SC relief for Sebi, NSE, BSE for erroneously freezing accounts of 2 Mumbai residents
SEBI) and the country’s two stock exchanges –National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), the Supreme Court on Monday set aside a Bombay High Court order that imposed a cost of Rs 80 lakh on them for “illegally” freezing the demat accounts of two Mumbai residents Dr Pradeep Mehta and his son Neil Pradeep Mehta.
Their demat accounts were erroneously frozen in 2017 as Pradeep Mehta happened to be one of the promoters of Shrenuj & Co at one point of time. Shrenuj could not file its quarterly earnings for April-June, July-September and October-December in 2016.
A Bench led by Chief Justice DY Chandrachud noted that the HC had reserved its order in March on the father-son's petitions seeking direction to National Securities Depository Ltd to transfer their securities lying in the omnibus system to their demat account pending disposal of the case. However, the HC in its August verdict had set aside the freezing orders and imposed penalty without hearing the market bodies, the CJI said, adding that it was an error on the part of the HC.
Restoring the Mehtas’ case in the HC, the Bench gave liberty to the duo to seek interim relief from the HC, which had in August had termed the action of freezing Mehtas’ demat account as “grossly illegal, arbitrary and unconstitutional.”
The HC had also pulled up SEBI, NSE and BSE, saying such action on the part of the statutory bodies was likely to shake the confidence of investors who are non-residents Indians. “This is certainly not what can be expected from the
