SC dismisses NSEL appeal in MPID case

The Supreme Court (SC) on Wednesday dismissed a Special Leave Petition filed by National Spot Exchange (NSEL) seeking relief against a High Court order on applicability of Maharashtra Protection of Interests of Depositors (MPID) Act on its affairs. NSEL had pleaded for a stay on proceedings of attachment of assets of the bourse and its directors initiated by the MPID court in Mumbai.

The bench of A K Sikri and N V Ramana called the petition frivolous and imposed costs.

In an order, the bench said: "Since this petition is a totally frivolous petition, it is dismissed with cost of Rs 5,000. Let this amount of cost be deposited with the Supreme Court legal services committee within two weeks from today."

Imposing costs on one of the parties is a practice in courts meant, among other things, to act as a deterrent against litigants abusing the process and the system of the law.

In the petition NSEL had sought leave to challenge a Bombay High Court judgment of October 2015 dismissing its plea.

Claiming that the application of MPID Act on it was "beyond competence/ without jurisdiction", the exchange had sought an ad-interim ex-parte stay on the High Court judgment. It also sought a stay on all the proceedings pending before the MPID court, Mumbai.

It argued that MPID Act pertained primarily with deposits and that facilitating trading and effecting settlement through payment and delivery on an exchange platform would not amount to accepting deposits under the Act. According to the petition, "In the event of any default in payment or delivery obligations by some of the registered trading members ( and their non-member clients), or even in the context of alleged wrongful/fraudulent acts by officers and employees of the exchange in collusion with the defaulting trading members resulting in such default, the petitioner exchange and its directors and officers cannot be proceeded against under the MPID Act."

The petitioner told the court that Maharashtra government has issued a gazette notification attaching the properties of the petitioner and its directors and has further filed affidavit before the MPID court to make the attachment absolute. And that the court has issued notice to those whose properties were about to be attached. It pleaded that if the proceedings are not stayed, "it would cause grave injustice to the petitioner."