Madhya Pradesh pepper traders move court against NCDEX

Mumbai, March 25:  

Kalimirch (black pepper) Vyapari Association, a Madhya Pradesh-based traders’ body, has filed a writ petition in Madhya Pradesh High Court against the National Commodity and Derivatives Exchange, National Securities Depository, Central Depository Service and Ministry of Consumer Affairs for defaulting on pepper delivery for contracts which expired on January 5.

The petition (a copy available with Business Line) was filed by a group of 30 members last Monday and was admitted for hearing on March 21. The hearing is posted for April 2.

Vijay Kumar, Chief Business Officer, NCDEX, said that the exchange had not received the petition copy so far and would be able decide on the future course of action only after going through the details.

The 30 members had bought 6,935 tonnes of pepper worth over Rs 300 crore on the exchange platform and were preparing to take delivery of the goods from the exchange-accredited warehouse in Kochi after the contract expired on January 5.

To their surprise they were informed by the warehouse that the Commissioner of Food Safety and Standards Authority (FSSA) in Kerala had sealed the exchange-accredited warehouses on detection of adulterated pepper stocks in November.

Warehouses sealed

Six warehouses accredited by the NCDEX in Ernakulam and Alappuzha districts in Kerala were sealed on charges of having adulterated pepper stocks.

plea for compensation

The petitioners have asked the Court to direct NCDEX to deliver pepper according to the contract specifications and also compensate them for the price difference.

As an alternative, the exchange can pay the petitioners the value of the commodity along with VAT (value-added tax) and interest at 18 per cent a year, the members said.

The association members have also sought additional compensation towards warehouse charges.

The petitioners said their association has cautioned the NCDEX and the market regulator, Forward Markets Commission, on adulterated pepper being stored in the warehouses even before the FSSA took action.