SC asks Sebastin to file fresh petition in High Court for early hearing  

May 11, 2010

 The Supreme Court has asked A Sebastin, a former employee of the National Stock Exchange (NSE), to file a renewed petition in the Bombay High Court, which seeks for an early hearing of a case related with various dues of Mr Sebastin from the NSE. This is the second time the apex court has ruled in favour of Mr Sebastin.

Earlier, the Supreme Court, while dismissing an appeal of the NSE, had passed strictures on the Exchange. The Supreme Court dismissed NSE’s petition for quashing the orders of the Bombay High Court and asked the Exchange and its top brass to face a criminal case in the Mumbai Metropolitan Court.

Mr Sebastin had filed a petition in the Bombay High Court requesting an early hearing of his application related with dues owed to him by the NSE. However, the High Court rejected his application. Mr Sebastin filed a special leave petition in the Supreme Court, which on 12 April 2010 asked him to file a fresh petition in the High Court for early hearing of his appeal.

The Supreme Court order dated 12th April said: "As the earlier rejection of the interim prayer was on the assumption that an early hearing application will be entertained, it is always open to the petitioner to renew his prayer for interim relief in accordance with law."

Mr Sebastin is likely to file his fresh petition in the High Court after the summer vacations.

Mr Sebastin, a compliance officer with the NSE, had resigned from the bourse in October 2008. Later he joined Multi Commodity Exchange of India Ltd (MCX) and came under a nasty personal attack from the NSE. The Exchange has still not cleared various dues of Mr Sebastin, except his provident fund (PF), since holding back PF is illegal.

The NSE, through a clarification, had said that Mr Sebastin’s “services were terminated” because he “had not met the company’s requirements.” It also indicated, without being specific, that the employee had failed to complete “severance” formalities.

Mr Sebastin, however, has evidence of a formal handover of charge, an exit interview and an email assurance that he would be relieved. He says that the public notice was issued after he sent a legal notice to the NSE on 4 April 2009, demanding severance benefits like PF and gratuity.

The NSE credited his PF account immediately after receiving a legal notice but till date had not paid other dues, including gratuity, super-annuation, leave travel allowance (LTA), medical allowance, leave encashment, additional ex-gratia and salary for 14 days in November 2008, together amounting to about Rs32.50 lakh.

Since the Exchange is flush with funds, derived from profits of a well-preserved, near-monopoly commercial position, it can afford to fight a case right up to the Supreme Court. However, the question is whether this was necessary and whether it merely reflects its bullying antics, as has now been proved by the High Court and Supreme Court judgements.

We sent an email to the NSE requesting details of the Exchange v/s Sebastin case, such as legal expenses, cost of public notice and other costs. But Divya Malik Lahiri, the recently-appointed head for corporate affairs and communications, NSE, replied in one line saying, “I am sorry, I won’t be able to comment on these things."

According to industry sources, the public notice published in various business newspapers would have cost the NSE about . Also hiring the top legal brains for fighting cases from lower courts to the Supreme Court is also not without a financial burden that the Exchange may have to bear with.

Rs20 lakh-Rs25 lakh

The Sebastin Case

In October 2008, A Sebastin, a compliance officer in NSE, resigned from his job and joined MCX. On 6 April 2009, the NSE issued a ‘public notice’ in all leading business newspapers with the employee’s photograph announcing that anyone dealing with the “said Mr A Sebastin” would do so at their own risk.

Normally, such notices are published only if an employee is guilty of financial fraud or a serious betrayal of trust. However, there is no such mention. Instead, the NSE issued a clarification in response to media queries, saying that Mr Sebastin’s “services were terminated” because he “had not met the company’s requirements.” It also indicated, without being specific, that the employee had failed to complete “severance” formalities.

Mr Sebastin, however, has evidence of a formal handover of charge, an exit interview and an email assurance that he would be relieved. He says that the public notice was issued after he sent a legal notice to the NSE on 4 April 2009, demanding severance benefits like PF and gratuity.

Holding back PF is illegal, so the NSE reportedly credited his PF account immediately after he served the legal notice but simultaneously issued him a termination letter followed by the public notice, almost six months after he had quit the Exchange.

We published the case under the title "Vindictive Action?" on our website www.suchetadalal.com; it has received 28 comments (so far) from readers. One reader, Mr Golak, said: “NSE should try to find out why NSE ex-employees are willing to join MCX-SX and sort out the problems rather than take this kind of vindictive action. As an organisation, it has failed to come out of the whims of a few people who run the Exchange on their own sweet terms.”

Another reader, Mr Satish Swaminathan, commented, "If there is attrition, then the human resources (department) should be pulled up for explanations and probably try to get to the root cause and address it. I also fail to understand how the NSE is proposing to beat its competition by stopping people and being vindictive when they join a competing firm.”

“It is highly unethical behaviour by a highly professional company like NSE. Such a step by any company cannot be justifiable as employees are a company’s human assets and not physical assets,” said ‘SS’, another reader. 
— Moneylife Digital Team