Bombay High Court
ITC LIMITEDversusMETROPOLITAN STOCK EXCHANGE
- Decided
- Disposal
- DISPOSED OFF
Holding
The Court held that the communications directing arbitration are not void and that the allocation to MSE does not constitute a patent jurisdictional defect, so the petitioner must comply with the arbitration proceedings.
Summary
The Bombay High Court considered ITC Limited’s writ petition challenging two communications issued by the Metropolitan Stock Exchange (MSE) and Jupitice Justice Technology Private Ltd. under SEBI’s Online Dispute Resolution (ODR) framework. ITC argued that MSE lacked jurisdiction because its securities are not listed on MSE and that the round‑robin allocation of the complaint was improper, also raising objections of limitation, lack of standing, res judicata and abuse of process. The Court examined the Master Circular’s provisions on allocation, limitation and mandatory participation in arbitration, and held that the mere fact of non‑listing does not, by itself, render the ODR process void. It found no patent jurisdictional defect warranting writ interference and directed ITC to comply with the arbitration requirements while preserving its right to raise substantive objections before the arbitral forum. Consequently, the petition was dismissed.
Issues considered
- Whether MSE has jurisdiction to entertain the dispute under the SEBI ODR framework when the petitioner’s securities are not listed on MSE.
- Whether the round‑robin allocation of the complaint to MSE under the Master Circular is valid.
- Whether the limitation period under paragraph 14 of the Master Circular bars the arbitration.
- Whether the complainant has locus standi to claim the bonus shares.
- Whether the dispute arising from a 1989 transaction falls within the scope of the ODR mechanism introduced in 2023.
- Whether the petitioner’s objections amount to a patent jurisdictional defect justifying writ intervention.
- Whether repeated complaints constitute res judicata or abuse of process.
Legislation cited
Subjects
- Online Dispute Resolution
- Arbitration
- Jurisdiction
- Securities Market
- Limitation
- Res Judicata
- Locus Standi
- Round-robin allocation
- SEBI
- Stock Exchange
- Writ Petition
- Article 226
Judgment
WP/694/2025
ITC vs. MSE & Ors.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 694 OF 2025
ITC Limited }
a company under Companies Act 2013 }
and having its registered office at 37, }
Jawaharlal Nehru Road, Kolkatta – 700071 }
and local office at World Trade Centre }
18th Floor, Centre I, Cuffe Parade, Colaba, }
Mumbai – 400005. } … Petitioner
V/s.
1. Metropolitan Stock Exchange }
a notified Stock Exchange recognized }
under the Companies Act 1956 and }
having its registered address at 2nd Floor, }
Piramal Agastya Corporate Park, }
Building A, Unit 205A, }
Lal Bahadur Shastri Marg, Kurla West, }
Mumbai, Maharashtra 400070. }
2. Mr. Ashok Mootha }
residing at Flat No. 2, Ashirwad Apartments, }
172, L.C. Street CH 1, Nawat New 27 Burkair Road, }
T, Nagar, Chennai – 600001. }
3. Jupitice Justice Technology Private Ltd. }
A company incorporated under Section 8 }
of the Indian Companies Act 2013 }
having registered address at Plot No. 14, }
Rajiv Gandhi Chandigarh Technology Park, }
Adjoining Infosys, Chandigarh, India 160101. }
4. Securities and Exchange Board of India, }
Page 1 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
SEBI Bhavan, BKC, Plot No. C4-A, G Block, }
Bandra-Kurla Complex, Bandra (E), }
Mumbai – 400051. } ... Respondents
___________________________________________________________________
Mr. Kevic Setalvad, Senior Advocate a/w Mr. Anupam Surve, Mr. Nimish Kothare,
Ms. Hilla Boatwalla and Ms. Ashwini Sonawane i/b Nanu Hormasjee & Co. for
Petitioner.
Mr. Rajesh More for Respondent No. 1.
Mr. Akshon K (through VC) for Respondent No. 2.
Mr. Akash Jain a/w Mr. Bhushan Shah, Mr. Abhishek Nair and Ms. Sayali
Kshirsagar i/b Mansukhlal Hiralal & Co. for Respondent no. 4 (SEBI).
