K. SHIVASHANKAR BHAT, J.

( 1 ) THE petitioner challenges the guidelines dated 9. 4. 1990 (Annexure A) issued by the Central Government read with the Press Release dated 12. 11. 1990 (Annexure B) issued by the 3rd respondent (SEBI), as well as the Press Note dated 11. 3. 1991 (Annexure C) issued by the Union of India, which purport to regulate the business of Merchant Banking.

( 2 ) PETITIONER is an Advocate and adm ittedly "engaged primarily in advisory and con - sultancy work in areas relating to issue of capital by Public and Private Companies". The nature of the advisory work is explained in para 4 of the writ petitioner, which indicates that the said work is mostly the work performed by any Advocate. Though the petitioner asserts that his activities are commonly and popularly known as "merchant Banking" activities, it seems to me, that these activities do not exhaust the activities of "merchant Banking", because the activities of the petitioner do not cover any kind of "underwriting" or "portfolio management". His activities, are the activities of a "legal advisor .

( 3 ) ANNEXURE a (Press Release dated 9. 4. 1990 issued by Government of India) bears the hearing "banking Guidelines for Merchant Bankers". Para I states that any person to engage in the business of merchant banking would need authorisation by the SEBI. This requirement has to be meteven by the managers , consultants or advisors to issues. Authorised Activities are enunciated in para 2. Para 3 requires all merchant bankers to perform with high standards of integrity and fairness. A code of conduct for merchant bankers will be prescribed by SEBI and within this context SEBI s authorisation criteria would take into account mainly - (a) Professional competence; (b) Personnel, their adequacy and quality, and other infrastructure) Capital adequacy; (d) Past track record. experience, general reputation and fairness in all their transactions. Para 4 (a) requires all merchant bankers to obtain authorisation from SEBI within three months from the issue of these guidelines. Petitioner is very much aggrieved by para 4 (b), (d) and (h) which read thus:-

"4. TERMS OF AUTHORISATION.- (b) All merchant bankers must have a minimum net worth of rupees one crore. (d) SEBI may collect from the merchant bankers an initial authorisation fee, an annual fee and a renewal fee. (h) To ensure a direct stake of merchant banker (s) in the issue managed by them. lead managers would be required to accept aminimum 5 per cent underwriting obligation in the issue subject to a ceiling. Details in this regard will be prescribed by SEBI. "

( 4 ) ANNEXURE B issued by SEBI refers to the "new SEBI norm for merchant banking". It refers to the requirement of the minimum worth of first category of merchant bankers to be Rs. One crore. Second category is of those whose minimum worth is to be Rs. 50 lakhs. The third category consists of those who can act as advisors on consultants and their minimum worth is to be Rs. 20 lakhs and they have to pay an initial fee of Rs. I lakh.

( 5 ) ANNEXURE c issued by the Central Government, requires inter alia that the Registrar of Companies have been advised to ensure that in respect of every prospectus of public issue which comes up for Filing with the Registrar, the merchant bankers to the issue, whether as lead managers, co-managers, advisors or consultants, are only those currently authorised by SEBI.

( 6 ) PETITIONER has filed Annexure d which is a prospectus relating to the public issue of a company, wherein he is shown as a legal advisor . The issue was to open on 11. 2. 1991. While advisors totheissue are S. S. Kothari and Co. against the legal advisors, name of the petitioner is shown.

( 7 ) THE above prospectus illustrates the different terms and activities referred in the impugned guidelines . The several activities represented by different functionaries are (1) Lead Managers to the issue; (2) Managers to the issue; (3) Advisors to the issue; (4)

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