Bye-laws of NSE are applicable on their own and binding on all whether the parties agree to abide by it or not.

( 1 ) - The writ petitioner No. 1 is a company registered under Companies Act, 1956 (hereinafter called the petitioner company) and the writ petitioner No. 2 is one of the directors of the petitioner company. The petitioner-company is a registered stock broker and is a trading member of National Stock Exchange of India Limited (hereinafter called NSE ).

( 2 ) THE respondent No. 5 is also a company, registered under Companies Act and it has opened an account with the petitioner-company.

( 3 ) THE petitioner's case is that in the year 1996 under instruction from respondent No. 3, the petitioner-company opened an account being No. K 005 in the name of the respondent No. 3. Thereafter, in 1997 respondent No. 3 introduced his son, the respondent No. 4, and on their joint requests, the petitioner-company opened another account being No. S025 in the name of respondent No. 4 with respondent No. 3. The further case of the petitioner-company is that on 17th April, 1999 in terms of instruction given by respondent Nos. 3 and 4, the petitioner-company purchased 4000 equity shares of GMDC Limited with its own fund and the said purchase was duly entered in the account No. S025 of the respondent No. 4 but the price including the commission of the petitioner-company remained due. The petitioners state that thereafter, the respondent No. 3 and 4 introduced the respondent No. 5 to the petitioner-company as their sister concern and on the request of respondent Nos. 3 and 4 the petitioner-company opened an account in the name of respondent No. 5 being account No. B037. On or about 23rd April, 1999 the respondent No. 2 and 3 made over a cheque to the petitioner-company for a sum of Rs. 1,95,047/- drawn by respondent No. 5 in favour of the petitioner-company with request to the petitioner to transfer the said 4000 equity shares, so purchased in the name of respondent No. 4, in favour of the respondent No. 5 and the petitioner-company did act accordingly. On or about 18th May, 1999 as instructed by respondent No. 3, the petitioner-company sold and transferred 1000 equity shares of GMDC Limited out of 4000 so purchased and the sale proceeds of Rs. 69,550/- was entered into the account of respondent No. 5. Thereafter, on 11th June, 1999, the respondent No. 5 requested the petitioner-company to transfer the remaining 3000 equity shares of GMDC Limited in favour of the respondent No. 5. To that the petitioner-company demanded the dues of respondent No. 5 as per its account duly maintained by the petitioner-company. The case of the petitioner-company is that respondent No. 5 failed to make the payment of the dues to the petitioner-company.

( 4 ) AS the petitioner-company was refusing to transfer the shares, the respondent No. 5 by a letter dated 8th June 1999 informed the NSE of the said conduct of the petitioner-company and in the said letter a request was made to NSE to direct the petitioner-company to immediately deliver the 3000 equity shares to the respondent No. 5 and if the petitioner-company fails to do so, refer the case to arbitration. A copy of the said letter was also sent to the petitioner-company. In reply thereto, the petitioner-company wrote a letter to NSE refuting the claim of respondent No. 5 but in the said letter the petitioner-company did not raise any objection to the claim for arbitration raised in the letter dated 8th June 1999 written by respondent No. 5.

( 5 ) IN view of the aforesaid facts, the NSE in its reply by a communication dated 20. 11. 2001 informed the petitioner to submit its defence to such arbitration proceedings and in the event of the petitioner's failure to do so, the petitioner was informed that Arbitrator may be appointed to proceed with the arbitral proceeding.

( 6 ) THE petitioner challenged the said communication of NSE, inter alia, contending that in the absence of any arbitration agreement between the petitioner and the respondent No. 5, the said direction on the petitioner-company