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Informist, Friday, Aug. 21, 2026

 

NEW DELHI – The Bombay High Court Friday upheld Metropolitan Stock Exchange of India Ltd. and an online dispute resolution institution Jupitice Justice Technology Pvt. Ltd.'s notice asking ITC Ltd. to participate in arbitral proceedings initiated for transfer of bonus shares pending for almost four decades to an individual. ITC should comply with all requirements issued in the communication, including payment of arbitration fees, within 14 days, the court said.

 

The communications issued to ITC cannot be characterised as ex facie void or without authority to warrant their quashing in exercise of writ jurisdiction, the high court said. However, the company's objections are not being rejected on their merits, but they are being left open to be raised before the forum competent to consider them within the online dispute resolution framework, the court said. "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," the court said.

 

ITC argued that Metropolitan Stock Exchange lacked jurisdiction to deal with the complaint and call for arbitration as its shares were neither listed nor traded there. ITC said several complaints had been filed on the same issue of bonus shares, and the complainant had approached several authorities on the same subject. The repeated invocation of the online dispute resolution mechanism amounts to an abuse of the process and the present proceedings constitute yet another attempt to re-agitate the same dispute, ITC said. Further, the bonus shares were issued in 1989 in the names of the original shareholders, and the claim, raised after more than three decades, is ex facie barred by limitation, the company said.

 

The high court said the mere fact that ITC's securities are not listed on Metropolitan Stock Exchange cannot be treated as conclusively establishing the absence of authority of every participant in the online dispute resolution mechanism. Repeated invocation of a statutory or regulatory dispute-resolution mechanism cannot be permitted to become a means of indefinitely reopening concluded proceedings, the court said. 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, it said. The fact that the underlying transaction dates back to 1989 does not, by itself, permit the court to dispense with the adjudicatory process contemplated by the Securities and Exchange Board of India's master circular, it said.

 

The individual had purchased 85 shares of ITC in 1989. At that time, the company had declared a one-to-one bonus issue. The company issued the bonus shares in the original shareholders' names. Thereafter, the shares were registered in the individual's name, who later transferred them to someone. ITC informed the individual that it would keep the bonus shares in abeyance pending submission of completed transfer forms. However, no such forms were filed. Thereafter, ITC informed the individual that it had inadvertently returned the bonus shares to the original shareholders. Since then, the case has witnessed multiple complaints against ITC.

 

Friday, ITC's shares ended 0.8% lower at INR 269.40 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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