VINAY BUBNA Vs. STOCK EXCHANGE OF MUMBAI

JUDGEMENT

(1.) IN this Petition, the Petitioner has challenged the denial by the Mumbai Stock Exchange, Respondent No.1 herein, to amend/alter/delete its Rules 16 and 43 as demanded by the Petitioner on the ground that said Rules are against the law of INsolvency, unconstitutional, capricious and null and void.

(2.) THE important question of law which has arisen in this petition is that whether a membership of share broker of the Mumbai Stock Exchange amounts to his personal property or it is merely a personal privilege conferred on share broker by the Stock Exchange. THE petitioner is seriously contending that a membership card of a share broker is his personal property. In our view, the very same point had arisen before the Privy Council in the year 1932. More or less the same contentions were raised before the Privy Council. It was held in the Judgment in Official Assignee of Bombay v. K.R.P. Shroff & Ors., reported at AIR 1932 Privy Council 186, as follows :- "So soon as membership ceases, whether on resignation, death, as a result of misconduct, or for nonpayment of his subscription, all the interest of the member in the property of the Association is under the rules at an end." According to the Privy Council a member who has lost his membership for being a defaulter loses of interest both in the property of the Association and in his card. THE head note of the said Judgment is a complete ratio which is reproduced hereinbelow : "THE result in the case of a member of the Bombay Native Share and Stock Brokers' Association who has lost his membership for being a defaulter clearly enough is that he loses all interest both in the property of the Association and in his card. In such a case no interest is reserved in the defaulter's card except to members of the Association who have suffered by his lapse, or to the Association itself. This is the result of Rr. 18, 56, 57 and 62. THE defaulting member himself has no interest in the result of the sale provided for under these rules nor can be require a sale to be made. THE rules are there for the benefit of his "exchange creditors" and are doubtless enforceable at their instance. In the case of a defaulting member who is expelled from the Association no interest in his card remains in himself and so none can pass to his assignee whether his expulsion does or does not take place prior to the commencement of his insolvency. S.12, T.P.Act, has no application to the card of a member of the Association."

(3.) THE Petitioner appears to have addressed a number of letters to press his demand for amendment/alteration of the Rules 16 and 43 to the Stock Exchange as well as to the various concerned parties, including the S.E.B.I. THE petitioner, however, did not succeed in his efforts to get the Rules amended/altered and, therefore, the Petitioner has filed this petition under article 226 of the Constitution of India with a prayer that Rules 16 and 43 of the Mumbai Stock Exchange Rules, Byelaws and Regulations, 1957, should be declared as illegal, bad in law and ultra vires the Constitution of India. He has further prayed that the Mumbai Stock Exchange may be directed to amend/alter/delete Rules 16 and 43 of the Mumbai Stock Exchange Rules.