The Hindu Business Line : Transaction fee row: NCDEX moves SC

Mumbai, May 4 The National Commodity and Derivative Exchange (NCDEX) moved the Supreme Court on Monday against the market regulator Forward Markets Commission (FMC) for rejecting its proposal to reduce the transaction fee.

Mr Unupom Kausik, Chief Business Officer, NCDEX, said: “We have filed a special leave petition (SLP) in the Supreme Court against FMC order on transaction fee and it has been accepted.”

In February, the High Court had rejected NCDEX writ petition against FMC order on the same transaction issue. Mr Rajeev Agarwal, Member, FMC, said: “I cannot comment on the development as we have not yet received any notice.”

In a bid to boost its sagging turnover, NCDEX in January had proposed to charge an uniform charge of Rs 3 per lakh of the total value of all trades in all commodities from 10 a.m. to 5 p.m., while it will be five paise per lakh of value of all trades in the second session starting 5 p.m. to 11 p.m.

The reduction in transaction was targeted at attracting trading volumes especially in metals segment, which are largely traded after 5 p.m. to take advantage of the cues emanating from the international markets.

Exchange’s stand

Clarifying the exchange’s stand on the issue, Mr Ramaseshan, Managing Director, NCDEX, said in a note to investors that, “the move to reduce transaction fee after 5 p.m. was necessitated to boost revenue from non-agricultural commodities as trading interest in agriculture commodities fell after the Government ban.”

Delivering the verdict on the writ petition, Chief Justice, Dr D.Y. Chandrachud, had said in his judgment 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.

HC verdict

“We do not find any merit in this writ petition and dispose off 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 judgment said.

Referring to the Supreme Court judgment in the case 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, the judgment said decisions of an expert body would not be interfered by the Court unless such decisions were in error in compliance with the rules, regulations and manifest injustice is perpetrated on the parties.

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