LAHORE, Dec 18: The Lahore High Court on Monday penalised the Lahore Stock Exchange for selling illegally the shares valuing Rs400 million which an industrialist had pledged with the bourse for the purpose of trading.

Justice Jawwad S. Khawaja decreed in favour of industrialist and businessman Sheikh Nisar Elahi the suit for damages he had filed in April 2004. The high court observed that the LSE had stepped beyond the mandatory provisions of the Central Depository Committee Act, 1997.

The court directed the LSE to pay to the industrialist money equal to the current value of the pledged shares along with all dividends and bonuses from April 2001 to date.

Petitioner's counsel advocate Mohammad Kashif submitted that the law provided for the issuance of notices to defaulting businessmen. But the LSE had failed to do so and sold the pledged shares without any notice which was an illegal act, he added.

The counsel said this was for the first time that a dispute had been decided under the Central Depository Committee Act and a superior court had issued a decree in favour of the petitioner.