DELHI STOCK EXCHANGE Vs. RAVINDER PAL SINGH

JUDGEMENT

(1.) In case a share broker who is a member of a Stock Exchange is declared a defaulter by the said Stock Exchange. whether a complaint for recovery of the amount invested by an investor through such a broker for purchase of shares or receivable for the shares sold would be maintainable against the share broker and Stock Exchange?

(2.) In our view, not only does the broker is render "service" in the purchase and sale of listed securities but the Stock Exchange is also required to render service to the investors. The Stock Exchange controls and organizes the mode, manner and performance of the con tract between the investors and its member brokers. It also charges fees on various counts. Further, a share broker cannot do any business in security transactions without becoming a member of the Stock Exchange, as provided in Sec. 19 of the Securities Contracts (Regulation) Act. 1956. The Stock Exchange is also required to maintain the Stock Exchange Customer Protection Fund. Every member of the Stock Exchange is required to be a member of the said Fund and is required to make yearly contribution to the Fund. Similarly, the Stock Exchange is also required to make contribution to the said Fund. Further, the Stock Exchange, which is an incorporated company, consists of its members and acts through its members. Hence, the Stock Ex change is also a service provider.

(3.) Before the District Forum, Delhi, eight complaints were filed by investors against the Delhi Stock Exchange (hereinafter called the DSE) alleging deficiency in service in not ensuring disbursement of the amounts due to the said investors (Complainants), consequent upon the transaction of sale and purchase of shares of various companies through Opposite Party No. 2. M/s P. K. Wadhwa and Co., AU - FEBRL'AR\' 2008 - REPORTS a Share Broker and Member of the DSE. As M/s P. K. Wadhwa and Co. failed to honour its commitment, the DSE cancelled its ticket (membership card). His ticket as broker was auctioned. However, the Complainants' claims were not honoured. Hence, the following complaints were filed against the DSE and M/s. P. K. Wadhwa and Co., before the District Forum: <FRM>JUDGEMENT_341_CPJ1_2008_1.html</FRM>