MAHENDRA KUMAR NAHATA Vs. CALCUTTA STOCK EXCHANGE

JUDGEMENT

(1.) IN this writ application the main grievance of the petitioner is against the respondent no. 1, the Calcutta Stock Exchange Association Limited, a company incorporated under the Companies Act, 1956, alleging that the said company acted in an arbitrary manner by not refunding the entire security deposit as deposited as a condition of membership, when the petitioner wanted to resign from the membership by transferring his share in favour of his daughter who applied for mutation of her name as member of the said company.

(2.) TO satisfy the issue that the writ is maintainable before the High Court at Calcutta against the said company irrespective of fact of its nomenclature as a company incorporated under the Companies Act, by filing a supplementary affidavit it is contended, inter alia, that under the Securities and Exchange Board of India, in short hereinafter referred to as SEBI, the respondent no. 2 herein, calcutta Stock Exchange, for brevity, hereinafter referred to as "said Company", is controlled by respondent no. 2, constituted under Securities Contracts (Regulation) Act, 1956, hereinafter for brevity referred to as SCRA. Different sections of the SCRA has been referred to, to contend that the business of the said Company is controlled by the SEBI created under the said Act including its registration, membership and all other matters including the provision for appointment of Administrator by superseding the Board of Directors in the event of any proved fact of mismanagement. All this has been urged for the satisfaction of this Court that the said Company is an authority under Article 12 of the constitution of India and as such, writ application is maintainable. It has been further submitted that said Company is discharging a public function.

(3.) THIS writ application has been opposed by the respondent nos. 1 and 2 both by filing their respective affidavit-in-opposition including affidavit-in opposition of supplementary affidavit as filed by the petitioner by contending, inter alia, that the Calcutta Stock Exchange is not an authority under Article 12 of the Constitution of India as because the financial, managerial and other administrative function of the said Stock Exchange is not controlled by the central Government even on application of the said Act of 1956, which has been referred to as SCRA. It has been contended that there are so many regulation/statute whereby Central Government through any Act has been empowered to appoint any administrator in the event of complaint of any mismanagement of the Board and/or sometimes it requires consent/approval under any statute for admission of any member but that does not mean that the organization is absolutely under the control of the government and more particularly with reference to its dealing with a member who intended to resign and thereby his claim of refund of security deposit. It has been further contended that when a member intends to resign from the membership of Calcutta Stock exchange, refund of its security deposit is subject to deductions as made in the bye-laws and the regulation and furthermore, if anybody is aggrieved by such decision about refund of security money or any other transaction, the member is at liberty to initiate an arbitration proceeding under the Arbitration Clause in terms of the bye-laws of the said Company. With this contention it has been urged that there is an alternative, efficacious and speedy remedy by arbitration following the Arbitration and Conciliation Act, as such, writ is not maintainable on that ground also.