HASMUKH DOLCHAND PARIKH Vs. BOMBAY STOCK EXCHANGE

JUDGEMENT

(1.) The short question is whether the Bombay Stock Exchange, the 1st respondent herein, was justified in rejecting the Petitioner's application for readmission as member of Stock Exchange. On perusal of the report of the Defaulter's Committee ("the Committee"), it is obvious that although the membership of the Exchange is a personal permission from the Exchange and a member was prohibited from assigning any rights or privileges attached to the membership, the Petitioner had abdicated his responsibility in respect of his membership and had in effect assigned his membership rights and privileges to Viswapriya Financial Services and Securities Ltd. (VFSSL). It is also seen that the Petitioner by abdicating all control over the conduct of his business, permitted huge commitments to be entered into by his office. The Committee has found that there was a blatant breach of rules, Bye-laws and regulations of the exchange and all principles of stock broking business. The Committee has also found that the business of the Petitioner was for all practical purposes carried on by VFSSL. He did not have any control on what VFSSL was doing. His attempts to get information from VFSSL were frustrated for six months. In spite of that, he allowed VFSSL to carry on the business resulting in the liability of more than Rs.4 crores. It is also pertinent to note that the Petitioner failed to produce the original books of account, receipts and vouchers when he was called upon to do so by the Committee. Thus, there was total non-compliance with the relevant rules relating to readmission of member to the Stock Exchange. In these circumstances, there is no illegality committed by the Committee in declining to accept the Petitioner's request for readmission as a member of the Stock Exchange. In the Affidavit-in-rejoinder, the Petitioner has tried to contend that the Stock Exchange has permitted a similar agreement in the case of one Karamchand Chunilal We have perused the said agreement and we find that in that case the arrangement is totally different and has no bearing to the facts of the present case. Hence, this petition is dismissed summarily.