Prashant Bajaj & Ors. vs Sebi

Date of Decision : 04/01/2018

Appeal No.358 of 2017

1.

Prashant Bajaj House No.C-137, Ramesh Nagar, New Delhi - 110 015.

2. Sucheta Bithal A-8, 4th Floor, Crosswinds, Luxury Homes, Lodhi Club Road, Ludhiana - 141 012.

3. Ashish Bithal A-8, 4th Floor, Crosswinds, Luxury Homes, Lodhi Club Road, Ludhiana - 141 012.

4. Atul Hajela 14, Babbar Road, 1st Floor, New Delhi - 110 001.

5. Hajela Software LLP 14, Babbar Road, 1st Floor, New Delhi - 110 001.

6. Shikha Hajela 14, Babbar Road, 1st Floor, New Delhi - 110 001.

7. Vijay Kumari Bahman Plot No. C-604, PNB Apartments, Plot No.11, Sector 04, New Delhi - 110 078.

8. Surendra Kumar Aggarwal D-208, Mansarovar Garden, Ring Road, New Delhi - 110 015.

2 9. Evershine Stoneplus P.Ltd.

D-208, Mansarovar Garden, Ring Road, New Delhi - 110 015.

10. Sudhesh Singh w/o ID Singh House No.1591, ESIC Society, Sector 51B, Chandigarh - 160 047.

11. Inderdev Singh House No.1591, ESIC Society, Sector 51B, Chandigarh - 160 047. ... Appellants

Versus

National Stock Exchange of India Limited NSE, Exchange Plaza, C-1, Block G, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051. ... Respondent

Mr. Gaayan Sethi, Advocate for Appellants.

Mr. Sachin Chandarana a/w Ms. Lipsa Unadkat, Advocates i/b MKA & Co. for the Respondent.

CORAM : Justice J. P. Devadhar, Presiding Officer Dr. C. K. G. Nair, Member

Per : Justice J. P. Devadhar (Oral)

1. This appeal is filed to challenge the communication of National

Stock Exchange Ltd. ("NSE" for short) dated 10th November, 2016. By

the said communication it is held that the claim of the appellant against

expelled member Kassa Finvest Private Limited is admissible to the

extent of Rs.45,16,900/-, however, it is held that the maximum amount

payable out of the Investor Protection Fund (IPF) is only Rs.15 lakh.

3 2. Counsel for the appellant submitted that once it is held that the

claim admissible to the appellant is Rs.45,16,900/-, NSE is not justified

in restricting the claim to Rs.15 lakh only. By referring to para 6.1 and

6.2 of the order passed by the Whole Time Member ("WTM" for short)

of Securities and Exchange Board of India ("SEBI" for short) on 30th

August, 2017 in the case of Kassa Finvest Private Limited, counsel for

the appellants submitted that SEBI itself has found NSE guilty of not

taking appropriate measures and, in such a case, it is submitted that

since NSE failed to monitor the activities of its registered broker, NSE

must be directed to pay entire claim admissible to the appellants.

3. We see no merit in the above contentions.

4. Fact that the claim held liable to be paid by the erring broker to

the appellants comes to Rs.45,16,900/- does not mean that NSE is liable

to pay the said admissible amount to the appellants. Since the

guidelines framed by NSE provide for maximum payment of Rs.15 lakh

from IPF, the appellant is not justified in seeking amount in excess of

Rs.15 lakh from IPF.

5. Reliance placed by counsel for the appellants on the order passed

by the WTM of SEBI on 30th August, 2017 in case of Kassa Finvest Pvt.

Ltd., is misconceived. By that order, the WTM of SEBI has accepted the

explanation given by NSE and accordingly discharged the show-cause

notice issued to the NSE. In such a case, questioning of making NSE 4

liable to pay the amounts admissible to the appellants does not arise at

all.

6. In these circumstances, we see no merit in the appeal and the

same is hereby dismissed with no order as to costs.

Sd/-

Justice J. P. Devadhar Presiding Officer

Sd/-

Dr. C. K. G. Nair Member

04/01/2018 prepared & compared by-dg