SC ticks off NSE; Exchange and MD Ravi Narain face criminal case

The Supreme Court has passed strictures dismissing NSE’s appeal in the matter of harassment and defamation of a former NSE employee. The Exchange and its top brass will now face a criminal case in the Mumbai Metropolitan Court

The National Stock Exchange (NSE) and its top brass are finally going to face a criminal case in the Mumbai Metropolitan Court, after the Supreme Court dismissed its petition requesting to quash the orders of the Bombay High Court in the case of its former employee A Sebastin.

Earlier, the Bombay High Court had dismissed a criminal application filed by the NSE for quashing and setting aside proceedings pending before the Mumbai Metropolitan Magistrate. After losing appeal—and face—in the Supreme Court, the NSE & its managing director Ravi Narain will now face the lower court in a case of criminal defamation brought by Mr Sebastin. A Supreme Court bench comprising Justice P Sathasivam and Justice HL Dattu, said that the High Court had earlier granted one opportunity to NSE to tender an apology but it did not do so and the bourse should be ready to face action. “It is high time that the institution and the management realise the reputation of its employees,” the apex court said.

Mr Sebastin, a compliance officer with the NSE, had resigned from the bourse in October 2008. Later he joined Multi Commodity Exchange (MCX) and came under a nasty personal attack by the NSE. On 6 April 2009, the NSE issued a ‘public notice’ in all leading business newspapers with the former employee Mr Sebastin’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. (For more details of the case that is fast acquiring notoriety see “The Sebastin Case” below).

After Mr Sebastin filed a case against the NSE and its managing director Ravi Narain in the Mumbai Metropolitan Court over alleged character assassination, NSE approached the Bombay High Court for quashing and setting aside proceedings pending before the Mumbai Metropolitan Magistrate. The High Court dismissed the application and in an order issued on 25 March 2010, said: “If an apology is published in the same newspapers in the same manner, it will give an end to the criminal litigation.”

While Mr Sebastin was ready to accept an apology and consequently to end the criminal litigation, an ego-driven, powerful and extremely wealthy NSE, on the other hand, was not ready. On 25th March, the NSE filed an affidavit in the HC stating that it is not possible for them to publish a fresh apology. Senior counsel Shirish Gupte, appearing for the NSE, reiterated the contentions which were made earlier and added that NSE had no intention to make any imputations on the character or efficiency of the complainant.

The HC specifically asked NSE whether it had published the clarification by way of an advertisement, as was done with the notice which is the subject-matter of the complaint, and also whether such a prominent notice, along with the photograph, has also been published in case of other employees who have either resigned or who are terminated from the services of the Exchange. The Exchange replied in the negative.

The Court order then said: “At least prima facie, the very fact that the complainant has been singled out for issuing such an advertisement along with a photograph and, further, the fact that the applicants themselves received various queries with respect to the said advertisement, would prima facie establish that the said advertisement has adversely affected the reputation of the present complainant."

Moneylife had reported ( how the High Court dismissed the Exchange's appeal while passing strictures against the NSE. And how an exchange with loads of funds at its disposal, can try every method in the book to bully, harass and defame a diligent and senior officer. 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.

The NSE has, over the years, created a perception of being a government entity but runs a virtual monopoly and operates an expensive private-sector set up. The Exchange's non-promoter executives, managing director Ravi Narain and deputy managing director Chitra Ramakrishna, earned a gross annual income of Rs6.89 crore and Rs4.21 crore, respectively, besides other perks in 2008-09. The salary of Mr Narain was more than that of the London Stock Exchange (LSE) chief, Xavier Roulet (around Rs5.6 crore), and equal to that of the NYSE Euronext chief, Jean-Françoise Theodore (around Rs7 crore). Comparatively, NSE’s supposed competitor Bombay Stock Exchange’s (BSE) chief executive Madhu Kannan earned a gross income of Rs1.6 crore in the same period. Now, with the Supreme Court dismissing its appeal, the NSE and its top brass, including managing director Ravi Narain, have no other option but to face a criminal case in a lower court.{break}

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 Provident Fund (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.

When we published the case under the title of "Vindictive Action?" on our website, it received (so far) 28 comments 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, Satish Swaminathan, commented, "If there is attrition, then the HR 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.



Vaibhav Dhoka

6 years ago

Mr Sebastian case is eyeopener for financial system fraud and bullying he will be known as Anna Hazare of financial misdeeds.