___________________________________________________________________
CORAM : R. I. CHAGLA AND
FARHAN P. DUBASH, JJ.
RESERVED ON : 22nd JULY 2026
PRONOUNCED ON : 21st AUGUST 2026
___________________________________________________________________
JUDGMENT (Per Farhan P. Dubash, J):
1. The present Writ Petition under Article 226 of the Constitution of India
takes exception to the communications dated 24 th October 2024 and 26th
November 2024 (“impugned communications”) issued by Respondent Nos.
1 and 3 under the Online Dispute Resolution mechanism introduced by the
Securities and Exchange Board of India (“SEBI”) pursuant to its Master
Circular dated 31st July 2023 (“Master Circular”). By the impugned
communications, the Petitioner has, inter alia, been called upon to
participate in the arbitral proceedings initiated by Respondent No. 2 and to
comply with the requirements relating to payment of arbitral fees.
2. The Master Circular seeks to streamline the existing dispute-resolution
Page 2 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
mechanism in the Indian securities market under the aegis of Stock
Exchanges and Depositories, collectively referred to as Market
Infrastructure Institutions (“MIIs”), by establishing a common Online
Dispute Resolution Portal (“ODR Portal”) which provides for resolution of
disputes through online conciliation and online arbitration.
3. Respondent No. 1, Metropolitan Stock Exchange of India Limited (“MSE”),
is an MII participating in the framework established under the Master
Circular. Respondent No. 2 is the complainant (“Complainant”) who has
raised the dispute against the Petitioner. Respondent No. 3, Jupitice Justice
Technology Private Limited (“ODR Institution”), is an ODR Institution
empanelled by MSE and is engaged in facilitating and administering online
alternative dispute resolution under the ODR framework.
4. The principal grievance of the Petitioner is that MSE lacks jurisdiction to
entertain the dispute raised by the Complainant, since the securities of the
Petitioner are neither listed nor traded on MSE. It is the Petitioner’s case
that the complaint could only have been dealt with by the relevant Stock
Exchange in accordance with the Master Circular and that the mere
allotment of the complaint to MSE through the ODR Portal cannot confer
jurisdiction where none otherwise exists.
B R I E F FA C T S
5. Before considering the rival submissions, it would be appropriate to set out,
in brief, the facts necessary for adjudication of the present Petition:
Page 3 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
(a) The dispute has its genesis in the year 1989, when Mr. Prakash Chand
Baid (“Mr. Baid”) is stated to have purchased 85 shares (“Base Shares”)
of the Petitioner from Mr. J. B. Malhotra, Mr. N. Vaidyanathan and Ms.
U. Ratna Rao (“original shareholders”).
(b) At the relevant time, the Petitioner declared a one-to-one bonus issue
pursuant to a Board Resolution dated 11 th August 1989. The record date
was fixed as 19th September 1989 and the date of issue as 21 st
September 1989. Since the Base Shares stood in the names of the
original shareholders on the record date, 85 bonus shares (“Bonus
Shares”) were issued in their names under Share Certificate Nos.
501009, 440799 and 469766, bearing Distinctive Nos. 41285522 – 546,
38231544 – 553 and 39741327 – 376, respectively.
(c) The Base Shares were thereafter registered in the name of Mr. Baid on
28th September 1989. Mr. Baid is stated to have subsequently transferred
the Base Shares to Mr. N. Ramaswamy under a transfer deed dated 20 th
March 1990.
(d) By a letter dated 20 th April 1990, the Petitioner, through its erstwhile
share transfer agent, informed Mr. Baid that the Bonus Shares would be
kept in abeyance pending submission of duly completed transfer forms.
According to the Petitioner, no such forms were thereafter submitted.
(e) SEBI was subsequently established under the Securities and Exchange
Board of India Act, 1992.
Page 4 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
(f) In response to letters dated 2 nd/3rd May 1994 addressed by the
Complainant, who claims to have been the stock broker of Mr. Baid,
complaining of non-receipt of the Bonus Shares, the Petitioner, by its
letter dated 10th May 1994, informed the Complainant that the Bonus
Shares had inadvertently been returned to the original shareholders.
