TaxTMI 
TaxTMI 
2024 (12) TMI 295
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....hauhan & Atul Aggarwal, i/b, TLP. PC:- 1. Heard learned Counsel for the parties. 2. The Petitioner challenges Clause 7 of Securities and Exchange Board of India ("SEBI") Circular No. SEBI/HO/MIRSD/DPIEA/CIRP/2020/2015, dated 1 July 2020, on the grounds that it is arbitrary and unconstitutional. 3. Mr Rushin Kapadia, the learned Counsel for the Petitioner, submits that the impugned clause provides that once a member is disabled or show cause is issued for declaring such member as a defaulter to a Trading Member (TM)/Clearing Member (CM) (whichever is earlier), no further Investor Grievance Redressal Committee ("IGRC")/arbitration meetings shall be conducted. He submits that in this case, the Petitioner has a claim against Blue Sea Inte....
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....nge, by communication dated 20 January 2022, that it wished to pursue the arbitration remedy. 7. The impugned clause in SEBI's circular dated 1 July 2020 provides that the further remedy of arbitration may not be available once the member is disabled or a show cause notice is issued for the declaration of such member as a defaulter. 8. Mr Rohan Sawant, learned Counsel for the stock exchange, pointed out that, pursuant to the show notice dated 5 January 2022, a final order dated 26 November 2024 was passed declaring the Petitioner a defaulter. He also pointed out that the Petitioner may have a right to appeal this order before the Securities Appellate Tribunal (SAT). 9. Through its various Benches, this Court repeatedly enquired from the ....
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....louted the discipline imposed by the SEBI circular dated 26 September 2013. We regret to say that the entire objective appears to be to somehow keep the pot boiling and frustrate the claimants' attempts to secure any amounts based on the IGRC order. Surprisingly, the petitioner has not even bothered to implead the claimant, Blue Sea International, as a Respondent in this Petition. 13. In somewhat similar circumstances, this Court had declined to exercise its extraordinary and discretionary jurisdiction favouring the Petitioner in Dealmoney Securities Pvt Ltd Vs National Stock Exchange of India through its Investor Grievance Redressal Panel and Anr 2019 SCC OnLine Bom 5400 after referring to the SEBI's circular dated 26 September 2013 to st....
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....itration. In case, the Member does not opt for arbitration, the Stock Exchange shall, release the blocked amount to the investor after the aforementioned 7 days. In case, the Member opts for arbitration and the claim value admissible to the investor is not more than 10 lac, there is a further procedure to be undertaken by the Stock Exchange. The Circular has placed responsibility on the trading member to opt for arbitration after the opinion is referred by the Investor Grievance Redressal Committee." 15. The coordinate Division Bench also made the following observations in paragraphs 10 and 11: "10. The petitioner being a member of the Stock Exchange is covered by the Circular of 2013. This methodology is operating for almost six years ....
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....e Petitioner made the volte-face and wrote to the NSE that it wanted to pursue the arbitration. Admittedly, this intimation exceeded the timelines prescribed in the SEBI circular. Fortunately, the petitioner has not questioned the SEBI's circular dated 26 September 2013. 17. The Petitioner, as noted above, claims it has no means to honour the directions issued by IGRC but that it has its claim to pursue against the complainant, who, the Petitioner, has not even shown the courtesy of impleadment. If the Petitioner's claims that it has no money are correct, then it is apparent that this entire exercise is only to waste time and to keep the pot boiling by adopting contradictory stances. The extraordinary jurisdiction of this Court under Artic....