NSE files appeal in HC for stay on Moneylife order

Seeks stay on Rs 50-lakh penalty, which is due for payment next week

The National Stock Exchange (NSE) has filed an appeal in the Bombay High Court challenging its order in the Moneylife matter. The bourse has sought a stay on the penalty the court asked it to pay, while the court reviews its decision.

In an order on September 9, Bombay High Court judge Gautam Patel had ordered NSE to pay Rs 1.5 lakh each to Sucheta Dalal and Debashish Basu, founders of Moneylife, and Rs 23.5 lakh each to Tata Memorial and Masina Hospital as donation within two weeks. The judge had also made critical remarks against the exchange's decision not to respond to the magazine's queries.

NSE's appeal against this order is likely to come up before a division bench early next week. The two-week court deadline will expire on September 23.

"Yes, we have asked for a stay of the order in the high court," an NSE spokesperson said in an e-mail response.

Dalal said in an e-mail, "Yes indeed, they (NSE) have filed an appeal before the division bench, which comes up for hearing on Monday. This was entirely expected and I guess we will have to fight it out."

In June and July, Moneylife had published two articles, based on a whistle-blower's account alleging various irregularities in NSE's high-frequency trading (HFT) systems. It also published online the whistle-blower's letter dated

January 2015, addressed to the Securities and Exchange Board of India (Sebi). Dalal had got a copy of this (anonymous) letter by post from Singapore.

On July 21, NSE said it had moved court for Rs 100 crore in damages, for alleged defamatory statements in the articles. In the interim, it wanted the articles removed from the magazine's website.

In their reply, Dalal and Basu had given proof of e-mails and text messages sent to seek responses from NSE's managing director & chief executive officer Chitra Ramkrishna, and vice-chairman Ravi Narain.

Dalal had sent a mail addressed to Sebi Chairman U K Sinha, with copies to Ramkrishna and Narain on June 11. She followed this up with a reminder mail on June 15 and a text message on June 16. The article was published on June 19. Moneylife then published a second article on July 8, seeking a detailed probe into HFT at the exchange.

The two journalists told the HC that Moneylife's coverage of the whistle-blower account was in public interest and they had followed fair journalistic practices. The bourse had said the reply by Basu and Dalal did not provide conclusive proof of wrongdoing by NSE.

Last week, the exchange had told Business Standard it had responded to Sebi's queries on the whistleblower allegations and defended its HFT systems and processes.