SAURIN T PARIKH Vs. SHAH INVESTMENT STOCK EXCHANGE

JUDGEMENT

(1.) Heard Mr. Divan in support of this petition. Mr. Mody appears for the Bombay Stock exchange, which is respondent No. 1 as well as investor Protection Fund, which is respondent no. 2. The Petition seeks an order to set aside the order dated 25th May 2005 passed by the 1st respondent and seeks an order directing the Stock exchange to give further opportunity to the petitioner.

(2.) The facts leading to this Petition are as follows:- the petitioner is claiming the amounts on account of one Kantilal Mangaldas Securities (P) ltd. becoming a defaulter. The petitioner obtained an Award before the Arbitrators of the stock Exchange wherein this defaulter conceded the claim. The petitioner's case is that therefore the petitioner is entitled to the amounts held due and they be released from the Investor Protection fund. The Stock Exchange declined to accept this request by its letter dated 22nd February 2005 on the ground that the client code mentioned on the contract notes issued by the default member was not matching with the trade files of the Exchange. An Appeal was preferred and it came to be rejected by the impugned order dated 25th May 2005. The order states that the written submissions made by the petitioner were considered and the Committee has upheld the decision.

(3.) Mr. DIVAN, learned Counsel appearing for the petitioner, submits that in view of the guidelines framed by SEBI, the amount had to be released from the Investor Protection Fund. He further submits that SEBI has issued a circular dated 28th October 2004 under the power available under Section 11 (1) of the Securities and Exchange board of India Act, 1992 and a mechanism is created under these guildelines. A claim is permitted to be filed under these guidelines and since the claim was filed, the Stock Exchange had to honour the Award given by the Arbitrators.