(g) By Circular dated 3rd June 2011, SEBI introduced, with effect from 20 th
May 2011, an electronic investor grievance-redressal mechanism known
as the SEBI Complaints Redress System (“SCORES Portal”).
(h) More than two decades after the Bonus Issue, the Complainant
commenced correspondence with the Petitioner in 2014 seeking details
of the Bonus Shares and the corporate benefits allegedly accruing
thereon. The Petitioner is stated to have responded and also requested
the original shareholders to return the Bonus Shares. No response is
stated to have been received from the original shareholders.
(i) The Complainant thereafter asserted entitlement to the Bonus Shares
and the corporate benefits accruing thereon. In 2015, he is stated to have
produced a Power of Attorney allegedly executed by Mr. Baid in his
favour, though the Petitioner disputes having been furnished a copy
thereof.
(j) The Petitioner, in response, provided the Complainant with details of
the original shareholders and requested him to pursue the matter with
them.
Page 5 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
(k) In 2016, one Mr. V. Narayanan, claiming to be the legal heir of one of
the original shareholders, sought issuance of duplicate shares. The
Petitioner replied that it was unable to take any action and requested Mr.
Narayanan to resolve the issue with the Complainant.
(l) The Complainant thereafter addressed a notice dated 11 th April 2019 to
the original shareholders calling upon them to hand over the Bonus
Shares, failing which legal proceedings would be initiated.
(m) By a letter dated 15th March 2021, the Complainant sought from the
Petitioner transfer of the Bonus Shares and the related corporate
benefits in his favour.
(n) In 2021, the Complainant lodged a complaint against the Petitioner on
the SCORES Portal. According to the Petitioner, the complaint was
dismissed and closed on 16th August 2021 and was not thereafter
challenged.
(o) With effect from 31st July 2023, SEBI introduced the ODR framework
under the Master Circular providing for online conciliation and
arbitration in disputes arising in the Indian securities market.
(p) Thereafter, the Complainant is stated to have filed several complaints
against the Petitioner on the ODR Portal, which were allotted on a
round-robin basis to various MII’s, including the National Stock
Exchange (“NSE”), Bombay Stock Exchange (“BSE”), National
Securities Depository Limited (“NSDL”), Central Depository Services
(India) Limited (“CDSL”) and MSE. According to the Petitioner, the
Page 6 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
said complaints came to be rejected or dismissed on grounds including
limitation, locus, jurisdiction, maintainability and duplication.
(q) Notwithstanding the earlier proceedings, the Complainant lodged
another complaint against the Petitioner on the ODR Portal, stated by
the Petitioner to be the fourteenth such complaint, which was allotted to
MSE on 25th August 2024. The Conciliation Officer appointed by
Respondent No. 3 issued a Conciliation Report dated 16 th October 2024
recording that the complaint was time-barred. The conciliation process
consequently ended without settlement.
(r) On 24th October 2024, the Petitioner requested MSE not to entertain any
further complaint from the Complainant, principally on the ground that
MSE lacked jurisdiction since the securities of the Petitioner were
neither listed nor traded on MSE. By a letter of the same date, MSE
replied acknowledging that the Petitioner’s securities were not listed on
its exchange, but stating that the complaint had been allotted to it
through the ODR Portal on a round-robin basis in accordance with the
Master Circular.
(s) On 28th October 2024, the Petitioner addressed communications to SEBI
setting out the history of the complaints lodged by the Complainant
before various stock exchanges and requesting SEBI to examine the
matter. It is stated that SEBI thereafter discussed the issue
telephonically with the Petitioner’s Compliance Officer and informed
the Petitioner that SEBI was not empowered to grant an entity-specific
exemption or adjudicate the objections raised by the Petitioner, which
could be urged before the appropriate arbitral forum.
Page 7 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
(t) Thereafter, by an email dated 26th November 2024, MSE, through
Respondent No. 3, informed the Petitioner that the Complainant had
initiated arbitration and called upon the Petitioner to comply with the
applicable requirements, including payment of the arbitration fees.
