Stock Exchange, Bombay vs V.S. Kandalgaonkar & Ors

The Supreme Court addressed the conflict between the Income Tax Department's claim for priority over debts owed by a defaulter member of the Stock Exchange and the Stock Exchange's assertion of ownership over the membership rights. The Court held that under Section 226(3) of the Income Tax Act, the Income Tax Department's prohibitory order was valid; however, it recognized the Stock Exchange's rules regarding the inalienability of membership rights. The Court ultimately ruled in favor of the Stock Exchange, allowing it to exercise its rights over the membership card, thus quashing the Income Tax Department's claims.