The Securities Appellate Tribunal (SAT) today directed the Bombay Stock Exchange (BSE) to pay Rs 2.21 crore, along with 10% interest, to Emmel Financial Services as the money has been lying with the bourse since 2002.
SAT directed BSE to pay from the fund of Nikko Stock Brokers, lying with the exchange after it invoked bank guarantee of the stock broker.
"Since payment to the Emmel has been sufficiently delayed for which BSE is to be blamed, we further direct the exchange to pay from its own funds interest to the financial services firm at the rate of 10% from the date of award till the date of payment," the order said.
The order has to be implemented within two weeks in case BSE does not decide to move the Supreme Court against it.
Emmel Financial Services moved to BSE in 2001 claiming that Rs 3.14 crore was due to it from broker Nikko Stock Brokers.
BSE's Arbitration Tribunal gave its award, dated December 31, 2001, holding that the broker was liable to pay to Emmel Rs 2.6 crore.
Subsequently, Emmel approached BSE on January 16, 2002, requesting BSE to pay Rs 2.21 crore to the income tax authorities on its behalf from the funds of the broker that was due to it.
That was not even contested by the broker, and BSE should have immediately debited account of the broker, SAT observed.
"We wonder why BSE did not carry out the directions of the (Sebi) board which it ought to have and we cannot appreciate its adamant attitude in this regard. It should have given a more thoughtful consideration to the matter particularly when it had received directions from the Board," the order said.
BSE did not pay the amount to Emmel as other claimants cropped up during 90 days of the arbitration award. It wanted Emmel to collect the dues from the Defaulters Committee of the exchange which is mandated to distribute the money in proportion to the claim.
On February 25, 2002, Nikko Stock Brokers was declared defaulter and the money was lying in the broker's fund could not be accessed.