LAWS(BOM)-2016-8-224

VSM DIAMONDS PVT LTD Vs. BHARAT DIAMOND BOURSE

Decided On August 16, 2016
Vsm Diamonds Pvt Ltd Appellant
V/S
BHARAT DIAMOND BOURSE Respondents

JUDGEMENT

(1.) A. BACKGROUND

(2.) Given the nature of the arguments before me, I think it is best to set out first the reliefs sought in the Notice of Motion:

(3.) Mr. Chinoy's case, as I understand it, is that the Defendant's impugned decision is a usurping of a judicial function, one that is the sole preserve of a court. It has the effect of shutting the Plaintiffs out of business altogether. There is, he says, a violation of fundamental canons of natural justice: the order was without a proper hearing or notice. The Defendant is a dominant body that exercises substantial control over the entirety of the trade. It is, therefore, a trade regulatory body that purported to exercise an adjudicatory function. The ban imposed is permanent, and therefore unfair and unjust. It is not a mere suspension. The Defendant is, he submits, a trade regulatory body that purported to exercise an adjudicatory function and took direct action that, in turn, had a direct adverse impact. This coupled with the Defendant's dominance over the trade makes its action susceptible to a form of intervention and redress by a civil court, even if this falls short of a judicial review standard. It is not merely a matter of affecting reputation, as might be the case if the Defendant was a private individual that took precisely the same action. There, the remedy might lie in tort. It is also not a question of damages for breach of contract. Even outside these two spheres of judicial interference, a civil court can afford relief. The test must be (a) of dominance by the association or trade body; and (b) whether it is shown that the Defendant is a dominant trade regulatory authority that exercises adjudicatory functions. If these tests are satisfied, then the Defendant's action is vulnerable as violating the principles of the natural justice and this allows a court to interfere and set aside the impugned action. If not, then of course the Plaintiffs must fail.