Supreme Court restrains Sebi from action against broking firm

The Supreme Court has restrained market regulator SEBI from suspending for 15 days the registration of stockbroking firm Mehta Vakil & Co after the company was charged with violating stock market regulations.     

A Bench headed by Justice Markandey Katju has told SEBI not to enforce till July 8 its (the apex court's) earlier judgment (by another Bench) that ruled that it is mandatory under law to suspend the broking firm's registration for 15 days for the violation. It had also issued notice to SEBI.     

Mehta Vakil & Co has sought a review of the apex court's ruling, delivered by another Bench on April 4 this year, on the grounds that the judgment was on the assumption that the suspension is the only penalty possible and there are no powers under law to impose monetary penalty.     

The firm further said that the transactions in question related to the 13 months between December 1998 and January 2001, when monetary penalty instead of suspending registration could have been imposed.     

Alleging that the provisions considered by the apex court did not apply during the period under consideration, the review petition said that the firm will lose overseas clients due to the stigma on its career of more than 50 years because of the impugned judgment.