A significant ruling was delivered by the Supreme Court Of India in a case involving Clearing Corporation Limited and IL & FS Securities Services Limited. The judgement touches upon crucial aspects of the financial services industry, emphasizing compliance and accountability. Stay informed about the latest legal proceedings and rulings that shape the securities sector.
Facts
- Clearing Corporation Limited will honour the F & O Segment contract which matured on 27 June, 2019.
- The payment for the matured contract had not been made due to an interim order passed by the Court on 26 June, 2019.
- Novjoy Emporium Private Limited, OCL India 2 Limited, and Dalmia Cement East Limited have the option to request conversion/sale/encashment of the mutual funds provided as security by Allied Financial Services Private Limited.
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Decision
- The interim order is vacated, clarifying that the payments would be without prejudice to the rights and contentions of all parties.
- Security permission to file appeal is granted to IL & FS Securities Services Limited and 44 other parties who had preferred Appeal No. 257/2019 before the Securities Appellate Tribunal, Mumbai.
- IL & FS Securities Services Limited shall convert/encash mutual funds and deposit the amount realized in a fixed deposit in a Nationalized Bank for six months to earn maximum interest.
- The deposit would be in the name of IL & FS Securities Services Limited and abide by further orders/directions of the Court.
- The question of jurisdiction of Securities and Exchange Board of India, Securities Appellate Tribunal, and the plea of IL & FS Securities Services Limited relying upon clause (5) of Chapter VII of the Bye-Laws framed by the National Security Clearing Corporation Limited is left open and will be decided at the time of final hearing.
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Case Title: SECURITIES AND EXCHANGE BOARD OF INDIA Vs. IL AND FS SECURITIES SERVICES LTD.
Case Number: C.A. No.-005395-005398 / 2019
