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Madhya Pradesh High Court · body

2012 DIGILAW 231 (MP)

Engipress Industries Ltd. v. Kontey Securities

2012-02-23

G.D.SAXENA, S.K.GANGELE

body2012
Judgment The appellant entered into a contract with the respondent No. 1 in regard to purchase of 7300 shares of M/s Tata Tea Company Limited at the rate of Rs. 439 per share. Three hundred (300) shares were delivered to the appellant by the respondent No. 1, however, 7000 shares were not delivered. The appellant filed a complaint on 14.11.1998 to the Stock Exchange Mumbai. Thereafter in accordance with the provisions of the Stock Exchange Bye-laws, the matter was referred to the Arbitrators. The Arbitrators vide an award dated 14.2.2000 absolved the respondent No. 2 from its liability and passed an award against the respondent No. 1. The Mumbai Stock Exchange is a Stock Exchange duly recognized by the Central Government under the provisions of Securities Contracts (Regulations) Act, 1956. The Stock Exchange made regulations named as Regulations of 1957 in pursuance to the provisions of Securities Contracts (Regulations) Act, 1956 with prior approval of the Central Government. The Bye-laws No. 274 of Mumbai Stock Exchange prescribes that all dealings transactions and contracts are subject to the jurisdiction of the courts in Mumbai. The relevant Bye-law No. 274 is as under: Operation of Contracts "274. All dealings, transactions and contracts which are subject to the Rules, Bye-laws and Regulations of the Exchange and every arbitration agreement to which the Rules, Bye-laws and Regulations of the Exchange and shall be deemed to be and shall take effect as wholly made, entered into and to be performed in the city of Bombay and the parties to such dealings, transactions, contracts and agreements shall be deemed to have submitted to the jurisdiction of the Courts in Bombay for the purpose of giving effect to the provisions of the Rules, Bye-laws and Regulations of the Exchange.” The appellant submitted its application for arbitration in accordance with the Bye-laws of the Mumbai Stock Exchange and thereafter the arbitration proceedings were initiated and the award was pronounced. Thereafter an appeal was filed by the appellant before the appellate Bench of Arbitration Department, Stock Exchange, Mumbai, that appeal was dismissed vide order dated 27.9.2000. From the aforesaid fact, it is clear that the appellant itself initiated proceedings under the Bye-laws of the Rules and Regulations framed by the Mumbai Stock Exchange and the Bye-law No. 274 clearly prescribes that in the event of dispute the competent court of Mumbai would have a jurisdiction. From the aforesaid fact, it is clear that the appellant itself initiated proceedings under the Bye-laws of the Rules and Regulations framed by the Mumbai Stock Exchange and the Bye-law No. 274 clearly prescribes that in the event of dispute the competent court of Mumbai would have a jurisdiction. In the present case, the appellant himself subjected to the Bye-laws of the Mumbai Stock Exchange, it initiated the proceedings in accordance with the Bye-laws and an award was pronounced in accordance with the Bye-laws. In such circumstances, the appellant is bound by the Bye-laws and as per Bye-law No. 274, the competent Court of Mumbai has the jurisdiction to entertain the application filed by the appellant under Section 34 of the Act of 1996.