M/S. Emkay Global Financial Services ... vs Sebi

BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI Date of Decision: 26.03.2015

Appeal No. 134 of 2015

M/s. Emkay Global Financial Services Limited The Ruby, 7th Floor, Senapati Bapat Marg, Dadar West, Mumbai- 400 028 ...Appellant

Versus

1.

The National Stock Exchange of India Limited Exchange Plaza, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051

2. Inventure Growth and Securities Limited Viraj Towers, 201, 2nd Floor, Near Land Mark, Western Express Highway, Andheri (East) Mumbai- 400 069

3. Prakash K Shah Shares and Securities Limited 8B, Rajabahadur Motilal Mansion, 1st Floor, 11/43, Tamarind Lane, Fort, Mumbai- 400 023 ...Respondents

Mr. Darius Khambata, Senior Advocate with Mr. Pesi Modi, Senior Advocate, Mr. Somasekhar Sundaresan, Mr. Abhishek Venkatraman and Mr. Dhaval Kothari, Advocates i/b J. Sagar Associates for the Appellant.

Mr. E. P. Bharucha, Senior Advocate with Mr. Rashid Boatwalla and Ms. Aditi Kamath, Advocates i/b Manilal Kher Ambalal & Co. for Respondent No.1

Mr. Shashank V. Choudhary, Advocate for Respondent No. 2

Mr. Prakash K. Shah, Advocate for Respondent No. 3 2

WITH Appeal No. 135 of 2015

Prakash K Shah Shares and Securities Limited 8B, Rajabahadur Motilal Mansion, 1st Floor, 11/43, Tamarind Lane, Fort, Mumbai- 400 023 ...Appellant

Versus

The National Stock Exchange of India Limited Exchange Plaza, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 ...Respondent

Mr. Zal Andhyarujina, Advocate with Mr. Ajai Achuthan, Advocate for the Appellant.

Mr. E. P. Bharucha, Senior Advocate with Mr. Rashid Boatwalla and Ms. Aditi Kamath, Advocates i/b Manilal Kher Ambalal & Co. for the Respondent.

CORAM: Justice J.P. Devadhar, Presiding Officer Jog Singh, Member

Per: Justice J.P. Devadhar (Oral)

1. In these two appeals, the appellants have challenged the order

passed by the Standing Committee of NSE on Annulment on December

04, 2014. By the said order the Committee has declined to take on

record the settlement proposed by the parties and declined to release

payment as per the settlement proposed by the parties.

2. Dispute in the present case, relates to annulment of trades that were

executed on October 05, 2012 where in both parties to the trade were

found to have violated the norms laid down by SEBI/NSE. On an

application filed by M/s. Emkay Global Financial Services Limited 3

('Emkay' for short) seeking annulment of trades, NSE by its order dated

April 29, 2013 rejected the said application. Challenging the said order

Emkay had filed Appeal No. 64 of 2013. While setting aside the said

order and allowing the appeal by way of remand on August 26, 2014, we

had directed NSE to pass fresh order on annulment application after

hearing the concerned parties.

3. When the matter was taken up for fresh hearing, parties submitted

settlement proposal which was rejected by NSE on ground that it has no

power to take such settlement proposal. Hence the parties to the

settlement proposal have filed the above appeals.

4. Before us, Mr. Bharucha Learned Senior Advocate appearing on

behalf of NSE on instructions fairly stated that the settlement proposal

put up by the parties is not in contravention of any of the

rules/regulations/bye laws of NSE. However, he submitted that in the

absence of any power, NSE could not entertain the settlement.

5. In these circumstances, since the settlement is bonafide and is not

violative of any provisions of SEBI/NSE, without going into the

question as to whether NSE had power to take settlement on record or

not, in the peculiar facts of the present case, we, in exercise of powers

conferred under rule 21 of the Securities Appellate Tribunal (Procedure)

Rules, 2000 direct NSE to take on record the settlement proposed by the

appellants and release the withheld payment to the parties in terms of the

settlement. NSE is directed to release the withheld payment as 4

expeditiously as possible and in any event within a period of two weeks

from today.

6. Both the appeals relating to annulment of trades are disposed of

accordingly. This order will not come in the way of the Disciplinary

Action Committee in continuing the proceeding pending before it

against the parties to the trades in question herein.

7. Order of NSE dated December 04, 2014 impugned herein is

modified accordingly to the extent setout hereinabove.

8. Both appeals are disposed of in the above terms with no order as to

costs.

Sd/-

Justice J.P. Devadhar Presiding Officer

Sd/-

Jog Singh Member

26.03.2015 Prepared & Compared By: PK