LAHORE, Jan 24: A division bench of the Lahore High Court on Wednesday suspended the order of single bench, which had earlier ordered the Lahore Stock Exchange (LSE) and Central Depository Company (CDC) Limited to pay Rs500 million to Mian Nisar Elahi alias Danka and other investors.

While admitting an intra court appeal of the LSE and CDC, the bench comprising Justice Ch Muzammal Khan and Justice Syed Sajjad Hussain Shah issued notice to Nisar Elahi, Iftikhar Shafi and Muhammad Tanvir Malik for Feb 15.

Mian Nisar had filed a suit for damages under Central Depository Act, 1979 against LSE and CDC as well as the regulatory authority of Security Exchange Commission of Pakistan alleging that the LSE had illegally sold shares belonging to him.

A single bench comprising Justice Jawwad S Khawaja on December 18 had passed an order holding the LSE and CDC liable to pay the damages to Mian Nisar Elahi. Mr Elahi has also filed another petition for the recovery of his money.

The LSE and CDC’s counsels argued that the order of single bench was illegal because it did not have jurisdiction to decide disputes involving sales of shares. They pointed that the LSE sold the pledged shares in accordance with its rights under the LSE regulations in order to satisfy the liability of defaulted group.

They also said that aggrieved party, which was entitled to file the suit, was Tanvir Malik who is member of the LSE, while Nisar Elahi, only an investor, had no locus standi to file the suit. They also pointed out that Nisar Elahi had also filed an appeal against the SECP tribunal’s order and in such situation the single bench had not passed a legal order.

They further asserted that the prices of the shares in 2001 were drastically going down and Mian Nisar had requested the LSE to sell his shares to avoid any further erosion in their values but the single bench ignored this fact.

The LSE had frozen their accounts in 2000 after the unprecedented market crash, climaxing into the closure of the LSE and Karachi Stock Exchange for two consecutive days, as well as, suspension of trading for one day.

It was alleged that the crisis had erupted after the LSE members, working for investor Nisar Danka crossed their exposure limits, and failed to settle their clearing.