(u) The Petitioner, by communication dated 13th January 2025, called upon
Respondent Nos. 1 and 3 to cease further proceedings.
(v) The Petitioner has thereafter approached this Court by the present Writ
Petition.
SUBMISSIONS OF THE PETITIONER
6. Mr. Kevic Setalvad, learned senior advocate appearing for the Petitioner,
submits that the impugned communications are ex facie without
jurisdiction. According to him, MSE has no jurisdiction to entertain the
dispute since the securities of the Petitioner are admittedly neither listed nor
traded on MSE. He therefore argues that the continuation of the proceedings
before MSE is contrary to the scheme of the Master Circular.
7. He submits that the grievance raised by the Complainant, at its highest,
concerns disputed questions relating to rectification of the register of
members and entitlement to shares and corporate benefits. He submits that
such questions cannot be adjudicated under the ODR mechanism and would
have to be pursued before the competent Court or Tribunal.
8. Mr. Setalvad further submits that the ODR mechanism was introduced only
Page 8 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
on 31st July 2023 and cannot be invoked in respect of a cause of action
which arose in 1989. He submits that, under the Master Circular, a dispute
concerning a listed company is required to be referred to the ODR
Institution empaneled by the relevant Stock Exchange and that, in the
present case, the relevant exchange is BSE and not MSE. He argues that
MSE, which was not the relevant exchange in relation to the Petitioner,
could not acquire jurisdiction merely because the ODR Portal allotted the
complaint to it on a round-robin basis.
9. He submits that the Bonus Shares were issued on 21 st September 1989 in the
names of the original shareholders and that the Complainant’s claim, raised
after more than three decades, is ex facie barred by limitation. It is
submitted that the complaint was consequently not maintainable under
paragraph 14 of the Master Circular and ought not to have proceeded to
arbitration.
10. Mr. Setalvad further submits that the Complainant’s grievance arises out of
events of 1989 and that substantially identical complaints have repeatedly
been lodged and rejected. According to him, the repeated invocation of the
ODR mechanism amounts to an abuse of the process and the present
proceedings constitute yet another attempt to reagitate the same dispute.
11. It is submitted that the Complainant has approached several authorities,
including NSE, BSE, NSDL, CDSL and MSE, in relation to the same Bonus
Shares and the same alleged cause of action. According to the Petitioner, the
complaints have repeatedly been rejected on grounds including limitation
and maintainability. The present complaint is therefore contended to be a
further attempt to reopen an issue which has already been considered.
Page 9 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
12. Mr. Setalvad submits that the complaint and the consequential arbitral
proceedings are barred by principles analogous to res judicata and constitute
an abuse of process. He argues that the Complainant ought not to be
permitted to repeatedly invoke the ODR mechanism in respect of the same
cause of action.
13. He further submits that although the Complainant describes himself as a
share broker, he has instituted the complaints in his own name asserting
rights over the Base Shares and Bonus Shares. He submits that there is no
valid document evidencing transfer of the Base Shares by the registered
shareholder, Mr. Baid, in favour of the Complainant. According to him, the
Complainant therefore lacks locus to assert a personal claim against the
Petitioner in respect of the shares or the corporate benefits allegedly
accruing thereon.
14. It is lastly submitted that the Petitioner is being compelled to deposit the
requisite amount and participate in arbitral proceedings before a forum
which, according to the Petitioner, lacks jurisdiction. The impugned
communications are therefore contended to be void ab initio and liable to be
quashed.
SUBMISSIONS OF SEBI
15. Per contra, Mr. Akash Jain, learned counsel appearing for SEBI, submits
that the reliefs sought by the Petitioner are impermissibly wide and, if
granted, would operate as a blanket prohibition against Respondent Nos. 1
and 3 and would materially interfere with the round-robin allocation
Page 10 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
mechanism prescribed by the Master Circular.
16. He further submits that such a restraint would undermine the uniform
dispute-resolution framework established by SEBI for facilitating and
integrating alternative dispute-resolution mechanisms in relation to disputes
arising from transactions in the securities market between investors,
intermediaries and other market participants. The Petition, according to
SEBI, is therefore liable to be dismissed.
