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TMI Blog2019 (9) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... r convenience, we may refer facts from Writ Petition No.1663 of 2018. This Petition is fled by an individual praying for a direction to the Respondent Nos.2 and 3 to pay to the Petitioner a sum of Rs. 15,00,000/- as compensation from the Investors Protection Fund (for short 'Fund') with interest. This challenge arises in the following background. The petitioner is an Advocate. Respondent No.1 is the Security Exchange Board of India Limited ('SEBI' for short), Respondent No.2 is the Bombay Stock Exchange Limited ('BSE' for short), Respondent No.3 is the Stock Exchange Investors Protection Fund, a registered trust and Respondent No.4 is a private limited company, who was at relevant time a registered broker with the BSE. 2. The petitioner ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed by the SEBI under various Circulars issued from time to time. The petitioner had lodged such a claim with the Fund. Respondent No.3 however, rejected the Petitioner's claim, which was communicated to the petitioner under a letter dated 1st August, 2017 observing that since there is no transaction on the exchange, the transaction is considered as a loan transaction and hence the claim is not recommended for any payment from the Fund. At that stage, the Petitioner has fled the present petition. The facts in Writ Petition No.1734 of 2018 are substantially similar and are therefore, not separately recorded. 4. In background of such facts, learned Counsel for the petitioner submitted that the petitioner's claim was duly verifed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He submitted that the petitions, it is doubtful whether would be maintainable for a direction to the Respondent No.4 for claiming the compensation, which is purely discretionary in nature. No vested right is created in the petitioner. 6. In the present case, we keep aside the availability of alternative remedy before the Securities Appellate Tribunal, though raised by the Counsel for Respondent No.3. We are also not inclined to dismiss the petitions as being not maintainable. The Respondent No.3 may be a registered trust, nevertheless is constituted and functions under the directives and guidelines of the SEBI. It appears the Fund is constituted to obviate the hardships of small investors, whose investments may be blocked on account of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the petitioner entitled to receive certain sum from the Respondent No.4 broker. In the context of verifying the Petitioner's claim, these arbitration awards should be suffcient. However, the passing of the awards by itself is no guarantee that the compensation from the Fund must be made available. Firstly, the arbitration was between the petitioner and Respondent No.4. Secondly, the payment of compensation must depend on the policy of Respondent No.3 formulated and declared through Circulars issued from time to time by the SEBI. In this context, we may refer to the Circular dated 23rd February, 2017. This Circular amends the previous Circulars in order to comprehensively review investors' grievance redressal mechanism. This Circular lay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f your claim against Defaulter, Dreams Broking Pvt. Ltd., (Arbitration Ref. No. 717/2016), which are as follows : Award is for Rs. 52,74,953.65 (Rs. 7,00,000/- non return of monies paid to broker and non delivery of shares of Rs. 45,74,953.65). UCC was created on 29th May, 2015. The applicant had paid Rs. 7,00,000/- on 18/6/2015 to broker which broker did not return. Bank statement indicates that the money was paid to broker. The cheque paid by broker for Rs. 7,00,000/- was returned undelivered. Further some shares were transferred from applicant's account to brokers account which the broker did not return. These shares have been transferred on 8th May, 2015, which was much prior to creation of UCC. The arbitrators have awarded the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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