HC notice on plea challenging circular fixing negative rate of crude oil

New Delhi, April 30: The Delhi High Court has refused to put an interim stay on a circular by MCX which had fixed the due date rate of crude oil futures contract in a negative value. The circular dated April 21, issued by the Multi Commodity Exchange Clearing Corporation Limited, fixed the due date rate of crude oil futures contract, which expired on April 20, at minus Rs 2,884 per barrel. While refusing to grant interim stay on the circular, a single judge bench of the high court presided over by Justice C. Hari Shankar observed, "Keeping in mind the multifarious objections raised by the respondents, which would require to be answered by the petitioner, as also because the writ petition has failed to disclose any provisions, statutory or otherwise, which the impugned circular allegedly infracts, and, additionally, bearing in mind the fact that the dispute essentially involves the rate at which the transactions are to be effected, and is, essentially, therefore, in the nature of a contractual financial dispute, I am not inclined to grant any interim relief in this matter." The court also sought response from the Securities and Exchange Board of India (SEBI) and others in connection with the petition filed by Akshay Aluminium Alloys LLP challenging the circular issued by MCX on April 21. The plea also sought an interim stay on the said circular. During the course of the hearing, the counsel for the petitioner made various submissions to impugn the said circular, which primarily hinges on the practical hardship that his client is facing as a consequence of the circular. However, the judge questioned the submissions of the petitioner and said, "I may note here that despite repeated queries from the bench of this court, my attention has not been invited to any statutory provision, or even to any administrative instructions, which stand infracted by the impugned circular." Responding to the submissions made by the petitioner, Arvind Datar, senior counsel appearing for SEBI, told the court that various preliminary submissions, including certain serious preliminary objections in his submission would merit outright dismissal of this writ petition. "On whose action the petitioner claims to be aggrieved are situated in Mumbai. Various other persons, who are also aggrieved by the impugned decision, have, in fact, moved the Bombay High Court, and it is the petitioner alone who has chosen to approach this court," Datar said, raising questions on the territorial jurisdiction. Datar further submitted that the present dispute is entirely within the realm of contract, and does not constitute one of these species of contractual disputes in which a writ court could legitimately exercise jurisdiction. The court will now hear the matter on June 24. (IANS)