Court Orders Deposit of Funds in Fixed Deposit for Surplus Refund Dispute Resolution.

The Bombay HC granted interim relief in two petitions challenging the Exchange's communications regarding surplus refunds to defaulting members. The Court directed the Respondents to deposit specified amounts with the Prothonotary and Senior Master within two weeks. These funds are to be invested in a Fixed Deposit, with renewals until the petitions' resolution.

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Issues: Challenge to communications by Exchange regarding refund of surplus to defaulting members, interpretation of ex-gratia payments, applicability of Section 226(3) of the Act, consideration of previous resolution by the Apex Court.

Analysis:
The High Court of Bombay heard two petitions challenging communications issued by the Exchange to defaulting members regarding the refund of surplus from auction proceeds of membership rights. The Petitioners claimed that the sale proceeds were subject to their prior rights due to income tax dues, while the Exchange argued that the amounts were ex-gratia payments and not debts owed to the defaulting members. The Exchange contended that Section 226(3) of the Act did not apply in this case as the payments were made based on a resolution from 1999, which was previously considered by the Apex Court in a different case. The Apex Court had ruled that the amounts payable under the resolution were not attachable by the Income Tax Department.

The Court granted interim relief as requested by all parties involved. The Respondents were directed to deposit the specified amounts with the Prothonotary and Senior Master of the High Court of Bombay within two weeks. The Prothonotary and Senior Master were further instructed to invest the deposited amounts in Fixed Deposit for an initial period of one year, with subsequent renewals until the resolution of the two petitions.

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