2018 (3) TMI 1830

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....whereby the claim of the appellant provided as margin money to Kassa Finvest Private Ltd. ('Kassa' for short), a defaulter stock broker of the NSE, was not admitted for payment from the Investor Protection Fund ('IPF') of the NSE. The claim was rejected on the ground that the said amount of Rs. 8,89,620/- purportedly provided as margin money for trading in securities was in fact a transaction in the nature of loans. 2. The argument of Shri Gaayan Sethi, Learned Counsel for the appellant is that the appellant, a small investor, opened a trading account with Kassa (A/C. No. CX0869) on March 18, 2014 and transferred number of shares of 10 companies with off market trade instruction to Kassa's account on April 2, 2014. Th....

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.... Such claims of the appellant have to be settled by the broker itself because collecting loans by the broker purportedly in the name of margin money is prohibited. To support the argument the Learned Counsel for the NSE relied on the financial ledger of Kassa from April 1, 2013 to March 31, 2015 in respect of the appellant herein. This statement shows that interest to the tune of Rs. 9397 has been paid to the appellant upto June 2014 and provision of a tax credit to the tune of Rs. 1634 is also given. All these indicate that the so-called margin money deposited was in the form of a loan since the appellant had never traded in any securities during the period under consideration. 4. We have perused the various documents placed before us a....