Bombay Stock Exchange Ltd. v. New India Assurance Co. Ltd. - (National Consumer Disputes Redressal Commission) (02 Mar 2016)
Insurer liable even if insuree does not follow own bye-laws strictly
MANU/CF/0047/2016
Consumer
The National Consumer Disputes Redressal Commission held that the Bombay Stock Exchange should not have utilised money from its Trade Guarantee Fund to meet the obligations of two defaulting members without having declared them defaulters first. It noted that BSE’s own bye-laws prohibited it from following the course of action that it did, even though amendments enabling the same were soon to be implemented. However, the Commission opined that BSE’s omission in declaring the members as defaulters immediately upon discovering default was “in order”, as it allowed them time to repay their obligations within a reasonable time. The matter, initiated by the New India Assurance company was disposed of, with BSE allowed to claim back amounts appropriated from the guarantee fund.
Relevant : Kandimalla Raghavaiah and Co. vs. National Insurance Co. and Anr. MANU/SC/1165/2009
State Bank of India vs. B.S. Agricultural Industries (I) MANU/SC/0420/2009
Tags : STOCK EXCHANGE DEFAULT GUARANTEE FUND INSURANCE
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