Brig Rajinder Singh (Retd) vs National Stock Exchange And Ors on 26 April, 2023

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Delhi High Court - Orders

Brig Rajinder Singh (Retd) vs National Stock Exchange And Ors on 26 April, 2023

Bench: Prathiba M. Singh

                          $~8
                          *     IN THE HIGH COURT OF DELHI AT NEW DELHI
                          +                            W.P.(C) 4639/2023
                                BRIG RAJINDER SINGH (RETD)                   ..... Petitioner
                                                Through: Mr. Himanshu Chaubey & Mr.
                                                            Naveen       Soni,         Advocates.
                                                            (M:8800625927)
                                                versus
                                NATIONAL STOCK EXCHANGE AND ORS              ..... Respondents
                                                Through: Mr. Ashish Aggarwal & Mr. Satyajit
                                                            Yadav, Advocate for R-3/SEBI. (M:
                                                            9810077771)
                                CORAM:
                                JUSTICE PRATHIBA M. SINGH
                                          ORDER

% 26.04.2023

1. This hearing has been done through hybrid mode. CM APPL. 17742/2023 & CM APPL. 17743/2023 (for exemption)

2. Allowed subject to all just exceptions. Applications are disposed of. W.P.(C) 4639/2023

3. By way of the present petition, the Petitioner challenges the communication dated 23rd December, 2021, issued by Respondent No.1. The Petitioner seeks payment of the amount which he has deposited with Respondent No.2- M/s Modex International Securities Ltd., which was a member of the National Stock Exchange (NSE) and stood expelled from September, 2020.

4. The case of the Petitioner is that he is an Army veteran who had deposited a sum of Rs.20,00,000/- with Respondent No.2 after opening a DEMAT account. However, even before he could start making any transactions, the NSE stopped the activities of Respondent No.2 and held that refund cannot be given to the Petitioner.

Signature Not Verified Digitally Signed By:RAHUL Signing Date:01.05.2023 18:24:42

5. Ld. counsel for Respondent No.4/SEBI raises an objection of maintainability as the order is an appealable order under Section 23L of Securities Contracts (Regulation) Act, 1956.

6. The memo of parties wrongly records the names of Respondents as Respondent Nos. 2, 3 and 4 which ought to be read as Respondent Nos. 1, 2 and 3. Let an amended memo of parties be filed within 2 weeks.

7. Issue notice to Respondent No. 2 and 3.

8. A perusal of the order dated 3rd June, 2021 shows that the only reason why the Petitioner's claim has been rejected is because the Petitioner has not traded on the exchange platform. Clearly, immediately upon the deposit of the amount within almost a month itself, Respondent No.2 was expelled and, thus, the Petitioner, prima facie, cannot be blamed for having not traded.

9. Let a short affidavit be placed on record by NSE on the following aspects:

i. What was the amount which was transferred from the account of M/s Modex International Securities Ltd. into the Defaulter's Committee.

ii. The amount of compensation which would be liable to be paid if the Petitioner has given proper proof of deposit and has been able to show that even before he could trade, Respondent No.2's account was frozen.

10. SEBI may file its stand on the subject.

11. List before Registrar on 17th July, 2023.

12. List before Court on 17th October, 2023.

PRATHIBA M. SINGH, J.

APRIL 26, 2023/dj/sk Signature Not Verified Digitally Signed By:RAHUL Signing Date:01.05.2023 18:24:42

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Delhi High Court - Orders