JUDGMENT

1. The present First Appeal is filed by the Appellant, being aggrieved by the judgement and decree dated 29th April 2017 passed by the learned Bombay City Civil Court in City Civil Court Suit No. 7708 of 2000, whereby the following order came to be passed:

“ORDER

1. The Suit No. 7708 of 2008 (H.C. Suit No. 164 of 2000) is dismissed with costs.

2. Decree be drawn up accordingly.

3. Accordingly, suit is disposed of.”

Facts:-

2. The case of the Appellant is as follows:

I) The Appellant is a share and stock broker and a member of the Respondent Stock Exchange, Bombay (hereinafter referred to as the “Respondent-Exchange”). The Appellant is a recognised member of the Respondent-Exchange, and carries on business as a proprietor of the firm in the name and style of M/s. Ishwarlal Nanavati, having Clearing No. 279. The Respondent-Exchange is a recognised Stock Exchange under the Securities Contracts (Regulation) Act, 1956 (“SCRA”). The Respondent-Exchange and its members are governed, inter alia, by the Rules, Bye-Laws and Regulations of the Respondent-Exchange, which have statutory force.

II) Sometime on 9th September 1996, in the course of its brokerage business, the Appellant purchased 44,600 shares of Energy Products India Limited (“EPL”), bearing Scrip Code No. 531620, in Settlement No. 14/96-97 (B2 Group Securities).

III) The aforesaid purchase was made by the Appellant on behalf of its clients. It is the Appellant’s contention that, upon purchase of the said shares from the open market through the Respondent-Exchange, the requisite confirmations, memos, contract notes, bills and other relevant documents were duly issued to the respective parties.

IV) It is also the Appellant’s contention that the aforesaid 44,600 shares were purchased during Settlement No./Valan No. 14/96-97, for the period commencing from 9th September 1996 and ending on 13th September 1996.

V) It is further the Appellant’s contention that, in respect of the transaction involving the aforesaid 44,600 shares, the Respondent-Exchange issued a statement of payments and receipts. It was thereafter that the Appellant came to know that the transaction pertaining to the entire quantity of 44,600 shares had been executed with three other member-broker of the Respondent-Exchange, who had acted as vendors on behalf of their respective clients. The relevant broker members and the quantity of stock of shares sold by them to the Appellant's clients are as follows:

The pay-in and pay-out dates for settlement number 14/96-97 was 9th September 1996 and 13th September 1996 respectively.

3. Pursuant to the Rules, Regulations and Bye-Laws of the Respondent- Exchange and in accordance with the procedure and practice followed by the Respondent-Exchange, a statement of Payment and Receipt bearing statement No. 19-20 dated 4th October 1996 was issued. By the said statement, the Appellant’s account was debited with an amount of Rs. 22,30,000/- towards the purchase of 44,600 shares through the Respondent-Exchange.

4. Further, by way of the deliver and receive order for settlement No. 17/96-97, the aforesaid 44,600 shares were to be delivered by the following members to the Appellant:

A: 4,500 shares by Mr. Gautam Nemani

B: 18,500 shares by Mr. Hasmukhlal Shah

C: 21,600 shares by Mr. K. F. Vora (the disputed shares)

5. It is the Appellant’s contention that, in accordance with the Rules and Regulations of the Respondent-Exchange, the Appellant was required to deposit the requisite amount with the Clearing House of the Respondent-Exchange within one week from the date of issuance of the statement of Payment and Receipt. Upon such deposit, the Appellant would, after the expiry of a further period of one week, be entitled to receive physical delivery of the shares from the Clearing House.

6. Considering that the pay-in and pay-out dates for settlement No. 17/96-97 were 10th October 1996 and 14th October 1996, respectively, the Appellan