A N A LY S I S , R E A S O N S A N D F I N D I N G S
17. We have heard the learned counsel appearing for the parties and perused the
material placed on record. The principal question which arises for
consideration is whether the initiation and continuation of arbitral
proceedings against the Petitioner through the ODR mechanism, pursuant to
the complaint lodged by Respondent No. 2 and its allocation to MSE,
disclose such a patent lack of jurisdiction or authority, as would warrant
interference by this Court in exercise of its extraordinary writ jurisdiction.
The Petitioner has raised several objections, including want of jurisdiction,
limitation, lack of locus, maintainability, repetition of proceedings, res
judicata, abuse of process and the alleged non-arbitrable nature of the
dispute. It is necessary to examine the nature of these objections and, more
importantly, whether their existence justifies interdiction of the arbitral
process at its inception.
18. At the outset, we are unable to accept the broad submission that the very
initiation of arbitration must necessarily be prohibited merely because the
Petitioner disputes the maintainability of the underlying complaint. The
Page 11 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
jurisdiction exercised by this Court under Article 226, in the facts of the
present case, is not an appellate jurisdiction over the proceedings conducted
under the ODR mechanism.
19. The Court is required to examine whether the impugned action is
demonstrably without authority, contrary to the governing regulatory
framework, or otherwise suffers from a jurisdictional defect of such patent
character as would warrant intervention at the threshold. The Court is not, at
this stage, called upon to determine the merits of the dispute viz. substantive
entitlement of the Complainant to the Bonus Shares or the corporate
benefits claimed by him. Nor is it appropriate for this Court, in these
proceedings, to adjudicate disputed questions concerning limitation, locus,
maintainability, res judicata or the effect of the previous complaints, unless
the material on record establishes a clear and patent bar to the proceedings
themselves.
20. It would therefore be appropriate first to examine the architecture of the
ODR mechanism under the Master Circular and, in particular, the
provisions governing initiation, allocation, conciliation and arbitration.
21. The Master Circular establishes a structured mechanism for resolution of
disputes arising between investors or clients and listed companies and
specified intermediaries or regulated entities in the securities market. The
mechanism contemplates escalation of an unresolved grievance and
thereafter its reference to the ODR Portal for online dispute resolution. The
scheme is therefore not merely an optional administrative facility but a
regulatory dispute-resolution mechanism established by SEBI for specified
disputes arising in the securities market.
Page 12 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
22. Paragraph 14 of the Master Circular is also of significance. It provides that
dispute resolution through the ODR Portal may be initiated only within the
applicable period of limitation, reckoned from the date on which the issue
arose or occurred resulting in the complaint, the date of the last transaction,
or the date of the disputed transaction, whichever is later. The Petitioner
therefore undoubtedly has a substantive objection on limitation. The
question, however, is whether that objection, by itself, renders the initiation
of arbitration a nullity or whether it is an objection which is required to be
adjudicated in the arbitral process.
23. The next relevant provision of the Master Circular is paragraph 16, which
deals with allocation of disputes to ODR Institutions. It provides for a
market-wide round-robin allocation system, subject to the specific
stipulation that, during the relevant period, complaints or disputes arising
with a specific trading member in relation to an exchange transaction or
with a listed company are to be referred to the ODR Institution(s)
empaneled by the relevant Stock Exchange. The footnote to paragraph 16
further addresses the situation where an intermediary is linked to more than
one Stock Exchange or where a company is listed on more than one Stock
Exchange. The allocation provision is therefore required to be read as a
whole. The round-robin mechanism cannot be considered in isolation from
the express qualification contained in paragraph 16(a).
24. In the present case, the Petitioner principally relies upon this qualification
and submits that MSE is not the relevant Stock Exchange for the Petitioner.
This objection is undoubtedly a serious one. At the same time, the question
whether the complaint was correctly allocated under paragraph 16 depends
Page 13 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
upon the precise status of the Petitioner, the Stock Exchange(s) on which its
securities were listed at the relevant time, the nature of the grievance raised
by the Complainant and the manner in which the complaint came to be
allocated through the ODR Portal. The mere fact that the Petitioner’s
securities are not listed on MSE cannot, standing alone, be treated as
conclusively establishing the absence of authority of every participant in the
ODR mechanism. The question is whether, on a proper application of
paragraph 16 and the facts relevant to the allocation, the reference to MSE
was impermissible.