Panidarajan a

6 years ago

nse's DOMINIATION, as rightly point out by some, with the help of some SEBI's top officials [all now gone] coupled with the lot of Funds derived from the market [near monopoly]. this kind of action should be taken earlier. now Mr Sebastian is fighting very well and i wish him success, so that the monopoly will vanish. the NSE is promoted with the PSU [almost except a few ] Industrial Development Bank of India Limited
Industrial Finance Corporation of India Limited
Life Insurance Corporation of India
State Bank of India
ICICI Bank Limited
IL & FS Trust Company Limited
Stock Holding Corporation of India Limited
SBI Capital Markets Limited
Bank of Baroda
Canara Bank
General Insurance Corporation of India
National Insurance Company Limited
The New India Assurance Company Limited
The Oriental Insurance Company Limited
United India Insurance Company Limited
Punjab National Bank
Oriental Bank of Commerce
Indian Bank
Union Bank of India
Infrastructure Development Finance Company Ltd. and nobody can enjoy the public monies and hence, those affected should take a strong action.

Dr Vaiebhav Dhoka

6 years ago

The reason behind such cases is that these constitutional bodies loose nothing in frivolous litigation.It is public money ,tome is wasted.Three years back I filed RTI 2nd appeal against SEBI & wrote to CIC that as an common man it is beyond reach of common man to go to Delhi but SEBI official flew twice to Delhi meaning that public is always at receiving end.And this flaw is used either to settle score against a person as in this case Mr. Sebastine.or they contst for EGO.They are always in WIN WIN state.Only public money is WASTED.


7 years ago

SC ticks of NSE, now NSE will face Magistrate Court they ticked off by refusing to go or face them earlier.

What a price for a NSE tick size. Still NSE is NSE, will they ever respect law of the land ? They did not think twice before inflicting injustice to Mr. Sebastin. Let us wait and watch, it would be interesting to see if their Management really shows respect by appearing in the court. We have to be to give moral support to Mr Sebastin.
I wish Mr. Narayen a defeat staring in his face by fair trail.
By the way how much public money they spent in SC ? All for wrong precedence and for all wrong reasons trying to curtail human right. This has certainly not met the requirement and expectations of public ? What about their board ?

sumen patel

7 years ago

Yes I agree that it is good idea to mobilize in support of Sebastin, this will also bring it to the fore larger issue of preventing corporate like NSE accountable for their unfair employment practices, and making work places safer for the professionals.

My question is what is their compliance department doing, why grievances handling cell has been quite, what was legal and F&A doing, they are the trustees of laws. Is it overall failure of many departments ? or loss of collective wisdom ? Or erosion of talent. I think their top management must have driven out all other talents who could have advised them.

If they are failing, this must also be true in respect of Member grievances ? Where they will go ? Risk membership ?

Or they are not open to any advise and rely on their own egoistic intelligence and thus what ever the talent they had must have flied to other safer places. What ever the reasons, these are indicators of general erosion and rot in once premier institute turned into evil place. FM, Home minister, JPC should investigate.

The issue is very serious Parliament should take notice of it. We must rally behind Mr. Sebastin. This battle of Handi ghati must never be lost. I will be there with you Mr. Sebastin to give moral support.

Cherry Varughese

7 years ago

NSE lost the plot in the Supreme Court ! However MD/JMD may still go on ! as they have been serial violator of labour laws with scant regards for employees.

They are not used to face defeat, they routinely flout laws, misrepresent the world that they are the government organization in order to get all the benefits from government departments. They have the attitude of considering themselves bigger and superior to the government.

Until and unless people start asking as who owns the NSE ! and who controls it, this satyam should come out before people. Government should appoint administrator.

Supreme courts judgment is a landmark one and it should be an eye opener for NSE. As it has happened with 1 it can happen to others also.

In job market NSE is known to be high handed, arbitrary, flouting norms regarding working hours for male & female employees with use and throw attitude. People see it as place very hostile towards its employees.

So far they have managed everything, they hope to manage many things, defending himself in the lower court would not be easy for Mr. Sebastin whose struggle is now epic one. One wish this struggle should continue till justice is achieved not just for Sebastin but for every one who have suffered and whose dues were not cleared or defamed, humiliated in some ways. Mr. Sebastin should win this case now in Metropolitan Magistrate court no. 16 at ballard pier.

Let us join his/our struggle till we win against NSE injustice. I appeal to the NSE employees, ex-employees and other market participants (who have equally been treated nastily by NSE) to gather in large nos. at the ballard peer, metropolitan magistrate court no 16 in support of Mr. Sebastin on next date. Let court see that Mr. Sebastin is not alone and his case no. is not seen as another piece of serial no. to be turned it over from left to right. Let court realize that this is the test for Indian judicial system so that people retain the faith in the system. NSE may still spend another crore on this case which middle class salaried person like sebastin can’t match, however with the presence of people the trial can be more fair. Let presence of many ex-employees in the court can convey that NSE has hurt, humiliated ruined careers, economies of too many people by their inhuman approach.

