The Hindu Business Line : HC tells FMC to hear NCDEX plea in 2 weeks

“These are matters which are not to be examined by this Court in exercise of its jurisdiction vested under Article 226 of the Constitution of India.”

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Mumbai, Feb 6 The Bombay High Court has directed the National Commodity and Derivatives Exchange Ltd (NCDEX) to settle its issue over reducing transaction fee with the commodity market regulator Forward Markets Commission.

‘neither just nor fair’

Dismissing a writ petition filed by NCDEX against FMC, the Chief Justice, Dr D.Y. Chandrachud, said in his judgement that these were important and larger issues (reduction in transaction fee and its implication) “relatable to the economy and commercial principles which should be examined properly by an expert body and judicial interference preventing such a process would neither be just nor fair”.

“We do not find any merit in this writ petition and dispose of the same at the admission stage itself, however, with a direction to respondent No. 2 (FMC) to deal with the matter expeditiously and in any case not later than two weeks from the date of pronouncement of this judgment. No order as to costs,” the Chief Justice said.

NCDEX moved the Bombay High Court against FMC decision to scuttle its move to reduce transaction fee.

“Matters of policy and matters which squarely fall within the domain of expert bodies are normally beyond judicial review unless they are arbitrary or discriminatory or the power has been exercised contrary to the law or in a colourable manner,” the judge said.

SC JUDGEMENTS

Referring to the Supreme Court judgement in the cases of Chairman, J&K State Board of Education versus Feyaz Ahmed Malik; Federation of Railway Officers Association versus Union of India and Greater Kailash Part II Welfare Association versus DLF Universal, he said decisions of an expert body would not be interfered by the Court unless such decisions are in error in compliance with the rules, regulations and manifest injustice is perpetrated on the parties.

“In the present case, we have already dealt with the contention that FMC is vested with the power of grant of recognition and withdrawal thereof. It has power to impose conditions and one of the mandatory conditions is that the petitioner (NCDEX) should obey and carry out the directives issued by FMC from time to time. Thus, the query raised by the said respondents cannot be termed in law as no nest without jurisdiction,” it said.

It was also argued on behalf of NCDEX that they were examining the effect of resolution passed by the petitioner (NCDEX) as it may lead to unhealthy or unfair competition as other registered associations may get affected and this may also have effect on the entire business transacted through different associations.

‘Not commercial move’

The decision of the petitioner (NCDEX) is not a mere commercial decision in regard to internal management but is likely to have large ramifications on the economy and the circular will lead to excessive speculation of agricultural commodities.

These are matters which are not to be examined by this Court in exercise of its jurisdiction vested under Article 226 of the Constitution of India, the judgement said. These are matters to be examined by experts and specialised bodies. It is always better to leave such matters to be determined by the expert bodies at least at the first instance and the facts and circumstances of the present case do not justify interference by this Court and in any case at this stage of the proceedings.

Satisfying respondents

Nothing prevents the petitioners (NCDEX) from satisfying the respondents (FMC) that the circular issued by it is valid and that the apprehensions expressed by are ill founded. We also have no doubt that the authorities (FMC) concerned shall consider all such objections objectively, in the larger public interest and with due regard to commercial principles put forth by the petitioners (NCDEX) in the explanation dated January 28.

Related Stories:
HC reserves order on NCDEX plea
NCDEX moves HC against FMC

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