Mahesh Ratilal Shah vs Union Of India & Ors

2. The case of the Petitioner is that he had been induced by the BSE and its Members to buy 4,50,800 shares of "Presto Finance Ltd." and under the 3 assurance of the Exchange, he had deposited the entire purchase amount, amounting to Rs.71,19,817.30 with the Exchange. It is the Petitioner's further case that the Exchange and its Members had intentionally and deliberately cheated him by giving him delivery of 1,56,100 forged share certificates and refused to cancel the said dealing when the same was discovered and instead asked the Petitioner to go to the Liquidator of Presto Finance Ltd. for claiming damages.

10. Mr. Diwan submitted that the BSE had been established in 1875 as "The Native Shares and Stock Brokers Association" and was the first Stock Exchange in the country which obtained permanent 10 recognition in 1956 from the Government of India under the 1956 Act and had played a pivotal role in the development of the Indian Capital Market. The recognition granted to the BSE was duly published by the Ministry of Finance, Government of India, in its Stock Exchange Division in the Gazette of India dated 31st August, 1957. Thereafter, the Stock Exchange Rules, Bye-laws and Regulations were framed in 1957 and advance print of the same, together with all amendments up to date, was sent to the Government of India. Receipt and approval of the same by the Government of India under the 1956 Act was also conveyed to the Secretary of the Stock Exchange by the Deputy Secretary in the Ministry of Finance, Department of Economic Affairs, by his letter dated 1st May, 1959. Mr. Diwan submitted that the Rules, Regulations and Bye-laws of the Bombay Stock Exchange had been acted upon since they were framed and the Petitioner also claims to have traded on the Stock 11 Exchange as a Sub-broker through Yogesh Mehta, said to be a member of the Stock Exchange. Mr. Diwan submitted that when the Rules, Bye-laws and Regulations had been continuously acted upon for more than 50 years, it would be inequitable to hold that the same were not valid on account of non- publication in the Official Gazette or the Gazette of India in terms of Sub-section (4) of Section 9 of the 1956 Act.

16. Apart from being guilty of delay and laches, Mr. Diwan submitted that the petitioner was himself in default, not being a registered sub-broker of the BSE, although, he claimed to be a sub-broker of Yogesh B. Mehta, a member of the Stock Exchange. Mr. Diwan submitted that the Special Leave Petition bristled with malice in law and was, therefore, liable to be dismissed with costs.

26. In that view of the matter, we see no reason to interfere with the order of the Bombay High Court impugned in the present Special Leave Petition and the same is, therefore, dismissed, but without any order as to costs.

27. Before parting, we would, however, indicate that even if the 1956 Act did not contemplate publication of the pre-recognition Rules and Bye- laws, the position is and would continue to be rather ambivalent if the amended Rules and Bye-laws were published in the Official Gazette while the main Rules and Bye-laws remain unpublished. It may, therefore, be in the fitness of things to have the said Rules and Bye-laws also published in the 28 Official Gazette and the State Gazette to prevent questions similar to those raised in this Special Leave Petition from being raised in future.