inclined to give judicial deference to legislative judgment in the fiel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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