25. We are also required to consider the consequence of the subsequent
transition from conciliation to arbitration. Paragraph 20(b) of the Master
Circular provides that, where the dispute remains unresolved after
conciliation, the investor/client may pursue online arbitration, subject to
payment of the applicable fees. The provision further states that the Market
Participant against whom arbitration is pursued shall participate in the
arbitration process and prescribes the consequential obligations regarding
deposit of the admissible claim value and payment of arbitration fees. The
language employed in paragraph 20(b) is undoubtedly mandatory. Once a
dispute has validly entered the ODR framework and the conciliation process
has concluded without resolution, the Market Participant cannot, merely by
expressing its disagreement with the claim, elect not to participate in the
arbitral process.
26. The provision, however, cannot be read as conferring jurisdiction where the
Master Circular itself excludes the dispute from the ODR framework or
where there is a patent and demonstrable absence of jurisdiction. The
obligation to participate necessarily operates within the four corners of the
Page 14 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
Master Circular. This distinction is material. Participation in arbitration does
not, by itself, amount to an admission of the claim, nor does it necessarily
constitute a waiver of a legally sustainable objection to jurisdiction,
limitation, maintainability, locus or arbitrability. Those objections may be
urged before the arbitral forum and must be considered in accordance with
law. In other words, the mandatory character of paragraph 20(b) does not
render every objection raised by a Market Participant incapable of
consideration. What it does, is prevent the Market Participant from
unilaterally bringing the ODR process to an end merely because it disputes
the claim.
27. In the present case, the Petitioner seeks to place before this Court, at the
threshold, a series of objections which go substantially to the
maintainability and merits of the Complainant’s claim. The Petitioner relies
upon the considerable lapse of time, the previous complaints, the alleged
absence of locus, the alleged absence of a valid transfer in favour of the
Complainant and the nature of the relief claimed. These are undoubtedly
matters which the Petitioner is entitled to raise but before the appropriate
arbitral forum. Merely the fact that an objection is substantial does not, by
itself, convert it into a jurisdictional bar warranting exercise of writ
jurisdiction.
28. The same consideration applies to the submission founded upon repeated
complaints. We do not, at this stage, express any opinion on whether the
earlier proceedings operate as res judicata, constitute an abuse of process, or
otherwise bar the present claim. Those questions would require examination
of the nature of each earlier proceeding, the orders passed therein, the
parties thereto, the reliefs claimed and the basis on which the complaints
Page 15 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
were disposed of. It would neither be appropriate nor desirable for this
Court, in the present proceedings, to undertake such an adjudication when
the regulatory framework itself provides for an arbitral forum.
29. The Petitioner’s grievance that the Complainant has approached several
authorities on the same subject cannot, however, be brushed aside. Repeated
invocation of a statutory or regulatory dispute-resolution mechanism cannot
be permitted to become a means of indefinitely reopening concluded
proceedings. But whether that principle applies on the facts of the present
case, and what consequence should follow from the earlier proceedings, are
matters which can appropriately be placed before the arbitral forum.
30. We also find no merit, at this stage, in the submission that the mere age of
the underlying transaction renders the present arbitral proceedings non-est.
The Master Circular itself contains a specific provision concerning
limitation. Whether the Complainant’s claim satisfies that requirement is
therefore a matter which can be tested by applying paragraph 14 to the facts
of the claim. The fact that the underlying transaction dates back to 1989
does not, by itself, permit this Court to dispense with the adjudicatory
process contemplated by the Master Circular.
31. The submission regarding locus stands on substantially the same footing.
The Petitioner contends that the Complainant is not the registered
shareholder and has not produced any valid instrument establishing his
entitlement to assert a claim in respect of the Base Shares or Bonus Shares.
The Complainant, on the other hand, asserts a contrary entitlement. This is a
disputed question going to the maintainability and substantive basis of the
claim. It cannot, in our view, be conclusively determined in the present writ
Page 16 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
proceedings merely on the basis of the Petitioner’s assertion.
