Sanjay Goyal And Others vs National Stock Exchange Of India Ltd And Others

M.T. Joshi, J

Both the present appeals have been preferred against the alleged inaction of the respondent no.1 National Stock Exchange of India Ltd.

(hereinafter referred to as ‘NSEIL’) and its failure to furnish documents relating to their accounts after declaration of respondent no.2 as a

defaulter by it, as well for extension for time to lodge claim with The Member and Core Settlement Guarantee Fund Committee of the respondent no.

1.

Respondent no.2 Quantum Global Securities Ltd. is a stock broker registered with respondent no.1 NSEIL. It was declared as a defaulter by the

respondent no.1 and thereafter a notice was published for information of the investors in the month of June, 2020 by respondent no.1 in as per

procedure intimating the closure of the operation of the respondent no.2. Both the appellants were clients of the respondent no.2. They sought certain

documents regarding their accounts from respondent no.2 and thereafter from respondent no.1. According to the notice published by the respondent

no 1, a claimant has to lodge its claim with the respondent no.2’s Committee i.e. The Member and Core Settlement Guarantee Fund Committee

within 90 days that is latest by 27th September, 2020. However, the appellants are not able to make any claim for want of the documents and the

period of filing the claim is expired. Therefore, by the present appeals both the appellants seek additional time of 30 days for filing appeal from the

date of supply of documents by the respondent and also a direction to the respondent to provide the documents.

Respondent no.2 did not appear in the proceedings. Heard Mr. Manish Chhangani, Advocate for the Appellant and Mr. Vishal Kanade, Advocate

assisted by Mr. Sachin Chandarana, Mr. Rashid Boatwalla, and Mr. Pruthvi Dhinoja, Advocates for Respondent No. 1

Mr Chhangani submits that as per the Byelaws of the respondent no 1, upon declaration of a trading member as a defaulter, the respondent no 1 is

required to collect, and the defaulting member to submit, all the books of accounts and other documents, as specified in the Bye-laws. However

despite sending emails to both the respondents the appellants are not provided the relevant documents necessary for filing the claim.

Mr. Vishal Kanade, the learned counsel for respondent no.1, NSEIL submits that according to the Bye-laws the accounts etc of the respondent

no.2 have to be collected by this respondent. However, due to present pandemic situation since respondent no.1 is working on skeleton staff it was not

possible for the respondent no.1 to take action in this regard. He submits that both the appellants claim to be investors who had accounts with the

respondent no.2 for some time. In the circumstances, they are supposed to have the documents with themselves. However, without going into this

nitty-gritty Mr. Kanade submits that within a short period the action of taking charge of all the books of accounts of a defaulter i.e. respondent no.2

would be taken. He further points out that respondent no.2 was also under obligation to handover such books. However, as the same is not done the

respondent no.1 will have to take action. He submits that as regards the extension of time in filing the appeal he submits that the notice itself would

show that due to the pandemic extension in filing the claim has been granted for 3 more months. Mr. Kanade further submits that based on the trade

data submitted by NSE, appellants have sufficient documents/information for submitting their claims.

Considering all the facts on record, in our view, three months’ time for providing documents, if any, by the respondent no.1 to the appellants

could be a reasonable period. The appellants may file the claim with the respondent no.1. on the basis of the documents in their possession and may

seek time for filing further documents in view of the statement made before us by the respondent. On these terms, with a direction to the respondents

no. 1 to provide necessary documents to the respective appellants within a period of three months, both the appeals are disposed of without any order

as to costs.

The present matter was heard through video conference due to Covid-19 pandemic. At this stage it is not possible to sign a copy of this order nor a

certified copy of this order could be issued by the registry. In these circumstances, this order will be digitally signed by the Presiding Officer on behalf

of the bench and all concerned parties are directed to act on the digitally signed copy of this order. Parties will act on production of a digitally signed

copy sent by fax and/or email.