Disciplinary powers cannot enforce an unadjudicated monetary claim, but separate reporting defaults may still support action.

A disciplinary or suspension power under exchange bye-laws cannot be used to enforce an unadjudicated inter-member monetary claim where the governing scheme requires the dispute to be first referred to arbitration. Interim protection was therefore granted against coercive action based on the disputed sum. However, an alleged failure to report transactions raised a separate bye-law issue, and action on that ground was not restrained at the interim stage because it could still independently attract discipline if established.

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Issues: Whether the exchange could proceed under its disciplinary powers on the basis of an unadjudicated claim for payment, and whether interim restraint should also extend to alleged non-reporting of transactions under the relevant bye-laws.

Analysis: The dispute as to liability between members fell within the arbitration arrangement contained in the exchange articles, so disciplinary steps predicated solely on an asserted monetary claim were not justified until the claim was first adjudicated. The exchange's power to impose suspension or penalty under the disciplinary article was linked to discipline of trading and members' activity, and could not be used merely to enforce a disputed demand. At the same time, the pleadings and the impugned letter also raised a separate issue of alleged failure to report transactions, and if that violation was established it could prima facie attract action under the relevant bye-law read with the disciplinary article.

Conclusion: Interim protection was granted against action under the disciplinary article insofar as it rested on the claimed sum of Rs. 31,44,199, but no restraint was issued at that stage in relation to the alleged violation of the reporting bye-law.

Final Conclusion: The application succeeded only to the limited extent of preventing coercive disciplinary action based on the disputed monetary claim, while leaving open action founded on the alleged reporting default.

Ratio Decidendi: A disciplinary or suspension power cannot be invoked to enforce an unadjudicated inter-member monetary claim where the governing scheme requires the dispute to be first referred to arbitration, though separate action may still lie for an independent bye-law violation.

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