Commercial Suit of Multi-Commodity Exchange of India for recovery – Limitation
Respondent No.1 is the registered member of the Appellant – Exchange and regularly used its online platform for trading.
The appellant was declared as defaulter on 8th March, 2018, by the respondents for non-payment of fees, charges, dues, etc; for the period from 2008-2009 to 2015-2016.
In 2020, the appellant filed commercial suit in 2020 for Rs.12,12,980/- with interest. It was dismissed as barred by limitation.
Rule 41 of the Multi Commodity Exchange of India Limited framed under Section 4(5) read with Section 7(A) of the Securities Contract (Regulation) Act, 1956, provides for default and declaration of defaulter. Rule 42A empowers the respondent no.1 to initiate recovery proceedings against the defaulter.
HELD that the suit is ex facie barred by law of limitation. The averments and the reliefs in the plaint are purely in the nature of money recovery. The suit does not seek any declaratory reliefs to declare the respondents as defaulter under the MCS Rules. An action of labelling of the respondents as defaulter is an independent, separate consequential action arising pursuant to the default, which has already taken place. Thus, default and defaulter cannot be intermingled or confused with one another.
MCX Rules operate under completely different legal sphere. The suit does not seek any declaratory reliefs to declare the respondents as defaulters.
Judgment dated 13.3.2025 of the High Court of Bombay in Commercial First Appeal No.17 of 2024 of Multi Commodity Exchange of India Ltd Vs. M/s Madhya Bharat (International) and others.