The date of court case will be conveyed to all, let us gather in the court in support of Mr. Sebastin.

Kamlesh Kumar

7 years ago

It is high time NSE stop their unfair practices with their employees as well as ex-employees. Narain should definately give written apology in all the leading newspapers as well as he should bare all the money related to this case and pay the similar amount to Dr. Sebastin also.

Ravindra Shetye

7 years ago

As a judge I would have the following punishment for Mr. Narain and acomplices if any.
1. The total expense on both sides to be personally paid by Mr. Narayan.
2. A similar amount to be paid by Mr. Narayan to Mr. Sebastian.
3 An exemplary jail of one week to Mr. Narayan and accomplices.
An advertisement in two widest circulated Business newspapers in each state one in English and one in local language at the cost of Mr. Narayan.

Roopsingh Solanki

7 years ago

Dear readers-i want to raise few points which shows the 2 different yard sticks used by SEBI against mutual fund industry and particularly against IFA community.
1-SEBI approves online trading and settlememt sofyware for securities trading-and though it allows exchange brokers to charge more then 50 paisa brokerage(.5%),for sell and purchase and even more by few like ICICI direct-but after aboloshing of entry load after 8 months passed-it has not worked out to give same facility to empanneled IFA's-so IFA;s are forced to go for manual transactions which is not cost effective.
2-SEBI is not allowing NFO's which is good move but the bad part is that it allows IPO's for raising money from uneducated investors.
3-SEBI put a limit to expense on NFO and but it is not looking to huge expenses done by IPO raisning if they have all rights to make any amount of expenses(at the cost of investors pocket)-with no guarantee of loss or profit on listing day(most IPO's are in red now).
4-equity brokers are leving charges to be named like DEMAT opening,Demat maintaing annual charge,Demat closing charge,DEmat transfer charge,Inter depositery benificiarry charge,and above all brokearge to be paid not less then .5% in most of cases per sell or purchase along with STT-
5-Are all these costs bearable by a RETAIL investor who wants to put some savings in securities?


7 years ago

I am wondering what would be a just punishment for such abnormal and ham handed behaviour. Mr. Ravi Narain's dismissal (or whoever is the culprit) and a similar public notice against his name?

Danny Sarna

7 years ago

I hope that the courts also decree that all the costs of the litigation of both the NSE & of Mr Sebastian plus substantial tort damages to Mr Sebastian must be paid by Mr Ravi Narain personally. Only then will the needs of justice and the need for effective deterrence against such rogue behaviour be achieved. I would urge the press to support Mr Sebastian by running a sustained campaign to ensure this is done.

A J Nair

7 years ago

Ravi narain should be sentenced 1 day jail just to send message to other such high power designates to maintain restraint in such matter

Shibaji Dash

7 years ago

Newton's law: anything that goes up must come down. Aesop's fable : the mother frog bloated and kept bloating till she burst not able to digest her kid's description of the cow it had seen . A bubble must burst burst at the end.After all Sebastin had only one identity ie, his name.

Avinash Murkute

7 years ago

Wake up call to other CMD who have the tendency to prolong the cases till they retire. Let this case set an example for Corruption Managing Directors. And I am referring to BSNL for sure.

Avinash Murkute

7 years ago

Wake up call to other CMD who have the tendency to prolong the cases till they retire. Let this case set an example for Corruption Managing Directors. And I am referring to BSNL for sure.

Sound Vision for Blind Students

Savita Narayan writes about an NGO creating audio books for the visually-impaired

In 1998, when Veena Sahasrabuddhe moved to Nashik, little did she know how events would move her life in an unforeseen direction. As a student, Veena had excelled in extra-curricular activities while maintaining high academic standards but could not complete her education. Later, she concentrated on her family. As her sons and husband got busier with their studies and career, a sense of frustration engulfed her.

One morning, Veena was at a busy traffic junction. Nearby stood a visually impaired man requesting passers-by, without success, for assistance in safely crossing the road. Veena asked if he would accept her help instead. With the simple, humane gesture of guiding him across, Veena helped herself overcome the self-doubt that had begun to mar her life.

“That day, God heard me,” Veena says. “The man was a teacher at a school for the visually impaired, two doors away from my house. His self-confidence, in spite of his lack of sight, impressed me.” As they walked to the school, Veena learnt what it was like for the visually impaired to be in a learning environment as a teacher or a student with different needs—readers and writers are essential here. Veena felt an opportunity to help others beckoning her. “Forget any light in their lives, these children could not even reach the candle. As the wise say, everyone needs a guru,” she says. “That teacher was my guru. He guided me completely in what was a very new field to me.” Truly an instance of cometh the hour, cometh the man.

