A full-time member of the market regulator has powers to cancel the recognition granted to a stock exchange, the Supreme Court has held in the case of Saurashtra Kutch Stock Exchange vs Sebi. In this case, the full-time member of Sebi had directed withdrawal of recognition granted to the erstwhile Rajkot-based SKSE under the Securities Contracts (Regulation) Act, 1956. It had also directed that the trading members shall cease to be its trading members and, therefore, liable to be de-registered as stock brokers. Besides, their certificates of registration granted by Sebi shall also stand automatically cancelled, the member had stated in its order. However, the Securities Appellate Tribunal, on appeal, upheld Sebis order that withdrew recognition to the stock exchange a day before the due date of renewal that is July 9, 2007, on grounds of misappropriation of funds by the management. The tribunal had dismissed the erstwhile exchanges plea on the ground that the exchange was not been functioning for past several years and no trading had taken place on its platform. This was challenged before the apex court by SKSE, which alleged that the single member of Sebi had no power to pass order of cancellation or withdrawal of recognition and only the full Sebi board could do that. The Supreme Court rejected the erstwhile stock exchanges plea that it was providing services to a large number of investors in Saurashtra and Kutch, and had been dealing in securities since 1989.
Awarding interest on interest
Does an arbitral tribunal have the authority to award interest on interest from the date of the award The issue, which was raised in the case of M/s Hyder Consulting (UK) Ltd vs Chief Engineer, Odisha, has been referred to a larger bench of three judges after a two-judge bench noted divergence of opinion among several of the apex courts earlier judgments. The Orissa High Court in this case had relied upon a Supreme Court judgment in State of Haryana and Others vs SL Arora & Company while quashing the 2009 order of a district judge on the arbitration award. However, senior counsel CA Sundaram, appearing for the UK firm, argued that the high court decision was wrong as it was against Section 31(7) of the Arbitration and Conciliation Act, 1996 and a series of judgments of the Supreme Court (Oil & Natural Gas Commission vs MC Clelland Engineers SA, Central Bank of India vs Ravindra and Others) that do not authorise and enable arbitral tribunals to award interest on interest from the date of the award. Now the case will be heard for settling the differences after the Chief Justice of India will set up the bench.
Taxing data processors
The Supreme Court has asked the central excise appellate tribunal to reconsider the cases of Vinitron Electronics and D-Link India on the question of the classification of add-on cards and motherboards for the purpose of duty liability under the Central Excise Act, 1944. Setting aside the set aside the order passed by the tribunal, it said that the tribunal was expected to understand the factual scenario with regard to the goods whose classification had fallen for their consideration before applying the law on the issue. The tribunal without scrutinising the nature and character of add-on cards and motherboards in the functioning of Automatic Data Processing Machine and other machines had held that these products are to be classified under a tariff sub-heading no 8473.00, which attracted higher duty. The adjudicating authority had confirmed the departments order asking the assessee to pay the differential duty as the goods attracted higher duty. This was challenged by the assessee which contended that duty was payable at 15%, but the Revenues stand was that it should at 25%.