The Supreme Court dismissed a petition of National
Spot Exchange (NSEL) for relief against a high court (HC) order on the applicability of the Maharashtra Protection of Interests of Depositors (MPID) Act on its affairs.
NSEL had pleaded for a stay on the proceedings for attachment of its assets and that of its directors, initiated by the MPID court in Mumbai. The bench of judges A K Sikri and N V Ramana said the petition was “totally frivolous” and dismissed it after imposing a fine (‘costs’) of Rs 5,000 on the bourse for having filed it.
The amount, they said, must be deposited with the court’s legal services committee within two weeks. Imposing costs on one of the parties in a case is meant to deter litigants from abusing the process of law.
In the petition, NSEL wished to challenge the Bombay HC judgment of October 2015, dismissing its plea. Arguing that application of MPID on it was “beyond competence/without jurisdiction”, the exchange had sought a stay, on the HC order and on all the proceedings at the MPID court.
Its argument was that the MPID law pertained primarily to deposits and that facilitating of trading and effecting of settlements 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.”