32. We are equally unable to accept the submission that the nature of the
grievance, by itself, takes the dispute outside the ODR framework. The
Master Circular expressly contemplates disputes between investors/clients
and listed companies and specified intermediaries or regulated entities,
including disputes concerning services rendered in the securities market.
Whether the particular relief claimed by the Complainant falls within that
regulatory framework is, once again, a matter to be considered having
regard to the precise pleadings and nature of the claim.
33. We therefore return to the Petitioner’s principal objection concerning MSE.
The mere fact that the Petitioner’s securities are not listed on MSE is not, in
isolation, sufficient to determine the issue. What is required to be examined
is whether, having regard to paragraph 16(a) of the Master Circular, MSE
was competent to administer the reference in the particular circumstances of
the present case. The material before us indicates that the complaint was
allotted to MSE through the ODR Portal under the allocation mechanism
established by SEBI and that the matter thereafter proceeded through
conciliation. The Conciliation Officer also recorded his finding on
limitation before the matter proceeded to the arbitral stage.
34. We are not persuaded, in the facts before us, that the allocation of the
complaint to MSE constitutes such a patent and demonstrable absence of
authority as would justify this Court in preventing the arbitral process at the
threshold. This conclusion, however, is confined to the exercise of writ
jurisdiction and shall not preclude the Petitioner from raising before the
arbitral forum its objection that the reference was not maintainable before
Page 17 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
an ODR Institution empaneled by MSE having regard to paragraph 16 of
the Master Circular.
35. We make it clear that we have not adjudicated upon the Petitioner’s
objections on limitation, locus, maintainability, res judicata, abuse of
process or the substantive entitlement asserted by the Complainant. All such
objections remain open to the Petitioner and may be urged before the
arbitral forum in accordance with law.
36. The Petitioner’s contention that it ought not to be compelled to participate
because, according to it, the complaint is frivolous also cannot be accepted
as a ground for interdiction of the proceedings. The Master Circular does
not confer upon a Market Participant a unilateral power to declare a
complaint frivolous and, on that basis, withdraw from the ODR mechanism.
If the Petitioner contends that the complaint is barred, repetitive, not
maintainable or otherwise liable to be rejected, those objections may be
placed before the arbitral forum.
37. We are therefore of the view that the impugned communications dated 24th
October 2024 and 26th November 2024 cannot, on the material presently
before us, be characterized as ex facie void or without authority, so as to
warrant their quashing in exercise of writ jurisdiction. We reiterate that the
Petitioner’s objections are not being rejected on their merits, they are being
left open to be raised before the forum competent to consider them within
the ODR framework.
38. In view of the above, the Petitioner shall comply with the applicable
requirements communicated by Respondent Nos. 1 and 3, including
Page 18 of 19
---------------------------------------------
Judgment dated 21st August 2026
WP/694/2025
ITC vs. MSE & Ors.
payment of the applicable arbitration fees, within 14 days from the date of
uploading of this order. Such compliance shall be without prejudice to the
Petitioner’s right to raise all objections available to it in law, including
objections concerning jurisdiction, allocation, limitation, locus,
maintainability, res judicata, abuse of process and arbitrability. Upon such
compliance, Respondent Nos. 1 and 3 shall proceed with the arbitration in
accordance with the Master Circular and the applicable rules and procedure
governing the ODR mechanism.
39. For the reasons set out above, the present Writ Petition is dismissed. It is
once again clarified that no opinion is expressed on the merits of the
Complainant’s claim or on any of the objections raised by the Petitioner, all
of which are left open for consideration by the appropriate forum in
accordance with law. There shall be no order as to costs.
( FARHAN P. DUBASH, J. ) ( R. I. CHAGLA J. )
Shubham Gadhavepatil
Digitally signed
by SHUBHAM
SHUBHAM SHESHRAO
SHESHRAO GADHAVEPATIL
GADHAVEPATIL Date:
2026.08.21
17:59:53 +0530
Page 19 of 19
---------------------------------------------
Judgment dated 21st August 2026
Checking your session…
Lawyer court records for this case
Associated through the court’s case reference.