RESPONDENT: SECURITIES & EXCHANGE BOARD OF INDIA & ORS. . DATE OF JUDGMENT: 01/02/2001 B.N.Kirpal, N.S.Hegde JUDGMENT: L.....I.........T.......T.......T.......T.......T.......T..J SANTOSH HEGDE, J. Writ petitions questioning the validity of Regulation 10 of the Securities & Exchange Board of India (Stock Brokers and Sub brokers) Regulations, 1992 read with Schedule III thereof as also letters dated 7th of November, 1992 and 7th of January, 1993 issued by the Securities & Exchange Board of India (SEBI) were filed in various High Courts in the country. On a transfer petition for consolidating these cases being filed before this Court by respondent No.1, this Court by its order dated 10th of December, 1999 directed that one such Writ Petition © No.126/1993 pending before the Bombay High Court be transferred to this Court. By the said order, this Court also stayed other proceedings pending in the other High Courts but gave liberties to the concerned parties to file intervention application in the above transferred case. On 31st of January, 1992, the President of India in exercise of the powers conferred upon him by Article 123(1) of the Constitution of India was pleased to promulgate the Securities & Exchange Board of India Ordinance, 1992. This Ordinance was subsequently replaced by the Securities & Exchange Board of India Act, 1992 (the Act). The Act was given retrospective operation w.e.f. 30th of January, 1992. Section 3 of the Act provided for the establishment of Securities & Exchange Board of India (SEBI) while Section 4 provided for SEBIs Management Board (the Board). On 10th of April, 1992 on behalf of the Board, a letter was addressed to the Presidents and Executive Directors of all the recognised Stock Exchanges whereby the members, stock brokers of all the recognised Stock Exchanges in India were called upon to submit their applications to the Board for the purpose of registration in accordance with Section 12(1) of the Act. The said letter which enclosed a pro forma of the application for registration of stock brokers required fees to be paid by applicants for registration on the following basis: Registration Annual Fees Fees (Rs.) (Rs.) Category A 5 Lakhs 10.000 Category B 3 Lakhs 5.000 Category C 1 Lakh 4.000 Category A: Stock Brokers who are or will be members of Bombay, Delhi and Calcutta Stock Exchanges. Category B: Stock Brokers who are or will be members of Bangalore, Cochin, Madras and Ahmedabad Stock Exchanges. Category C: Stock Brokers who are or will be members of other stock Exchanges. This demand of the Board led to a nationwide agitation of stock brokers which resulted in the closing down of Stock Exchanges throughout India for several days. The issue which gave rise to this agitation was the high registration fee sought to be levied by the Board for the purpose of registration. Succumbing to the pressure of this agitation the Board on 19th of April, 1992 issued a revised fee structure for registration of brokers giving two options as below : OPTION A: One time registration fee may be payable by the members in 5 annual instalments under this Option as follows: For Group A exchanges viz. Bombay, Delhi and Calcutta at Rs.50,000 per year for 5 years. Rs.2.5 lakhs For Group B exchanges viz. Madras, Ahmedabad, Bangalore and Cochin at Rs.30,000/ per year for 5 years. Rs. 1.5 lakhs For other exchanges at Rs.10,000/ Per year for 5 years. Rs. 50,000/ OPTION B: One time registration fee may be payable by the members under this Option as follows: Fee @ of 1% of the annual turnover of each broker for 5 years from 199091. This fee will be uniform for all exchanges. The registration fee will include fee for registration as underwriters also. During the 5 years period there will be no annual fee. Each exchange may choose either Option A or Option B and collect fees accordingly from all its members and sent their applications forms to SEBI within the date stipulated already. The one time registration fee for subbrokers will be uniform at Rs.5,000/. In additi