In regard to the
aspect of ‘’definition’ of certain crucial terms used,
the specific doubt raised is on the question whether such definitions are to be taken as ‘inclusive’
or exhaustive’ .
On the first blush, one’s
sporadic reaction is the
one has the following
points to make
Meaning of “trading”
The term “trading” has been defined in Para 2(l) of the
Regulations, in the following manner:
(l) "trading" means and includes subscribing,
buying, selling, dealing, or agreeing to subscribe, buy, sell, deal in any
securities, and "trade" shall be construed accordingly;
The definition carries elements of an exhaustive
definition, which is apparent from the use of the expression “means” – therefore,
it is unclear if the definition can be extended to cover what is not explicitly
covered in it.
The term “trading” has been defined in Para 2(l) of the
Regulations, in the following manner:
(l) "trading" means and includes subscribing,
buying, selling, dealing, or agreeing to subscribe, buy, sell, deal in any
securities, and "trade" shall be construed accordingly;
- Halsbury's Laws of England[3]defines
sale as –
"Sale is the transfer of the ownership of a thing
from one person to another for a money price. Where the consideration
for the transfer consists of other goods, or some other valuable consideration,
not being money, the transaction is called exchange or barter; but in
certain circumstances it may be treated as one of sale. The law relating to
contracts of exchange or barter is undeveloped, but the courts seem inclined to
follow the maxim of civil law, permutatio vicina est emptioni, and to deal with
such contracts as analogous to contracts of sale. It is clear, however, that
statutes relating to sale would have no application to transactions by way of
barter."
The words “buying” and “selling” are generally clear and
unambiguous. In case of “sale”, there is a transfer of property, along with
other features. According to Benjamin,[1]
to constitute a valid “sale”, there must be a concurrence of the following
elements –
1. Parties competent to contract;
2. Mutual assent;
3. A thing, the absolute or general property
of which is transferred from the seller to the buyer;
4. A price in money is paid or promised.
Pledge and mortgage:
A mortgage is defined in Section 58 of the Transfer of
Property Act, 1882 to mean the following –
(a)
A mortgage is the transfer of
an interest in specific immoveable property for the purpose of securing the
payment of money advanced or to be advanced by way of loan, an existing or
future debt, or the performance of an engagement which may give rise to a
pecuniary liability.
Therefore, the word “deal” may include any form of a
transaction which parties may conduct in course of trade practices. Thus, the
expression “deal” obtains a contemporaneous meaning, including within its sweep
each of the different types of ways in which parties may, in course of trade,
“deal” with a particular object. For example, the context in the present case
is securities. So, securities may be sold, pledged, mortgaged, or may be the
subject matter of a securities lending transaction, or securities ready-forward
trade, etc.
<<<<<<<
At best, as viewed, it makes for a mixed bag of confusing and intriguing source for prolonged thoughts. This is prima facie an area over which even angels may not venture to tread any comfortably; and most certainly not in the remote hope of arriving at a satisfactory or even self-satisfying conclusion. For an appreciation of the rationale , if not 'wisdom', behind such a reaction, attention may be drawn to the pretty long line of / volumes of reported cases in which the aspect of 'interpretation' of words and terms used in any law made by humans,-you name it- regardless of the level of 'IQ' or 'EQ' of its makers.
As legislative history bears out, the task of independently reading and understanding by any one concerned, even legal luminaries being no exception' , more so the more difficult task of interpretation entrusted to judiciary has always proved so formidable as to have left with no plausible solution. To add to the complication, the recent innovation of 'deeming' concept, - which has been increasingly reported to and attempted even amending the basic national charter incredulously calls for a pointed mention.
< Pending to EDIT
[The following guest post is contributed by Vinod Kothari and Abhirup Ghosh of Vinod Kothari & Co.
Conclusion
SEBI’s Guidance Note creates an unwarranted confusion
about pledges, and this series of posts has tried to align understanding
pertaining to pledges in different scenarios.
Key Note: Not Unrelated >
http://vswaminathan-swamilook.blogspot.in/2015/09/zen-treasure-hunt.html
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