Ratio decidendi
The rule this decision rests on
The reasoning here is thin but present: the Tribunal treats the appellants' inability to file claims for want of documents as a basis for directing the exchange to furnish those documents within a reasonable period, and considers whether the claim window should be extended in light of the pandemic-related extension already granted. Where a clearing corporation or exchange has declared a trading member a defaulter and the Bye-laws require it to collect that member's books and records, a client who needs those documents to lodge a claim may, on the Tribunal's direction, obtain them within a period the Tribunal considers reasonable, having regard to the exchange's stated operational constraints and to the claimant's ability to proceed on documents already in its possession.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
BEFORE THE SECURITIES APPELLATE TRIBUNALMUMBAIOrder Reserved on: 28.9.2020Date of Decision: 01.10.2020Appeal No.294 of 2020Sanjay Goyal4-bha26, Monilek Marg,Jawahar Nagar, Jaipur - 302004,Rajasthan. ... AppellantVersus1.National Stock Exchange of India Ltd.Exchange Plaza, Plot no.C/1, G Block,Bandra Kurla Complex,Bandra East, Mumbai - 400051.2. Quantum Global Securities Ltd.Quantum Global Securities Ltd.,608, 6th Floor, Pragati Tower 26,Rajendra Place, New Delhi - 110008. ...RespondentsMr. Manish Chhangani, Advocate i/b Khaitan & Co. forthe Appellant.Mr. Vishal Kanade, Advocate with Mr. SachinChandarana, Mr. Rashid Boatwalla, and Mr. PruthviDhinoja, Advocates i/b. M/s MKA & Co. for RespondentNo. 1WithAppeal No.295 of 2020Sunil ChawlaK-401, Ambience Lagoon Apartment,2N.H-8, Nathupur, Gurgaon - 122002,Haryana. ... AppellantVersus1. National Stock Exchange of India Ltd.Exchange Plaza, Plot no.C/1, G Block,Bandra Kurla Complex,Bandra East, Mumbai - 400051.2. Quantum Global Securities Ltd.Quantum Global Securities Ltd.,608, 6th Floor, Pragati Tower 26,Rajendra Place, New Delhi - 110008. ...RespondentsMr. Manish Chhangani, Advocate i/b Khaitan & Co. forthe Appellant.Mr. Vishal Kanade, Advocate with Mr. SachinChandarana, Mr. Rashid Boatwalla, and Mr. PruthviDhinoja, Advocates i/b. M/s MKA & Co. for RespondentNo. 1CORAM: Dr. C.K.G. Nair, MemberJustice M.T. Joshi, Judicial MemberPer : Justice M.T. Joshi, Judicial Member1. Both the present appeals have been preferred againstthe alleged inaction of the respondent no.1 NationalStock Exchange of India Ltd. (hereinafter referred to as3'NSEIL') and its failure to furnish documents relatingto their accounts after declaration of respondent no.2 asa defaulter by it, as well for extension for time to lodgeclaim with The Member and Core SettlementGuarantee Fund Committee of the respondent no. 1.2. Respondent no.2 Quantum Global Securities Ltd. isa stock broker registered with respondent no.1 NSEIL.It was declared as a defaulter by the respondent no.1and thereafter a notice was published for informationof the investors in the month of June, 2020 byrespondent no.1 in as per procedure intimating theclosure of the operation of the respondent no.2. Boththe appellants were clients of the respondent no.2.They sought certain documents regarding theiraccounts from respondent no.2 and thereafter fromrespondent no.1. According to the notice published bythe respondent no 1, a claimant has to lodge its claimwith the respondent no.2's Committee i.e. The Memberand Core Settlement Guarantee Fund Committeewithin 90 days that is latest by 27th September, 2020.4However, the appellants are not able to make any claimfor want of the documents and the period of filing theclaim is expired. Therefore, by the present appealsboth the appellants seek additional time of 30 days forfiling appeal from the date of supply of documents bythe respondent and also a direction to the respondent toprovide the documents.3. Respondent no.2 did not appear in the proceedings.Heard Mr. Manish Chhangani, Advocate for theAppellant and Mr. Vishal Kanade, Advocate assistedby Mr. Sachin Chandarana, Mr. Rashid Boatwalla, andMr. Pruthvi Dhinoja, Advocates for Respondent No. 14. Mr Chhangani submits that as per the Byelaws ofthe respondent no 1, upon declaration of a tradingmember as a defaulter, the respondent no 1 is requiredto collect, and the defaulting member to submit, all thebooks of accounts and other documents, as specified inthe Bye-laws. However despite sending emails to boththe respondents the appellants are not provided therelevant documents necessary for filing the claim.55. Mr. Vishal Kanade, the learned counsel forrespondent no.1, NSEIL submits that according to theBye-laws the accounts etc of the respondent no.2 haveto be collected by this respondent. However, due topresent pandemic situation since respondent no.1 isworking on skeleton staff it was not possible for therespondent no.1 to take action in this regard. Hesubmits that both the appellants claim to be investorswho had accounts with the respondent no.2 for sometime. In the circumstances, they are supposed to havethe documents with themselves. However, withoutgoing into this nitty-gritty Mr. Kanade submits thatwithin a short period the action of taking charge of allthe books of accounts of a defaulter i.e. respondentno.2 would be taken. He further points out thatrespondent no.2 was also under obligation to handoversuch books. However, as the same is not done therespondent no.1 will have to take action. He submitsthat as regards the extension of time in filing the appealhe submits that the notice itself would show that due to6the pandemic extension in filing the claim has beengranted for 3 more months. Mr. Kanade furthersubmits that based on the trade data submitted by NSE,appellants have sufficient documents/information forsubmitting their claims.6. Considering all the facts on record, in our view,three months' time for providing documents, if any, bythe respondent no.1 to the appellants could be areasonable period. The appellants may file the claimwith the respondent no.1. on the basis of thedocuments in their possession and may seek time forfiling further documents in view of the statement madebefore us by the respondent. On these terms, with adirection to the respondents no. 1 to provide necessarydocuments to the respective appellants within a periodof three months, both the appeals are disposed ofwithout any order as to costs.7. The present matter was heard through videoconference due to Covid-19 pandemic. At this stage itis not possible to sign a copy of this order nor a7certified copy of this order could be issued by theregistry. In these circumstances, this order will bedigitally signed by the Presiding Officer on behalf ofthe bench and all concerned parties are directed to acton the digitally signed copy of this order. Parties willact on production of a digitally signed copy sent by faxand/or email.
Dr. C. K. G. Nair Member TARUN Digitally signed by TARUN AGARWAL DN: c=IN, o=PUBLIC WORKS DEPARTMENT UTTAR PRADESH, postalCode=221505, st=Uttar Pradesh, 2.5.4.20=30fcf68685192bbc53e6ff1608a83fb3881de7ac2ab7
AGARWAL 954d509c85ed6e0f7c41, serialNumber=095f8b286bb0b1cd07ff676611f4f5e7999727d 404aa38ca422f9d3529bdb8a3, cn=TARUN AGARWAL Date: 2020.10.03 15:31:39 +05'30'
Justice M.T. Joshi Judicial Member
