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The HC also slammed the NSE, saying the suit and the exchange’s conduct seem as attempts at deflection and evasion.
The HC also slammed the NSE, saying the suit and the exchange’s conduct seem as attempts at deflection and evasion.

NSE gets two-week stay on penalty in defamation case

The Bombay high court stayed the monetary penalty totalling Rs50 lakh for two weeks after which the case will come up for hearing again

Mumbai: The Bombay high court on Monday granted a two-week stay on the order against the National Stock Exchange of India Ltd (NSE) in a defamation case that the bourse filed against the financial news website Moneylife.

A division bench comprising justices V.M. Kanade and Shalini Joshi stayed the monetary penalty totalling 50 lakh for two weeks after which the case will come up for hearing again.

On 9 September, justice G.S. Patel of the Bombay high court dismissed the NSE’s case and ordered the exchange to pay 1.5 lakh each to journalists Debashis Basu and Sucheta Dalal of Moneylife. Besides this, the court had imposed a penalty of 47 lakh on NSE to be paid in the form of a donation to the Masina Hospital and Tata Memorial Hospital in Mumbai. The stock exchange had filed an appeal against the order.

An NSE spokesperson declined to comment on Monday’s stay. “The court has granted a stay on costs for two weeks when the case comes up for hearing again," said Dalal.

On 8 July, Dalal wrote an article on the website alleging that some NSE staffers were leaking sensitive data related to high-frequency trading or co-location to a select set of market participants so that they could trade faster than their competitors.

Her article was based on an alleged complaint made to the Securities and Exchange Board of India (Sebi) in January by an official of a Singapore-based hedge fund.

Co-location refers to bourses allowing members to set up automated trading systems on their premises to reduce the time required for orders to flow between the exchange and the broker’s trading system.

In response to the Moneylife article, NSE filed a defamation suit claiming damages of 100 crore in the Bombay high court.

“As you know, since inception, NSE has been maintaining a high degree of surveillance and integrity in its day-to-day operations, strictly adheres to the rules, regulations and guidelines issued by the regulators from time to time," an NSE spokesperson had said in an email response then.

Justice Patel pointed out in his ruling that Dalal had made three attempts to reach out to NSE, but was met with no response. The HC also slammed the NSE, saying the suit and the exchange’s conduct seem as attempts at deflection and evasion.

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