The Bombay High Court today reserved its order on a dispute between the commodity market regulator Forward Markets Commission (FMC) and National Commodity and Derivatives Exchange (NCDEX) over slashing of transaction rates by the exchange.
Faced with a sharp drop in turnover since July, NCDEX last month created two slabs for exchange rates, before 5 pm and after 5 pm.
NCDEX announced uniform charges of Rs 3 for every lakh of the total value of all trades in all commodities from 10 am to 5 pm and five paise in the second session from 5 pm to 11 pm.
In an attempt to attract trade in the metals, the rates in the second slab were reduced drastically.
But FMC took exception to this reduction, saying it might affect the business of two other commodity exchanges adversely.
FMC last month also ordered NCDEX to keep the new structure in abeyance, following which the latter moved the Bombay High Court.
Arguing NCDEX's case before the division bench of Chief Justice Swatanter Kumar and Justice Dhananjay Chandrachud, Senior Advocate Iqbal Chhagla said that NCDEX's by-laws permit it to change the rates.
"What is wrong if this creates some competition?" he argued, alleging that "FMC is trying to favour other exchanges".
However, FMC counsel Rafiq Dada said that the reduction in rates might have great "financial implications".
Further, he said, the decision was taken after giving a mere 24 hours' notice to the FMC.
The court reserved the order after hearing the parties.