Today, Veena runs the Third Eye Association with her aseem parivar (boundless family) of friends and well-wishers. The team comprises 50 people.

Government-run schools for the blind, with books in Braille, are only up to the 10th Std. For students wanting to pursue higher studies, accessing textbooks is a very real hurdle. Third Eye offers recordings of any textbook prescribed by any university and for all competitive exams.

Veena began with a recording of a textbook on an audio cassette for a girl in high school. By 2003-04, the demand was so high that Veena was reading and recording for 10 hours everyday.

A turning point in her endeavours was a visit by noted Marathi author, Praveen Dawane, on 27 December 2004. He wrote about her work in his column in the daily Sakal. The result was telephone calls from all over Maharashtra with enquiries, recognition and help. Well-known Marathi authors gave permission for the recording of their books.

Funding began with a donation from one Mr Pendse in 2004 which facilitated the purchase of a dubbing machine to record a master cassette to make copies. The Rotary Club donated a tape-recorder. The sponsorship of an adjoining flat offered the much-needed space for more equipment and helpers.

Blank audio cassettes are sourced in bulk. Veena has eight computers which are audio-operated, a Braille printer and an audio book-reader on which 60 hours of recordings can be loaded. Saksham Nagpur, an RSS project, had donated CDs. Next on the wish-list is the screen reader Jaws. All this without ever having charged a rupee from any student!

Third Eye has concentrated on academic tomes so far. Veena now wants to record fiction and poetry to widen students’ horizons.

Third Eye’s beneficiaries include Shrirang Sahasrabuddhe of Infosys, a rank-holder now doing his PhD; state-level chess player Sonali Borse; officers working for various banks; first rank-holder in BEd (normal) Maharashtra and the rank-holder for Nashik in the State Board 12th Std exams. 

The Lions Club awarded Veena Sahasrabuddhe the Helen Keller Award in 2009 for her services for the visually impaired.

According to Indian thought, ‘opening the third eye’ means receiving knowledge. Third Eye Association is the gateway for visually impaired students to encounter learning and experience a fuller life.

Third Eye Association
VS Sahasrabuddhe
5, Nisarga-Prakash,
Near KJ Mehta High School
Nashik 422 101
Tel: 0253 2468867; 09890251009
[email protected]


Country adds 20 million mobile users in March

The wireless subscriber base has increased by 3.6% from its February user base of 564.02 million

With the addition of 20 million new users in March, the highest ever this year, the mobile subscriber base in the country has jumped to 584.32 million customers, the Telecom Regulatory Authority of India (TRAI) said today, reports PTI.

The wireless subscriber base increased by 3.6% from its February user base of 564.02 million, TRAI said in a statement.

With this addition, the total number of telephone subscribers (wireless and wire-line) in India increased to 621.28 million at the end of March 2010, from 600.98 million in February 2010.

The number of users in the wire-line segment remained unchanged at 36.96 million, as there was no net addition to fixed line subscriptions, which have been witnessed negative to flat growth for quite sometime now.

With operators slashing tariffs further and new telecom players offering innovative schemes, the total telecom subscriber base registered a growth of 3.38% in March.

The maximum new additions for operators came from the ‘Circle B’ and ‘C’ cities, indicating that markets in the metros are saturating.

With this, the overall tele-density in India has touched 52.74, which indicates that 53 out of every 100 people in India own a telephone connection (wireless or wire-line). The wireless tele-density stands at 49.60.

In the wireless segment, Vodafone was able to add the maximum number of new users to its network, followed by Reliance Communications and Bharti Airtel.

Vodafone trumped the country’s largest operator, Bharti Airtel, by adding 3.6 million subscribers in March, taking its total number of users to 100 million. In comparison, Bharti Airtel added 3 million users to expand its subscriber base to 127.6 million, data showed.

However, Bharti Airtel remained the leader with a 21.84% share of the market at the end of March, followed by Reliance Communications with a 17.53% share and Vodafone with a 17.26% share, TRAI said.

While the subscriber base in the wireless segment increased from 564.02 million in February, the number of users in the wire-line segment remained unchanged at 36.96 million, the statement added.

In the wire-line segment, Bharat Sanchar Nigam Ltd remained the biggest player, holding a 75.31% market share as on 31 March 2010, followed by State-run MTNL.

The broadband subscriber base increased from 8.59 million in February to 8.75 million in March 2010, a growth of around 2%.


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